Today Andy Silvester talks to Adam Tyndall, Programme Director for Connectivity at London First. They talk all things Crossrail — from the first idea of an East-West railway in the 19th century, to the funding behind the Elizabeth Line, and to the future of London’s transport system.
And in other news — Shell’s AGM was disrupted by climate activists earlier today, and Kwasi Kwarteng has stated that hitting electricity suppliers with a windfall tax would be a “challenging proposition”.
Episode transcript (auto-generated)
Andy Silvester 0:08 Good afternoon and welcome to The City View podcast with me Andy Silvester, the editor here at City A.M. on what is a momentous day for the capsule. The opening finally, of the Elizabeth line will be in three parts a few years late, but still very, very impressive and in a few minutes I’ll be talking to Adam Tyndall from London first and man he knows more about London’s transport network than probably anybody should. He and I will discuss Crossrail and what’s next for the capital? Firstly, some corporate and politics news and hitting electricity generators with a windfall tax will be a quote challenging proposition unquote, and could hamper the UK’s netzero ambitions. According to Business Secretary Kwasi Kwarteng the business equity also came out firmly against a windfall tax on oil and gas companies saying the policy is not a good idea and comments that will put him in clear opposition to Chancellor Rishi Sunak Sunak is said to want to impose a levy on excess profits. We’ll let you decide what excess profits mean. Made by British oil and gas firms after the experienced record returns over the past 12 months. That money would be in theory at least go towards families struggling with soaring energy bills the head of OFGEM today warning in parliament that the energy price cap likely to go up to as high as 2800 pounds in October. The FT reported yesterday that Sunak has told Treasury officials to draw up proposals for the levy to hit electricity firms, including renewable energy generators, like wind farms, quite how that aligns with plans to move towards net zero is not quite clear to me. Also in the NGO world shells Annual General Meeting is finally underway again now at 4pm. After a delay for nearly three hours following protests from climate activists, protesters stormed a meeting at Methodist hall where shareholders were set to vote on the oil and gas giants climate Transition Plans. Dozens of protesters from groups such as extinction rebellion derailed the proceedings this morning. chanting slogans like Shell must fall and holding banners a shelter So Angie Mackenzie tried in vain to continue the meeting. Mackenzie eventually said that he was welcoming everybody’s views. But there were things that just required a little bit of peace and quiet. Meanwhile, the Bank of England has said lenders insurers that do not respond to factories climate risk could face major hits to their profits. Official separate actions varied across different financial institutions, but a 10 to 15% drag on profits on average, could be the case in the worst case scenario. Losses of this magnitude can make individual firms and the financial system overall more vulnerable to other future shocks. The bank said in its biennial stress tests elsewhere. Good news from Shaftsbury as they see the West End picking up following good news from Grosvenor as well yesterday, and news two from Topps Tiles will thing the DIY boom continuing as people continue to sort out their bathrooms. There’s plenty more on city am.com right now and will be in tomorrow’s newspaper as well. But for now we are going to talk Crossrail and London’s transport network, because there’s plenty to talk about. So Adam Tyndall from London First joins me now. Adam, pleasure to have you here.Adam Tyndall 3:01 Great to be here. Andy Silvester 3:02 And we’re going to talk about day dot on Crossrail and where this project has come from and perhaps where London goes next. I need to get he’s calling it the Elizabeth line. But you’ve had the pleasure of riding this this revolutionary new transport today. What do you think? Adam Tyndall 3:19 I think it’s, it’s just fantastic. I was eavesdropping on conversations all around me. And from two women on an escalator in in Woolwich station, who were comparing how long they’ve been waiting for it living in the area and waiting for it to open through to the kids running up and down the carriage taking photos. people commenting on how quiet is how smooth the ride is. It was it was just fantastic. And actually probably the most striking thing was when Paddington I transferred to the Bakerloo line. And that’s out onto the onto the platform and thought, wow, this is small. Andy Silvester 4:00 Yeah, yeah, no, I was lucky enough to the I just started running the test runs. I went on it but obviously there’s nobody, nobody on it at that point. So you don’t get a sense of it. But even then the scale of it and the architecture around the stations and just how big it is. I just remember turning someone saying it feels like I’ve arrived in a functioning European city. It just sort of felt like the sort of thing you arrive on Stockholm airport or something. It just felt all very well organised and not necessarily the thing that you expect in the UK. Let’s go back to to how we’ve got here because it’s been a project that has taken an awfully long time to come to fruition. Important though it is going back to the days of Ken Livingstone. But there was one particular element that was really interesting about the way Crossrail was funded, and I think is important in the context of the rest of the country looking at London getting another shiny new transport project, which is that the vast majority of this was funded by London as for London as effectively right and particularly London businesses stepping up? Adam Tyndall 5:02 Yeah, absolutely. I mean, this is a project that I mean, depending on how you how you count it, there were the bills in parliament in the late 19th century for a new East West railway linking the city in Paddington, there were postwar plans, things really got moving in the mid 70s. And then, and then accelerated in the, in the late 90s, with a central London rail study. And at that point, there was another is a private bill introduced into the House of Commons, and it all sort of ground into the sand. for precisely this reason, it was unclear where the money was gonna come from, and that was, you know, small, small plug, I suppose. But, you know, that was the point