The Impossible Promise? Sadiq Khan Says He'd Freeze Fares For Four Years

Rachel Holdsworth
By Rachel Holdsworth Last edited 30 months ago
The Impossible Promise? Sadiq Khan Says He'd Freeze Fares For Four Years
Photo by Andy Thornley.

Labour's mayoral candidate is promising to freeze tube, train and bus fares in cash terms until 2020 if he's elected next year. Sadiq Khan has been reiterating his campaign pledge ahead of the expected announcement of next year's fares.

The row over fares dominated the 2012 election, and all we can ask at this point is: how are we here again? Transport for London argued last time that freezing fares would seriously affect upgrade work and new infrastructure, and the financial situation is even more precarious now. TfL is funded from a variety of sources: fares currently make up 40% of its income, and there's also a grant from central government. Here are the numbers for that grant over the past few years:

  • 2013-14 £1,091m
  • 2014-15 £835m
  • 2015-16 £659m

Funding levels have only been agreed up to the end of the financial year 2015-16 — i.e. next April. It's expected that the chancellor's autumn statement will contain news for TfL but, with the Department for Transport having agreed a 30% cut in spending, that news is unlikely to be good. For Khan's campaign to say he knows what he'd do with fares before he even knows how much money he'd have is foolhardy at best.

We spoke to respected transport journalist Christian Wolmar when he was campaigning to be Labour's mayoral candidate. Even after navigating TfL's labyrinthine budget, the assessment of Wolmar and Tony Travers, another acknowledged expert on London's government, is that there just isn't the money. Wolmar told us:

There is £1.5bn or £2bn in there; Tony Travers has talked to TfL and they say it’s absolutely necessary for future investment needs, it’s earmarked. I think it would enable us to freeze fares for a year and we could play with it — we might be able to freeze fares for two years or, more importantly, we could cut the extra 40p, 50p increases you pay for each zone. But even if it is £1.5bn, £2bn that’s in there, it’s not enough to freeze fares for four years. It just isn’t.

Khan's campaign says the money can be found by efficiency savings within TfL. We're highly sceptical; even closing all the ticket offices and cutting around 830 jobs will only save about 6% of what TfL needs to find, according to the RMT. Labour also points to Stephen Greenhalgh, the current deputy mayor for policing and crime who bid to be the Tory mayoral candidate partly on the basis of cutting fares by 3%. That was a ludicrous promise then and it remains so now. Labour do themselves no favours by using it as an example.

So if fares really are to be frozen, with TfL's grant income falling, what could be the effects? We can foresee a combination of some or all of the following:

  • Slowing down of upgrade works — would cover signalling, new trains, accessibility etc
  • Cancellation of some upgrade works
  • Cuts to services — buses are generally where the axe has fallen in the past
  • Cuts to staffing levels
  • More advertising and sponsorship on the networks
  • More sales of TfL land to private developers
  • More space at stations given over to shops and other businesses

We all want cheaper fares. That's obvious. But in the current political climate you can't peg fares to below inflation and not expect consequences. So, London: what's it to be?

Last Updated 12 November 2015

Continued below.

Paul Corfield

Well I'm glad you've written this. There's no magic money tree. The government will almost certainly impose revenue grant cuts which means less money to actually run things. This is rather stupid as we head towards a time of TfL needing to vastly increase service volume. There are planned improvements on the tube, DLR, Overground and most of all Crossrail. Crossrail has to earn a surplus to pay back borrowing. If you start depressing the revenue base too much then TfL's credit rating will be damaged as will its ability to pay back borrowing or borrow more money for future projects. I can't see George Osborne being remotely sympathetic to a Labour Mayor so the downward pressure on funding will continue. So far TfL have clevely juggled money and projects around but the scope to do so gets less and less each year.

If Mr Khan tries to pull down fares that TOCs use on their Greater London services then he will be forced to find additional compensating funding to keep the franchise agreements "whole". Boris is already paying out millions to Greater Anglia in respect of fares harmonisation on West Anglia and millions more will be paid when Stratford moves to Zones 2/3 in Jan 2016. How many more tens of millions are going to be shovelled back to the DfT if TfL fares are cut? Remember that C2C, Abellio Greater Anglia, Chiltern Railways, First Great Western and parts of TSGN all use the TfL farescale so cut those fares and you to compensate those TOCs.

The best thing Mr Khan can do is, as you say, tell us where the money comes from for the fares freeze. What gets cancelled, what gets scaled back, what does TfL stop doing entirely. How many TfL staff are going to be sacked and how many related jobs in the supply chain are going to be lost? How many concessions are going to be lost or scaled back? Will children have to pay fares? Will the 60+ pass be scrapped? Do Veterans or Apprentices lose their fare concessions? These are all TfL funded concessions so are within the Mayor's direct control.

I certainly don't want to see the emerging programme of bus service improvements being stopped almost before it starts. I imagine people across London want the Tube upgrades speeded up not put at more risk. Users of the Picc Line and Bakerloo Line have already seen a delay of 10-15 years for upgrades on their lines. There's a much greater win to be hand in being "boring" and getting these upgrades speeded up even if it meant an unpopular decision to increase fares a bit faster to create some hypothecated funding for that. On fares there are far more subtle tweaks that can be made around capping in order to offer better value for travellers and which are unlikely to be as damaging revenue wise if they are cleverly targetted.

Paul brandford

If the fares are to frozen, then why not also freeze the salaries, that are well over the average Londoner's income?

Greg Tingey

Kahn is cynically using a standard weakness of the electorate - they can't handle numbers & especially, they can't handle statistics.
It can't be done - & he probably knows it can't be done, but hey, who cares if it gets him elected?
I will probably be voting Pigeon (Sp?) this time, with Zac as second preference, since this empty rhetoric of Khan's shows that he can't be trusted

SaveTubeTicketOffices

What station is in the picture?