At the Transport plenary this week, l was not sure who TfL were kidding with the implications of a fares freeze?
Firstly the inflation figures used by TfL are out of date and far too high, being based on RPI plus 1 per cent even though fare rises of the last 3 years have been at just RPI. In the meantime is deson’t seem to have taken on board the impact of energy costs going down particularly for petrol, gas & diesel. Its is not uncommon to see petrol at just over £ 1 a litre while diesel being below £1 a litre and surely with TfL purchasing power it should be able to get better deals with which to run our buses & trains. Drivers of cars will recollect when it was £ 1.50 a litre for petrol on the forecourt and with the lifting of sanctions on Iran who is to say we are not entering a period of petrol, gas & diesel at around £ 1 per a litre for the next Mayoral term?
Incredible TfL are using figures of 3.5 per cent inflation for 2018, 2019 and 2020 when even the target figures for the Bank of England is to keep inflation to below 2 per cent by government.
We also hear that if we don’t have these hikes, it will cost investment in our transport infrastructure. Well can l suggest that TfL senior managers go along and meet their counterparts in Thames Water who have recently raised the finances for the Thames Tideway Tunnel. I was told at a recent event l was hosting at City Hall that it was originally estimated that it would cost £ 80 per household after the works to finance the Tideway Tunnel under the Thames, it is now less than £20 per household, reflecting well that its never been cheaper to raise public finances on the markets. With these kind of figures, it should mean that it should substantially cost less to finance the investment we all want to see in the transport infrastructure of London.
So who are TfL kidding about the impact of a fare freeze when their annual revenue costs and capital costs are getting cheaper? It appears TfL are trying to have it both ways, maintaining hikes in the fare box whilst having the advantage of reduced out goings when this should be passed on to Londoners through a fare freeze.
If the real concern is about the impact of the cuts in government grants on the fare box than this should be made much more clearer to us by TfL as l suspect is the case.