of which London First was was was created in response to the 90s being a period where London didn’t have any city leadership, and the business community realised that, you know, businesses needed to organise, in order to get the at the outcomes that London needed, if it was going to be a, you know, sort of as you build a functioning 21st century European capital city. And, you know, that was that was the point at which people started looking again, at funding packages. And essentially, what what happened over a number of years was was the business community offering put put their hands in their own pockets and volunteering to be taxed more, about 40% of the of the final funding deal had been paid for by London’s businesses. And if you take into account the fact that London has as a whole has a net contribution to the Treasury every year, equivalent to more than two full Crossrail lines. London has paid for the whole thing. Yeah. And you know, and but I think you’re absolutely right, the additional money that came from additional taxes on on the business community, you know, that’s not money that would have gone anywhere else. That’s money that only existed. Because the business community, London government, central government came together, and, and thrashed out and worked out a deal that worked for everyone Andy Silvester 7:13 Which is a fascinating model. Because, of course, one of the great problems that London has, politically, at least in terms of governing itself is that it has precious few powers to hike taxes, drop taxes, and then did certainly keep any of the revenue that’s created here, compared to other global cities. So it’s interesting that we sort of had to go outside current arrangements to find the powers that we did have as a city and basically asked businesses to pay Yeah, was it 2% supplementary business rate for a number of years to get Crossrail over the line, I guess the businesses that were paying that, and again, as you say, the London Business community did say, you know, fair enough, we’ll do that. They’re looking at these infrastructure projects, as essentially, I guess a downpayment on their future success, right? Adam Tyndall 8:01 Yeah, absolutely. You know, this, this is a scheme that’s ended up costing just show 19 billion pounds, but it’s going to return about 42 billion pounds to the exchequer. And on a practical level, you look at the the top of the taxes, there were companies that literally put their hands in their pockets and just just offered to contribute. And you look at where that where those those companies are. It’s the it’s these key business districts that are being connected up. So Heathrow, the West End, the city, Canary Wharf, and increasingly, the new harbour, Stratford as well, you think pulling that all together? In a way that means you’re going to be able to get a direct train from our global hub airport in the west through to our key business districts in the east in 4550 minutes. And that is a that’s a direct benefit to the to the businesses that are located there. Absolutely. Andy Silvester 9:00 And the scale of Crossrail as well. Obviously, we keep thinking about the central London element of it, but absolutely the building out and the speed with which people from you know, the suburbs, the outskirts, Essex, Redding, whatever it might be increasing their ability to get into the capital quickly, those people that are there at the moment, but also those people in London, perhaps looking to buy or looking to upscale for a family home or whatever, now start to be able to see that actually, the London housing market doesn’t just stop at zone six, you know, it can move out far further. That’s obviously going to I would assume, I mean, in a small way, we quite clearly just need more bloody houses built but you know, in a small way that will help to start alleviate some of the pressure on the housing market as well. Right. If you start making that London envelope, I suppose the places that you can live within a reasonable commute of the office, you bring that down. Presumably that just just softens the demand across the Capitol more generally. Adam Tyndall 9:53 Yeah, absolutely. But we don’t even need to look outside the DM 25 for this. Yeah, I was down in Woolwich and Abbey Wood this morning. Yeah. And you step out in these places. And there is there’s a lot more space there for for for housing than than there is in in central London for for obvious reasons. And you look at some of the future projects like extending the DLR out to Thamesmead or the poor Bakerloo Line extension into into Southeast London there are bits of inner London, let alone outer London, let alone the home counties that are have real scope for densification for new housing developments you look at the station down a downward edge which which wouldn’t have happened without you know, I mean one some fantastic campaigning from the local MP at the time and do you know housing developer who came in and and often enough to make that happen with with a whole load new, more a whole load of new houses as well? Andy Silvester 11:01 Yeah, no, absolutely. It’s interesting. You mentioned those big projects and where we go from here because we’re all entitled to bask in the glory of, of the Elizabeth line opened a few days before the Jubilee. So is ended up being wonderfully timed the opening of Crossrail even though of course, it’s about three and a bit years like, but you talked about big projects, and we’re entitled think how wonderful it is today. But I guess there’s a question now, a very pressing question about the future of London’s transport infrastructure in the future of London’s well ability to invest in its own future because we’re at a pivotal moment really in the relationship between Whitehall and city hall and therefore TfL when it comes to funding, since the pandemic we are on bailout number four now of central government cash, which as you pointed out earlier, is very often taken from London anyway. But London gas going into white or going back to London to keep TfL going because of the massive crash in in passenger revenues. There are fears and Sadiq Khan has been very clear about these Ss Andy by flood headed TfL. And that it’s difficult to imagine without a longer term funding settlement that TfL will be able to invest in the things it needs to invest in both on a day to day basis in terms of the engineering work making sure the bridges are staying up. As well as on the longer term projects that you mentioned, like the Bakerloo Line Extension Crossrail