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The Parliamentary Under-Secretary of State for Transport (Rachel Maclean)
It is a great pleasure to serve under your chairmanship, Ms Rees. I heartily congratulate my hon. Friend the Member for Dartford (Gareth Johnson) on securing this important debate. He and many other hon. Friends have put on the record their concerns at the Mayor of London’s plans to introduce a border tax for people and businesses travelling into the capital. We heard from my hon. Friends the Members for Gravesham (Adam Holloway), for Reigate (Crispin Blunt), for Orpington (Gareth Bacon), for Harrow East (Bob Blackman), for Carshalton and Wallington (Elliot Colburn) and for Hendon (Dr Offord), so we have a very good sense of the widespread impact of the concerns about this proposal.
The debate, rightly, has focused on the Mayor’s border tax. I will come to that in a moment, but behind this question lies a deeper concern that has been highlighted by many contributors, about the state of TfL’s finances, which brought us to this predicament. Let me say straight away that I do not doubt the impact that the coronavirus pandemic has had on TfL’s finances over the last year. I doubt any transport system in the world has emerged from the last 12 months unscathed, as people rightly heeded the Government’s calls to stay at home and the capital’s streets emptied. That is precisely why the Government have stepped in to help.
In May 2020, the Government agreed to support TfL with a funding settlement worth up to £1.6 billion. Following that, we agreed another settlement in October 2020, bringing the total value of financial support for TfL to more than £3 billion since the pandemic began.
It is worth pausing on that figure of £3 billion. The hon. Member for Ilford South (Sam Tarry) bemoaned the lack of a sustainable, long-term strategy. Three billion pounds has been provided to support TfL. It was confirmed in a statement to the House on Monday that this support would, once again, be extended, until May. I remind the hon. Gentleman that discussions are ongoing, to meet the exact call that he made—to put TfL’s finances on a sustainable footing for the long term. When we know how passengers are responding to the Prime Minister’s road map to safely unlock our economy, we can continue to work with TfL, as we have been doing throughout the pandemic, to once again explore what support it needs.
The issue, however, is that even before the pandemic, TfL’s finances were in a perilous state. As many of my hon. Friends have rightly said, years of mismanagement under the current Mayor left TfL completely unable to cope when the pandemic hit. By April this year, TfL expects its debt to reach £13.1 billion. The Mayor pursued ill-conceived policies designed to re-elect him, not to do what was right by Londoners. His fare freeze, which he was warned would have a devastating impact, has cost at least £640 million. The Mayor has failed to get a grip on pensions or excessive salaries. In short, TfL’s finances are out of control and we must tackle that, because people living outside the capital cannot be expected to keep picking up the tab for Sadiq Khan’s mistakes.
Unfortunately, rather than facing up to some of the difficult choices that need to be made to get TfL back on the path to financial sustainability, the Mayor has responded with politicking and measures that will punish working Londoners and their closest neighbours alike. Mayor Khan is increasing council tax by almost 10%. That means that the average band D property is now facing a council tax bill that is £31 more expensive than a year ago.
The other deeply concerning suggestion from the Mayor is that he might seek to introduce the so-called border tax that we have heard about today, which is a charge of at least £3.50 for every single vehicle that crosses into London. The Mayor seems to believe that London exists as an island, disconnected from the rest of the country. Nothing, of course, could be further from the truth. Just as London is critical to the success of the country, so the success of London is fed by countless thousands of individuals who commute to London from outside its boundaries.
An estimated 1.3 million vehicle journeys are made into London every weekday. Critical workers travel into the capital from the constituencies mentioned today, including that of my hon. Friend the Member for Dartford, to work in London’s hospitals, supermarkets and schools. These are the people who the Mayor proposes to punish for his financial ineptitude during his time in office. It is important not to underestimate the impact that such a border tax could have. A driver who travels into London every weekday could face a bill of almost £1,000 a year—devastating at a time when people and businesses are trying to recover from one of the worst economic downturns of the past century.
This would be a border tax levied on people outside London by a Mayor they were not able to vote for or, indeed, vote out. I am a firm believer that there should be no taxation without representation, as such a move would fly in the face of the Mayor’s supposed mantra that London is open. For that reason, I put it on the record that this is an idea that the Government do not support.
Under Sadiq Khan’s leadership, TfL’s debt has risen, projects have been delayed and income has been thrown away on pet projects. It is unacceptable that the Mayor will now seek to recover the money that these failures have lost by introducing a deeply damaging border tax on families and businesses surrounding London. I once again thank my hon. Friend the Member for Dartford for securing this debate and giving his constituents a voice in this House. As families and businesses rebuild, we need a Mayor of London who will support them by getting London’s finances back on the path of sustainability and who will stop threatening measures that could set London and, indeed, the rest of the UK back by decades.