Category Archives: Financial and Taxes

Another 4 Years of Sadiq Khan, and Rail Renationalisation plus a Petition to Sign and a Public Consultation

Posted on by
2

So in London we have another 4 years of Sadiq Khan as Mayor. That will certainly mean higher Council taxes and more taxes on motorists. Sadiq Khan helped himself to win the election by promising free school meals to primary pupils and no rises in public transport fares – paid for out of your taxes of course.

With a possible Labour Government in Parliament, the outlook is indeed bleak for financial prudency. Labour have promised to “renationalise” the railways when part of the rail network is already in Government ownership and all of it is very heavily subsidised. The Taxpayers Alliance have published a note on this subject showing how misconceived it is – see https://www.taxpayersalliance.com/briefing_railway_renationalisation . As the article points out, “Three of the four largest subsidies given to franchises in 2022-23 were given to renationalised railway services with £697 million, £602 million and £402 million given to ScotRail, Northern and South Eastern respectively”. That’s not peanuts!

Boris Johnson has pointed out that Transport for London (TfL) has been “bankrupted” by Sadiq Khan and he is right. Massive subsidies coming out of taxpayers and motorist’s pockets are the only thing keeping it afloat. Khan wants billions more pounds in subsidies which he might get from a Labour Government, or from a London road tax which he has already asked for.

Three ways that taxes are likely to be raised in London on motorists are by ULEZ schemes,  LTNs and road charging “pay per mile” schemes. There is a new Parliamentary Petition you can sign to enable these to be controlled by Government. Please sign it:  https://petition.parliament.uk/petitions/659730

There is also a Public Consultation on “Restricting the Generation of Surplus Funds from Traffic Contraventions” from the Department for Transport – see https://www.gov.uk/government/calls-for-evidence/restricting-the-generation-of-surplus-funds-from-traffic-contraventions . This is definitely worth responding to as it is clear that many local councils are abusing their powers simply because they wish to raise money to fill their budget holes. It’s not about improving road safety or regulating traffic or parking.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

TfL is a Financial Basket Case

Posted on by
6

Transport for London (TfL) is a financial basket case. Its income is much less than its costs so it has a budget for 2023/2024 of income from passengers of £5.2 billion but costs of £10.5 billion. In other words, it is spending twice its income! The difference is mainly made up by Government subsidies of various kinds including regular bail-outs when it runs out of cash.

A summary of the finances can be seen on page 4 of the TfL Quarterly Performance Report last published – see https://content.tfl.gov.uk/tfl-quarterly-performance-report-q2-2023-24-acc.pdf

TfL is in essence a business that provides transportation to the public and it should be run like one. Some borrowing to finance capital expenditure may be justified but the approach by Sadiq Khan who chairs the TfL Board is simply financially reckless. Income from fares should cover operating costs.

Financial mismanagement is the key problem at TfL.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Ludricous Costs of HS2 – HS2 or a Free Rolls-Royce?

Posted on by
Reply

The Government seems likely to “pause” the continuation of HS2 to Manchester. In other words after a face-saving period of time it will be scrapped. I have repeatedly warned about the cost of this project – originally estimated to be £56 billon but due to cost escalation more likely to now be £100 billion. That’s about £15,000 for every man, woman and child in the country.

Personally I am never likely to travel by train to Birmingham or Manchester (I have not in the last 70 years despite living in both London and Birmingham) so I object strongly to my taxes being spent on this project

Only relatively few people will regularly use the line so the cost per user is much higher. To put it another way, if instead of building HS2 we spent the money on providing a new Rolls-Royce car to everyone who asked, we could provide over 300,000 vehicles at nil cost to the customers. That’s more than enough to cover the likely regular users of the line.

The other problem with this project is the poor benefit/cost ratio which now seems likely to be negative. This is what I wrote in August 2018: “Back in 2013, the benefit/cost ratio of HS2 was calculated by the Government to be 2.3. What it is now, after a major escalation in costs, is not at all clear. But it seems that the only justification for continuing with it is the possible boost to the economy that might be needed if a “hard” Brexit is the outcome.

Surely this is another project that should be canned sooner rather than later, simply because there are better things to spend the money on – and that includes not just railway lines.

