Last-minute Tube rescue deal means fare hikes for London passengers

Public transport users in London are facing fare hikes after mayor Sadiq Khan secured a last-minute deal to save the service from financial collapse due to the coronavirus crisis.

The deal agreed with transport secretary Grant Shapps will also mean the suspension of Freedom Passes for elderly and disabled passengers at peak times and will load Transport for London with debt.

Mr Khan – who last year promised a fare freeze in 2020 – criticised the government for waiting until the last minute to offer a rescue package, with TfL on the brink of being forced to cut Underground, train and buses to a bare-bones service.

Agreement came after almost two months of negotiations, on the eve of TfL’s chief financial officer being forced to issue a Section 114 Notice, barring the organisation from committing to any spending going beyond its minimum obligations.

Speaking after agreement was reached, a mayoral source said: “The government has belatedly agreed financial support for TfL to deal with Covid-19 – as they have for every other train and bus operator in the country.

“But they have forced ordinary Londoners to pay a very heavy price for doing the right thing on Covid-19 by hiking TfL fares, temporarily suspending the Freedom Pass at busy times and loading TfL with debt that Londoners will pay for in the long run.”

Shortly before the deal was done, Mr Shapps made clear that he was making fare hikes a condition of government support.

“It is very important I think in providing a rescue package for TfL that the London mayor can work with that we don’t end up in a situation where people from outside the capital are unfairly carrying the burden,” he said.

But he left big question marks hanging over longer term support, telling the daily Downing Street press conference: “We don’t know what would happen if this lasted for very much longer and went on for more than a few months.”

Mr Khan was forced to seek a bailout after seeing revenues from fares fall by 90 per cent as commuters obeyed government instructions to stay at home, while TfL’s income from advertising and the congestion charge also declined sharply.

He told LBC radio: “We’ve been spending £600m a month, paying for services and getting nothing back from our customers, or very little.

“Although we had at the start of this crisis a cash reserve of north of £2.1bn, that is running out and we’re required by law to keep two months’ worth of money in reserve to pay for services.”

He said it “beggared belief” that the government had waited until the eleventh hour to provide support, at a time when Mr Shapps has been urging him to return the Tube to full services to allow a return to work under social distancing conditions.

Source: UK Politics - www.independent.co.uk