The missing £500 million: Taxes from London drivers not spent in London

With much talk about TfL’s budget problems there’s a major change made over recent years that hits TfL and London hard, and it’s one that’s little talked about.

Under previous chancellor Phillip Hammond a decision was made that all annual income raised from drivers across the country would be reallocated from general taxation to a dedicated road fund for Highways England. Highways England maintain hardly any roads in London and TfL’s network of 360 miles of roads do not see a penny from the fund.

Coupled to a £700 million grant cut in 2015 from Government to TfL and this results in London’s public transport users subsidising roads in the capital, and it’s not enough to do more than the very bare minimum to maintain roads. Infrastructure is now suffering across London.

This even horrified some Tories in London, who wrote to their Conservative government colleagues in 2018 asking for more of the £500 million raised from drivers in London to be spent in London. Here’s a letter from then-Tory GLA member and Bexley Cllr Gareth Bacon (now MP for Orpington) asking for it to be changed:

Funnily enough most of those who were opposed to this policy in 2018 now seek to portray financial issues as not down to covid, or cuts, or government retaining taxes derived from drivers in London such as VED, but “TfL waste.”

I remember watching a GLA meeting when Tory Assembly Member Keith Prince found out. He could barely believe it. Here’s Keith Prince now:

Bacon has also gone from questioning why £500 million is not being spent on London infrastructure, to blaming the current Mayor:

In a return letter, Robert Jenrick (yes, that one) said as Londoners drove outside London it was ok to now give all income from London drivers to an organisation that barely manages any roads in London. He also stated it was fine for public transport users to subsidise drivers; a stance no other country in the world takes.

TfL warned they would have to cut back maintenance severely, and also utilise as much public transport fare income as possible to keep the road network usable.

The loss of income from grant cuts and no VED allocation to TfL is severe, and we have seen numerous problems with maintaining core infrastructure such as Hammersmith Bridge and the Rotherhithe Tunnel.

Despite that, TfL have reduced the operational budget deficit in recent years – though it took cuts to various bus routes and staffing at tube stations.

Many other Tories have also reverted to the party line since concerns in 2018, and like mayoral candidate Shaun Bailey aren’t keen to talk about the VED issue. It’s the same story with £700 million in annual cuts made to TfL’s budget in 2015. Added together with Vehicle Excise Duty, that’s a possible £1.2 billion deprived from the capital each year.

It dwarfs by some magnitude any of Shaun Bailey’s quoted cost savings and examples of “TfL waste”.

His latest example is £44 million he claims it costs for one free travel pass given to each member of TfL staff. This is a perk they have enjoyed for decades under all governments and parties.

Bailey is spinning it as passes for “flatmates”. Note the plural. In reality it’s one pass per staff member, and it mostly goes to spouses

Before that his argument was wages. Specifically £55.7 million in TfL salaries. Even if all saw salaries cut in half at a stroke, is £28 million saved going to eat into a covid related fall in income of £2+ billion, let alone the issue of TfL’s loss of government grant AND £500 million from VED? No. Bailey’s “savings” are chicken feed in context.

No transport organisation in the rest of the UK, or the world, could withstand what is happening. Indeed, private rail franchises and bus companies outside London didn’t withstand it – and they got a relatively string-free bailout.

The line that TfL was bankrupt before this spring is a complete lie. A lie that is transparently untrue to anyone who spends two minutes looking into it. Hence why opposition to measures proposed by Government have come from all angles in recent days, both left and right. The latest are business organisations in the capital. Business knows that public transport benefits the economy. It takes cars off the road for deliveries. It gets staff to work.

The future of @TfL funding affects the future of Londoners! Today @SELondonChamber alongside all central & local @londonchamber delivered letters to representative MPs in a synchronised campaign. Read the full letter:✉️ https://t.co/9fNwSDeZ70#SouthEastLondon #ChamberofCommerce

— SE London Chamber (@SELondonChamber) October 23, 2020

TfL certainly isn’t perfect and has issues to address, yet the main cause for problems before covid was cuts from the very same ruling government now demanding severe cuts, vast fare increases, council tax rises and a congestion charge increase across much of London.

From the Prime Minister down this week we’ve seen lies and efforts to treat the public quite frankly as idiots. The same prime minster who was Mayor of London from 2008 to 2016 and oversaw many policies that Bailey is now stating “bankrupted” TfL.

Shapps, Johnson, Bailey and certain lackeys in London may be digging in with their lies, though its merely reinforcing how they’re take voters for mugs. Things like that 2018 letter reveal what was happening. Certain Tories may now change their tune and blame others, but successive attempts to cripple TfL are in the public domain.

It should be noted that some Tory Cllrs in Greenwich borough are not supporting what others in the party are doing.

One major own goal for TfL however is Silvertown Tunnel, and it’s a terrible look to argue for more cash while presiding over a PFI project with escalating costs – even if most of the cost will hit London for years to come rather than in the immediate future. It’s a project that relies on an increase in vehicles, and proponents attempt to deflect criticism by offering a handful of bus routes. Yet in future are those assumptions of traffic accurate, and will they even be able to afford sufficient new and extended bus services?

Silvertown Tunnel

TfL project an increase from 3,500 vehicles an hour at 5pm to 5,000 an hour when Silvertown Tunnel opens:

This will result in additional congestion through Greenwich, Blackheath, Kidbrooke, Eltham and Falconwood according to TfL.

When asked about congestion Mayor Sadiq Khan notably only talks about alleviating northbound morning congestion and repeatedly fails to talk about afternoon southbound congestion.

This selective method of addressing concerns hardly presents a straight up Mayor in negotiations, even if letters from Grant Shapps do show who is calling the shots.

Without the Silvertown Tunnel Khan would be in stronger position. With it, it’s a £2 billion albatross. One thing on his side is hapless Bailey is a supporter too.