It is of course fortunate that we have some benefit/cost information on the above two projects [HS2 and Rotherhithe Bridge]. TfL (and the Mayor of London) now often fail to provide such information. Figuring out whether the ULEZ scheme is worth doing for example is not easy. But in reality it’s wildly negative – see http://www.freedomfordrivers.org/Cost-of-the-ULEZ.pdf

It is unfortunately a symptom of the modern trend to make major public policy decisions on irrational grounds. They just need to sound appealing to a few segments of the population (preferably those who might vote for the politicians backing the proposals), when economics should be the key decision basis”.

What I said then still holds true today.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Mayor’s Budget – Another Stinker

Posted on by
5

Sadiq Khan has published a proposed budget for the GLA (including TfL) for 2023-24 (see https://www.london.gov.uk/who-we-are/governance-and-spending/spending-money-wisely/mayors-budget ).

This is yet again a budget reliant on central Government bail-outs rather than a budget that keeps expenditure within income. It’s a “spend, spend, spend” socialist budget.

1.       This budget again blames central Government for inadequate funding of London’s public services and in particular TfL (see page 4 Paragraph 1) when the budget has not been set so that the GLA operates within its available income. This is financially reckless.

2.       The document identifies a new concept of “climate budgeting” so as to achieve Net Zero Carbon by 2030. This is financially impractical to achieve and asks effectively for even more central Government funding when there is no cost/benefit justification provided. See page 25.

3.       The budget proposes a substantial increase in “Strategy and Communications” (see page 33) which is not justified. The Mayor already spends too much on public relations and social media activities a lot of which is in essence political promotion of the Mayor.

4.       The budget includes the cost of expansion of the ULEZ to outer London which involves significant capital expenditure (see page 105). It is now budgeted that income from the CC, LEZ and ULEZ taxes will be over one billion pounds in 2023-24 (£1,028 million – see page 74). In effect private motorists and commercial vehicle operators are subsidising public transport losses within TfL. This is unfair and unreasonable. There is no financial justification for expansion of the ULEZ.

5.       The Mayor’s attempts to reduce traffic congestion by using taxation in the CC, LEZ and ULEZ schemes has proved to be totally ineffective. Recent media reports confirm that London is now the most congested city in the world. The budget does nothing to reverse this trend as there is no expenditure proposed to improve the roads or traffic flows.

6.       In summary, this budget is financially incompetent and continues to support expenditure that is higher than the income that TfL and the GLA will receive. This is not a budget set on sound financial principles but one set based on political prejudices and unrealistic policies.

Please send in your own objections to GLAbudget@london.gov.uk within the next two days.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

The Financial Lunacy of the ULEZ Expansion

Posted on by
Reply

The London Evening Standard have published a good article highlighting the financial lunacy of the ULEZ scheme. By 2027 they suggest that the scheme will generate zero income even though it will cost £160 million to implement the expansion.

TfL might recover the £160m in the first year from charges but the vehicle population will rapidly become compliant and after that the cost of running the scheme might exceed income from charges on non-compliant vehicles and fines.

Of course that assumes that the vehicle standards remain the same but don’t bet on that! The Mayor could use the new cameras to impose a London-wide charging scheme on all vehicles which is clearly his ambition.

The article also reports that some boroughs may try to frustrate operation by blocking the erection of cameras which no doubt many residents of the outer London boroughs will welcome.

Comment: This is yet another example of the financial incompetence of Sadiq Khan. Spending money to enable the collection of more taxes is just another financial imposition on London residents that will increase the cost of living.

Remember there is no significant improvement in air quality from the ULEZ expansion. It’s just a money-making scheme.

Evening Standard article: https://www.standard.co.uk/news/london/ulez-expansion-sadiq-khan-pollution-scheme-300m-zero-2027-london-vehicles-b1050769.html

Roger Lawson

Twitter: https://twitter.com/Drivers_London

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Another Bail-Out for TfL Agreed

Posted on by
3

Transport Minister Grant Shapps and Mayor Sadiq Khan have agreed another £1.6 million of funding for Transport for London (TfL) as part of a “long-term settlement”. That now makes a total of £6 billion of Government funding which of course comes from taxpayers not just in London but from the whole country. That’s about £100 for every man, woman and child in the UK.

