Transport for London: Funding

Rachel Maclean Excerpts

Monday 30th November 2020 Westminster Hall

[The Parliamentary Under-Secretary of State for Transport (Rachel Maclean)]

It is a great pleasure to serve under your chairmanship, Sir David, and to respond to the debate. Before I get into the substance of the debate, I want to echo the tributes that have been paid to Transport for London workers who have kept services running throughout the pandemic. I travel on the tube regularly, so I have seen the great way in which they provide those services.

I thank my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) for introducing the debate and all Members who have contributed. We have heard contributions from the hon. Members for Hammersmith (Andy Slaughter), for Hornsey and Wood Green (Catherine West), for Ilford South (Sam Tarry), for Erith and Thamesmead (Abena Oppong-Asare), for Enfield, Southgate (Bambos Charalambous), for Richmond Park (Sarah Olney) and for Putney (Fleur Anderson), and from my hon. Friends the Members for Orpington (Gareth Bacon), for Cities of London and Westminster (Nickie Aiken), for Wimbledon (Stephen Hammond) and for Ruislip, Northwood and Pinner (David Simmonds). It sounds like a tube map, but everyone made excellent points, and it is a pleasure to respond to them all.

First, it must be recognised that free travel for under-18s is unique to London compared with the rest of England. This should not be a debate about the merits of free travel. The Government recognise the merits of free travel for the most disadvantaged under-18s, which is why it is enshrined in the Education Act 1996 and children will continue to receive it.

Today, we are talking about those benefits that are different in London, and are not available to people in the rest of the country, no matter how disadvantaged they may be. It is important to get that point on record at the outset. Taxpayers all over the rest of the country—in Birmingham, Manchester, my Redditch constituency and other places where the need is just as great—do not enjoy this special benefit. They will rightly ask, “Why does London receive this?”

[Andy Slaughter]

So much for levelling up.

It is dispiriting to hear a Government Minister, particularly when addressing a group of London MPs, once again using divide-and-rule tactics, trying to set other parts of the country against London. Will the Minister address the issues that have come up in this debate and Members’ serious concerns about our constituents?

[Rachel Maclean]

Of course I will address those concerns. I am about to do that, but I am highlighting the facts at the outset.

[Sarah Olney]

Will the Minister give way?

[Rachel Maclean]

With respect, I do not think I can give way. I want to address the substantive points, but I will be happy to talk to hon. Members on another occasion.

My hon. Friend the Member for Carshalton and Wallington highlighted in his opening speech the shocking extent of the Mayor of London’s financial mismanagement of Transport for London. We all know that coronavirus has cost £1.6 billion in lost fare revenue, but Mayor Sadiq Khan’s mismanagement of Transport for London’s finances has cost £9.56 billion in the round, and we heard many examples from hon. Members during the debate.

We can all agree that the transport network is key in supporting a safe and sustainable recovery for London. That was why, on 31 October, the Government agreed a second extraordinary funding and financing package with TfL for up to £1.7 billion, on top of the £1.6 billion funding package agreed with TfL in May. That is proof of the Government’s commitment to supporting transport services in London while remaining fair to national taxpayers.

The May funding agreement with TfL contained a series of measures to manage demand and to facilitate safe travel, including a temporary suspension of free travel for under-18s. I stress that that was agreed by the Government, the Mayor of London and the deputy mayor for transport. However, the suspension was not operationalised at the time. No one doubts the importance of free travel. It was always the case that children eligible for free home-to-school travel would continue to receive it, with families on low incomes—those most disadvantaged children—continuing to receive that free travel. It is right to say that the rationale was demand management, as before the covid-19 crisis, around a third of journeys were made by young people travelling to school.

[Sarah Olney]

Will the Minister give way?

[Rachel Maclean]

Very briefly, because I have several points to make.

[Sarah Olney]

I pointed out in my speech that in normal, pre-pandemic times, TfL raised about 80% of its own revenue. It was not primarily subsidised by taxpayers, so it is not by and large taxpayers who pay for free travel for young Londoners—or, indeed, for elderly Londoners.

[Rachel Maclean]

I remind the hon. Lady that central Government have agreed billions of pounds of support for Transport for London.

The initial reason for bringing in the suspension, or discussing it, was because it was seen as necessary to ensure that capacity was available on buses for those who needed to use it, including some schoolchildren, given social distancing requirements. At this point, I would like to refer to the Government’s commitment to support cycling and walking, or active travel. People should walk and cycle wherever possible, and that is why the Government have made £2 billion available to support it. According to TfL’s own statistics, the average journey to school in London is less than 1 km, so it is not unreasonable to suggest that some of those journeys could be made by active travel.

As part of the latest £1.7 billion of extraordinary funding agreed by the Government and TfL on 31 October, national taxpayers will continue to fund free travel concessions to standard English levels, and free travel to school for children who qualify under legislation. If the Mayor wishes to maintain concessions for Londoners above the English level, he will raise the money to pay for that. That represents a fair position for the whole country and brings London in line with the rest of England.

In agreeing the recent extraordinary funding and financing package, the Mayor proposed that he could pay for those concessions by retaining the central London congestion charge at its current level and increasing the existing TfL element of the Greater London Authority’s council tax precept. He must make his final choice by January 2021. It is the Mayor who has decided what the increase to the congestion charge should be and what the coverage is.

Several hon. Members raised the question of Hammersmith bridge. They will know that my noble Friend Baroness Vere of Norbiton is working on that and leading a taskforce. TfL has been given £4 million and a further £2.3 million for immediate mitigation, and a lot of detailed work is ongoing to sort the problem out.

Turning to TfL’s financial situation, the Government did agree a second package that will provide financial support until March 2021. The Government will make up the fare revenue that TfL has lost due to covid-19. The deal runs until 31 March, and the Government will continue to monitor TfL’s financial health and work closely with it to ensure that it continues to operate essential services and supports our recovery from the pandemic.

I would also like to put on record the fact that the Government are not forcing the Mayor of London to raise council tax. If he does so, it will be his decision and his alone. The Department works closely with him and constructive discussions are ongoing. Of course, I remind the Opposition that the Mayor of London is a politician, but nevertheless there are constructive discussions going on, as we have seen from the deals that have been agreed, which benefit Londoners and the transport network on which they rely.

As hon. Members have pointed out, the financial package agreed itself recognises that the Mayor of London has not done enough to find savings. His financial management has not been good enough, and further efficiencies must be found. Opposition Members have highlighted the impact on young people, so I must be clear: it is for the Mayor of London to explain to those young people why he has made the choices that will have those devastating consequences that Members are setting out. The Government have stood behind Transport for London to the tune of £2.3 billion. I suggest it is now time for the Mayor of London to take responsibility and show genuine leadership, instead of seeking to lay all his problems at the door of central Government.