IN TWO weeks’ time, Londoners will discover whether much-needed improvements to transport in the capital will be paid for from their taxes or through inflation-busting fare rises.
As part of his Comprehensive Spending Review, George Osborne will tell Boris Johnson how much money the Treasury will provide to support London’s transport. Of the £8bn it costs to run Transport for London (TfL), about a quarter comes from government grant, with Londoners’ fares contributing a large slug of the rest. So over-simplifying slightly, this boils down to an argument over whether he pays, or we do.
While cutting public spending is undoubtedly the priority, the chancellor has committed to investing in “economically valuable areas of capital expenditure”. Construction and transport investment in London meets this requirement perfectly, and would actually lead to more jobs and business for the rest of the UK than for the capital – through train building in Derby or steel making in Bolton, for example.
As the region with the highest levels of productivity, London contributes more in tax than the public sector spends on the city. And over the next 20 years, employment in London is projected to rise by 700,000 and the population by 1.5m to almost 10m – its highest ever. It’s the equivalent of adding a city the size of Birmingham.
But the other side to London’s success is that, by 2031, the Tube network will face serious overcrowding. Commuters may feel squeezed now, but just wait until then. And what about the roads, carrying 23m daily journeys already – how many more will it be with all those extra people? Following the logic of his own rhetoric, Osborne should commit more, not less, to London’s transport.
Most important is continuing the Tube modernisation programme – moving seamlessly, for example, from work on the Northern to the Piccadilly line. And don’t forget the Northern line extension, which will see long-awaited revitalisation (and construction jobs) at Battersea Power Station. On the roads, while plans to update key junctions like Old Street and Elephant and Castle help, they won’t deliver the capacity we need. We must build new tunnels and “flyunders”, and new river crossings in east London, such as a tunnel at Silvertown and a bridge east of Woolwich.
Of course, TfL should continue to bear down on costs and improve its commercial revenues. But without adequate funding from government, the mayor will face a stark choice: allow London’s transport system to decline, as it did in the 1980s, or find the money elsewhere. Costs such as travel concessions for the under-18s and over-60s may come under scrutiny, as might the perk that allows TfL employees’ families to ride around London for free. The unions may need to take a reality check over pay. And, ultimately, fares may have to rise ahead of inflation.
Without action, those Londoners – squeezed into crowded carriages and congested roads – who have more than paid for transport upgrades through their taxes – may find themselves pressed even further.
Baroness Jo Valentine is chief executive of London First.