The funding will support new Piccadilly line trains, as well as modernisations and upgrades across the District, Metropolitan, Hammersmith and City and Circle lines. It will also support the long-awaited repair of Hammersmith Bridge, the extension of the Northern Line, improvements to Elephant and Castle station and £80 million every year for active travel schemes (mainly cycling schemes).

The Mayor has agreed as part of the settlement to reform pensions and work on the introduction of driverless trains on the underground. But he is not happy with the outcome. He said in a press release: “The Government is still leaving TfL with a significant funding gap, meaning we will likely have to increase fares in the future and still proceed with some cuts to bus services. There are also onerous strings attached, such as the Government’s condition requiring TfL to come up with options for reform of TfL’s pension scheme at pace, which could well lead to more industrial action and more disruption for commuters”.

Comment: By funding gap he means TfL will continue to lose money. Users of TfL services, particularly bus passengers, will continue to be massively subsidised instead of paying the true cost of their journeys. Why should that be so?

Grant Shapps has yet again avoided the proper decision which should have been to take control of TfL away from the Mayor. Will the Mayor stand up to unions when strikes are threatened over changes to working practices and pension schemes? I doubt it.

Grant Shapps Press Release: https://www.gov.uk/government/news/future-of-londons-transport-network-secured-with-governments-multi-billion-pound-settlement

Sadiq Khan Press Release: https://www.london.gov.uk/press-releases/mayoral/statement-from-the-mayor-on-tfl-funding-1

Roger Lawson

Twitter: https://twitter.com/Drivers_London

TfL Board Meeting and Finances

Posted on by
1

TfL Board Meeting and Finances

gold colored coins near calculator

There was a Transport for London (TfL) Board Meeting on the 9th of August to discuss negotiations with the Government on finance. Such meetings should be public but in fact almost all the meeting was closed to the public; even the Government representative who has a seat on the board was excluded.

But there is an interesting board paper that spells out the dire financial position of the organisation – see link below. In summary they need £900m in Government subsidies to stay afloat in the current financial year, i.e. to offset the shortfall in revenue from the pandemic.

The paper says this: “The 2022/23 TfL Budget is based on a ‘managed decline’ scenario. This involved significant service reductions, deteriorating asset condition and no new enhancement schemes. This not only would mean that we will fail to make progress on critical priorities such as safety, decarbonisation and air quality, but it would trap London’s transport network in a vicious circle of deteriorating services and declining demand. Avoiding managed decline is critical to supporting the London economic recovery, and therefore the national economic recovery, following the pandemic”.

In essence they want to continue spending instead of cutting their cloth to meet the new circumstances. They need £1.2 billion just to balance the budget in the current financial year and even more for “longer-term capital funding to avoid the managed decline scenario”.

Looking at TfL as a business (which is what it is) this is surely pure hogwash. Businesses that do not reduce their expenditure to match income end up going bust. As will TfL unless they change their approach.

It’s interesting to look at who is on the board of TfL. It’s full of academics, trade unionists and politicians, not business people. And it’s chaired by Sadiq Khan. This is one of the key problems. Until TfL is taken out of the control of the Mayor and the board is replaced by people with business experience of running transport organisations, nothing will change. They will continue to rely on Government (i.e. taxpayer) hand-outs rather than taking the tough decisions necessary.

Roger Lawson

Board Paper: https://board.tfl.gov.uk/documents/s18400/board-20220809-item03-Update%20on%20TfL%20Funding.pdf

Twitter: https://twitter.com/Drivers_London

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Comments on the Energy Security Bill and the Next Prime Minister

Posted on by
Reply

Yesterday the Government introduced the Energy Security Bill into Parliament. It is good to see that the Government continues to function after the recent political upheavals, but would it not be good to get back to some normality as opposed to the recent dramas?

The new Bill aims to:

–         Boost Britain’s energy independence and security.

–         Attract private investment, reindustrialise our economy and create jobs through new clean technologies, as well as protect consumers.

–         Introduce new powers to help prevent disruption to fuel supply because of industrial action, malicious protests and on grounds of national security (comment: surely to be welcomed).

See https://www.gov.uk/government/news/plans-to-bolster-uk-energy-security-set-to-become-law  for details.

