As was reported yesterday, the Chancellor, George Osborne, will this week announce extra grants from the Treasury to moderate the big transport fare increases proposed for January. About £130 million, it is reported in the Sunday Times, will go to Transport for London.
Fares overall will still increase, and by more than inflation. But the rise is now capped to RPI plus 1 per cent instead of TfL’s previously-announced RPI plus 2 and the railways and Travelcards’ RPI plus 3.
Thus the rise in London will now average about 6 per cent across the board instead of the previously-announced 8 per cent (on Travelcards) or 7 per cent (on Oyster pay-as-you-go and cash singles.)
The actual new prices haven’t been given yet. But it should mean that, for instance, a zones 1-6 Travelcard goes up by about £120 a year instead of £160. A Zones 1-2 Travelcard will go up by about £66 a year instead of £88.
This begs a few questions. Firstly, given TfL’s massive spending on Crossrail and the like, it was intended that fares would continue to rise by RPI +2 until at least 2015. So are we simply we going to create a hole in TfL’s income that will have to be filled with even higher fare rises in 2013?
The answer is that it does look like Osborne’s £130 million (if confirmed) will be enough to last longer than one year. The originally-announced increases were due to raise £202 million next year, of which £92 million was from Travelcards and £110 million from the rest.
If the increases are now being reduced by about a seventh (or a quarter, for Travelcards) that will cost about £38 million next year, leaving another £92 million of the Osborne money to at least make sure that fares do not have to rise by more than planned in 2013 and beyond. It might even be enough to cap them, or some of them, below the planned levels in future years, too.
The second question is how, if at all, this affects the 2012 Mayoral election. Ken Livingstone has recently taken to claiming, rather implausibly, that he will cut fares if returned to City Hall. (Ken has promised to hold down fares at every mayoral election he has ever fought. Every single time, as he admits in his own autobiography, he has “broken my promise” once safely elected, or secretly planned to break his promise.)
The new Osborne move might however allow Ken to claim, perhaps more plausibly, that the Tories are feeling the heat from his policy. Boris Johnson, meanwhile, could argue that he has won extra money for London in a way which a Labour mayor could not.
When the actual revised prices are announced, I wonder whether it might it be politic for Boris to use some of the Osborne money to freeze some of the more totemic fares? I’m thinking especially of the Oyster bus single fare, which is due to rise from £1.30 to £1.40. Since TfL (for some reason, in the Oyster age, which I can’t quite understand) only prices in 10p units, this fare is unlikely otherwise to benefit from Osborne’s largesse. Just a thought, lads…