Government to force fare increases above inflation on TfL

Transport for London are set to increase fares above inflation in coming years according to a letter sent from Government this week following the Spending Review.

While there was no money for projects such as the Bakerloo line extension, government did offer a four year sum for renewal projects – yet in return TfL are expected to make efficiency savings and raise fares by RPI+1 per cent.

RPI is of course the highest measurement of inflation with last month’s coming in at 4.3% compared to the CPI measurement of 3.4 per cent.

The letter to TfL states:

“The funding in this settlement is provided against an assumed scenario that overall TfL fares will rise by the value of RPI+1 for each year of this settlement.

“The Department also expects TfL, as a public organisation, to produce, and deliver against, a new capital efficiencies plan, and to pursue all opportunities to make operating efficiencies and savings.”

Past form

Labour have form in pushing for above inflation fares on public transport when in power. Those of us in south east London who use Southeastern will remember when Labour let the franchise to GoVia in 2006 after it was in public hands following the collapse of Connex, with the then Blair government insisting on RPI+1 per cent fare increases each year.

That’s part of the reason a journey in south east London by rail costs much more than a similar journey by tube in, say, north London.

Now four years of above inflation fares look to be coming to TfL. In March 2025 government also pushed higher than inflation fares on rail and raised the price of railcards.

Given the tone so far of increasing fares, we await to see what happens under Great British Rail.

Pro-car, anti-public transport?

Those hoping for a public-transport friendly government may see many moves made so far as leaving much to be desired. The “temporary” fuel duty freeze was maintained while bus fare caps outside of London went from £2 to £3. Not affordable to retain it they said, though retaining the fuel duty freeze somehow was.

All in all for many in the party in the capital it’s been a disappointing first year. No money for projects like the Bakerloo line extension, enforcing higher than inflation fare increases and no action on rail devolution.

This week another £590 million was announced for the Lower Thames road crossing, though a Treasury minister put up for interview didn’t know where it serves nor what it will even cost.

That’s despite it being, at £10 billion, one of the country’s biggest projects.

In addition many of the rail cuts put in place under the Conservatives in 2022 are still in place such as across the capital including South Western Railway, Southern and many Southeastern Metro routes, despite Labour objecting in opposition. Some of those ensure connections from thousands of new homes to public transport links remain less than ideal.

And while the Treasury may not be keen to fund projects, they simultaneously won’t allow devolution of tax raising powers commonly seen in cities across the world to enable London to fund projects locally. A tourist tax being one glaring example.

Given all that it appears a bumpy ride for the capital under Labour until the next election.