It includes new powers which will enable the extension of the energy price cap beyond 2023, shielding millions of customers across the country from being charged “unfair” prices as they call it. Or to put it another way – to protect consumers from the real world of market prices and hence making it uneconomic for some companies to operate in this sector. This is surely not a very “conservative” approach!  There are better ways to subsidise household fuel bills.

The clear objective is to reduce reliance on imported oil and gas and encourage offshore wind farms, nuclear power generation and other infrastructure that we need to achieve carbon reductions although the growth of nuclear is still at a snail’s pace. It is certainly worth reading the document on the Bill’s contents and the associated British Energy Security Strategy mentioned in it.

But will any new Government back-track on the net zero commitment which has made for some very expensive (the public do not know how expensive) policies as regards motor transport.

Let us hope that any new Prime Minister does not get the job by promising more tax cuts. It’s clear that Government expenditure is rising by commitments in the Energy Security Bill for example and in many other areas when what is really needed is reducing the amount of our wealth that is spent by the Government. In the last couple of years we have had a quasi-socialist economy with more willingness to interfere in the economy by the Government. But civil servants consistently back the wrong horses.

What the country really needs is a period of stability under a competent leader who everyone can support.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Transport for London Quarterly Performance Report – Clearly a Financial Basket Case

Posted on by
1

Transport for London (TfL) have published their quarterly performance report. It covers the quarter to 11 December 2021 and gives some useful information on the slow recovery in passenger numbers from the pandemic lows.

In Q3 demand plateaued however and is still only 68% of pre-pandemic levels. But to really get a good picture of how TfL is a total financial basket case you only have to jump to the Appendix. That shows that the “Net Cost of Services” is £2,267 million (i.e. £2.3 billion of costs more than income) for the quarter. This deficit is only made up by £3.4 billion of “Grant income” no doubt mainly from central Government.

Indeed the Chief Financial Officer clearly thinks that he is doing a great job because he says “we are performing better than budget” while staff numbers have actually increased despite passenger numbers falling.

Somebody asked me recently how much London buses were subsidised. I did not know the immediate answer although the last time I looked at this it was an enormous figure. But this report gives you guidance on it. The Appendix reports that for the Operating Segment of “Buses, streets and other operations” there is a deficit of £754 million for the quarter and that probably includes the income from the Congestion and ULEZ charges.

It is clear that TfL are still relying on enormous Government bail-outs to stay afloat and that shows no signs of changing.

Roger Lawson

Twitter: https://twitter.com/Drivers_London

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.

Sadiq Khan Wants Your Views

Posted on by
Reply

The Mayor of London, Sadiq Khan, wants your views on the future of London. He has issued a survey which is available on the Talk London platform which asks a number of questions and also allows you to post some general comments.

The survey starts out by asking you to pick your top three choices from the following changes you would like to see in the next ten years:

Safer streets for walking and cycling; Cleaner streets; “Improved parks and green spaces; More attractive outdoor public spaces; More trees and greenery outside of parks; More workplaces; Better public transport; More housing; More attractive high streets and town centres; More physically accessible public spaces; Don’t know”.

This list does not include my top choices at all which would be: “1) Better private transport (i.e. more road space and less congestion, with fewer closed roads, bus lanes and cycle lanes); 2) Fewer people and less encouragement to move into London to reduce the stress on housing provision and transport provision; and 3) Lower taxes such as the ULEZ, Congestion Charge and Mayor’s Council Tax Precept.

I might vote for more trees and greenery but more housing we do not want in an already congested city.

In other words, it’s a typical biased survey from the Mayor that asks both the wrong questions and asks leading questions.

Some of the later survey questions are more innocuous but miss the opportunity to really find out what Londoners want. It then takes you to a section where you can add general comments on a few issues.

This is a good opportunity to give your real feelings about what how you think London should be improved (and you could of course mention the removal of Sadiq Khan as a starter). So please do respond to this survey.

You’ll need to register for the Talk London platform first but that’s easy. Go here to start: https://www.london.gov.uk/talk-london/planning-londons-future?

Roger Lawson

Twitter: https://twitter.com/Drivers_London

You can “follow” this blog by entering your email address in the box below.  You will then receive an email alerting you to new posts as they are added.