Does TFL need yet more government cash?
Updated: Dec 8, 2022
It's the default cry of the broken record that is London's Labour party, "Well if the government gave London more money...".
They use it as the excuse for everything. The latest use being the ULEZ scrappage scheme.
ULEZs implementation will see thousands of Londoners forced to scrap their perfectly decent car. Many will not be eligible for the Mayor's scrappage scheme, which is only offering a pitiful £2,000 and then only for those on benefits. Anyone who has been dutifully keeping their car going for years, therefore preventing waste, is going to be penalised.
"Well if the government gave London more money... then we could have a larger scrappage scheme". - they say.
Cost of ULEZ
ULEZ is going to cost around £200m to implement and a further £100m for the scrappage scheme.
The last scheme was around £61m and ran out fast. It's estimated that about 23,000 applications were made and just over 9,000 of them accepted. So we can presume that this £100m scheme will maybe help just over 10,000 people.
Of course, if the £200m set up cost was added to the scrappage instead, we'd have three times as many 'dangerously polluting cars' removed from the road.
Fans of ULEZ tell us that it'll generate revenue for TFL and I don't doubt that. No politician does stuff for free, especially not Mayor Khan. But, a little bit of logic says that this revenue will drop rapidly. As more and more cars naturally become compliant, fewer will be paying the cost of living tax that is ULEZ.
London politicians, who have seemingly spent very little time outside of the M25, like to tell me that London is under-funded and that our travel here is too high. They point to comparisons with Paris, Stockholm, Berlin and so on.
But they never point to other UK cities. I wonder why?
A study, carried out by The Guardian, shows why. London's bus costs are massively lower than almost everywhere else in the UK. Whisper it quietly, but we've got it quite good here!
Khan's bus-hopper fair will let someone cross the entirety of London for just £1.50. Meanwhile, places outside of London cost multiples of that. In fact, this bus hopper fare is one of the good things Khan has done.
From The Guardian;
"Analysis of a snapshot of five-mile bus trips in local authorities across England found that while a single bus ticket in London costs £1.50, passengers elsewhere pay far more despite often experiencing worse services.
The research showed the most expensive fare for a five-mile journey was in Hampshire, where a single ticket from Winchester The Broadway to Matterley Farm, Tichborne, costs £5.65."
Local bus fares in England increased by 71% between March 2005 and March 2018, according to DfT statistics. Yet in London prices of single tickets have arguably improved in value: in 2005, a single zone-one fare for Oyster card users was £1. Fourteen years later it is £1.50 to travel anywhere in the whole city."
Why is this the case? Thatcher... that's another debate for another time.
The fact is that London is already heavily subsidised compared to the rest of the UK.
Where is the money tree?
"The bankers the bonusses the bankers.... non-doms..." That's the answer, so we're told.
A tax on Non-doms, if not avoided by the super-wealthy (who are more than capable of finding another way to avoid a tax) would raise £5bn. It sounds a lot, but the NHS receives over £130bn a year and we keep being told that's not enough. So £5bn will vanish instantly.
The bankers are the next easy target. But they are already massively taxed. Banker's bonuses get taxed, so capping them could actually lower tax receipts. Whilst most UK businesses pay an effective tax rate of 19%, banks pay around 27%. Considering we saw a few weeks of Paris overtaking London for banking, you'd think we'd be a bit more shy about taxing bankers more.
Remember, a bank can move much easier than you or I can. They don't have to be in London.
So, whilst the lazy politicians shout about taxing bankers and non-doms and "more money from government", I thought I'd do some digging around at other options.
How would you react if I told you that there was an easily implemented tax, that didn't hit a single Londoner, but would raise over £100m a year for London and TFL? Sounds good right?
It's the Tourist Tax. Something you've probably paid if you've gone anywhere that isn't the UK.
Given Labour like to compare public funding to Paris, Berlin, and other European cities, it's only fair we compare them on tourist tax.
Paris (the world's most visited city) = €1-4 per person per night
Berlin = Flat 5% on hotel room cost
Valencia = €2 per night
Austria = 3.02% per person per night.
The list goes on.
London. £0. 0%
Professor Tony Travers of the London School of Economics told the London Assembly that a tourist tax could earn the city hundreds of millions of pounds a year. He points out that if every tourist paid £2.50 a night, London would earn around £102m per year.
So, the question is simple.
Why should Central Government give TFL even more taxpayer's money? Why should it rinse British taxpayer's further, to subsidise London and a poorly run TFL, whilst the rest of the UK suffers with worse transport links?
Why do all of that, when you could fund TFL's proposed scrappage scheme, every single year, with a simple tourist tax?
Will London's Labour politicians keep wagging their fingers at Westminster and demand even more money for Khan? Or will they do something truly helpful and get London funding itself?