to a new river crossing in East London beyond Tower Bridge, all that kind of stuff. I assume you haven’t I think I know I’m going to the answer I’m going to get from London first. But I guess the key thing is to make sure that this isn’t the crowning achievement in London’s transport, investment. But it’s actually just a point of saying, well, actually, these things do deliver value for money. There is a business case for these. And we need to keep going and actually central government City Hall just need to come to an arrangement so that London can start planning for its own future. Adam Tyndall 12:52 Yeah, absolutely. And here we are. People are asking questions about the level of public transport demand post pandemic, I think, you know, actually, the statistics are starting to answer those questions pretty pretty clearly with numbers recovering. But you know, this isn’t a project for the next few months. This is project a project for the next century. And we’re still using tunnels built in the 19th century across London. And this is a city that’s still predicted to grow by a couple of million people by the middle of the century. And if we want to I mean, a facilitate that growth, be do that in a way that allows us to meet our net zero targets and see, at the same time, keep the roads moving, we’re going to need a lot more public transport rather than less. And I think, you know, your your point earlier about the amount of control London has over its own destinies is really well made. London retains about 7% of the tax that’s raised in London, places like New York, it’s about 50%. So we are inevitably more constrained, more reliant on on deals and negotiations with the central government than than a lot of the cities that we’re competing with, globally. And, you know, that’s not to ignore the fact that we do have more control than other cities in the UK. And this shouldn’t be an either or situation. You know, there should be more devolution of funding across the board. So that cities can be in control of their own futures. We’ve got strong mayors in major cities across the country, who should have the power to to make these decisions as the directly elected representatives of these places. And that’s that’s not all we have at the moment. We have a short term crunch, as you rightly say, you know, we are exactly one month away from the end of the latest funding deal for TfL. And you know, these are those are opera, operational. People forget that the TFL was operating without central government funding before the pandemic, that’s a mind blowing achievement, you talk to pretty much any public transport operator in any major city around the world. And they are envious of the ability of TfL to fund itself. Yeah, and that was because the tube was making a surplus, significant surplus every year. And that was reinvested in supporting the bus network and, and other things. And you know, to be operationally, self funding is phenomenal. And but that meant that TfL was 70% of TfL, suddenly, more than 70% came from passengers compared figures in the 30s for equivalent networks in other cities. So when people stopped using the network during the pandemic, and did the right thing and stayed at home, the funding streams dried up. And you know, we should be absolutely clear that these these, these so called bailouts are our pandemic support. Yes, that is a direct result of people taking responsible courses of action. But it doesn’t mean you know, when you take that and when you take the additional spend on Crossrail, as a result of that delays, both the additional spend and the lost revenue from the last three years, when we should have had passenger fares coming in from the Elizabeth line. London has mortgaged itself to the eyeballs and that makes it very difficult to know it to be able to plan for for future investments. Now the first step is to make sure that we get TfL back to being what it wants, which is a fantastic sustainable manager and planner of the of the London Transport network and being able to invest in basic maintenance and upgrades, there controls 5% of the road network. And there are something like 45 major structures on each bit of the road network that are operating with interim safety measures, because there’s just not the funding to do the works properly. And, you know, we’re buying trains for big daily line at the moment, but not the signalling system that will enable them to operate at their, their planned frequency. I mean, like, there are all loads of these examples. But what it also means is that the planning for the bigger investments has been has been put on hold. And, you know, it’s all very well, the Prime Minister standing in a cross rail station saying we need to be thinking about Crossrail, two, but the the funding packages that are coming from his government are coming with strings attached that meant that that team has been put on ice in in TfL. And you know, and I think London is operate London wants to have that conversation and in businesses want to have that conversation. You know, what sort of we’re ready when when you are prime minister, but you know, those words have got to be got to be backed up with with actions and we’ve got to find new ways of funding these big projects. Andy Silvester 17:57 Yeah, you’re right, Boris saying, We really need to be thinking about Crossrail two, which for my memory is essentially depending on how you start it’s basically Epsom and or Wimbledon right up through to the northeast of London. So going the other way. But you’re right at the moment, there’s bailout packages pretty small bailout packages, so called bailout packages, pandemic emergency packages, I think is probably a better way of putting it as you did that come with various cost saving requirements on TfL. That in a TfL even you know, even the transport committee admits TfL has pretty much cut itself to the bone in order to meet those targets already, so there’s not really much fat left to cut so definitely one to keep an eye on but without ficient finishing on too much of a downbeat note. It is wonderful, I think to have Crossrail open again, Adam. Thanks for joining us to share in mostly the excitement of today but also a warning of what might be to come. Adam Tyndall 18:51 Hopefully it’s a suit the excitement is the signal of what’s to come. We can but hope. Thanks so much. Andy Silvester 18:57 Thanks, Adam. That was Adam Tyndall from London First and that’s all from us at The City View podcast today. My one advice to you is go and get on the train.