Government orders Sadiq Khan to hike Tube and rail fares as part of £485m London settlement

Tube fares will have to rise by at least 4.6 per cent next year, the Government has told Sadiq Khan.

Transport Secretary Louise Haigh has made a fares hike a condition of the £485m deal announced for Transport for London in Wednesday’s Budget.

She told the mayor that he was expected to ensure that “TfL rail fares rise in line with national rail fares this year”.

Despite mentioning only “TfL rail fares”, this is almost certain to apply across the Tube, London Overground and Elizabeth line services, due to all being part of the capital’s zone-based fares system.

It was only after the Budget documents were published on Wednesday afternoon that it emerged the Government had decided to increase commuter rail fares on the national railways by 4.6 per cent from next March – more than double the current rate of inflation.

Now a second fares bombshell can be revealed, after being mentioned only in correspondence from Ms Haigh to Mr Khan.

The mayor had already warned that his current partial fares freeze was unlikely to continue beyond next March.

But an above-inflation hike – at a time of ongoing cost of living pressures on Londoners – will not be welcomed by passengers, who are currently awaiting news of whether they face up to 10 days of strike chaos on the London Underground.

Another concern for Mr Khan is that TfL’s finances have fallen behind target due to fears that the “return to the office” has started to flatline.

Changes to rail fares will come into force on March 2, 2025 – making it likely that Tube fares, and those for other TfL services such as the Elizabeth line and London Overground, will also increase on the same day.

Mirror man: Louise Haigh wants Sadiq Khan to copy the rail fares hike (Ross Lydall)
Mirror man: Louise Haigh wants Sadiq Khan to copy the rail fares hike (Ross Lydall)

Ms Haigh, in a letter to Mr Khan setting out the terms for the £485m, Ms Haigh wrote: “HMG [His Majesty’s Government] expects you to consider the full range of revenue raising powers at your disposal as part of TfL’s business planning and to confirm to HMG your plans to ensure TfL continues to improve its financial sustainability in the medium term.

“You should note that HMG’s assessment of TfL funding needs in Phase 2 of the Spending Review will be conducted against a baseline scenario where TfL rail fares rise in line with national rail fares this year.”

Earlier this year, Mr Khan – in what critics described as a pre-election giveaway - decided against increasing the cost of pay-as-you-go TfL fares, contrary to expectations that they would rise in line with national rail fares.

London bus fares could also rise in addition to Tube fares - though Mr Khan sees it as a priority to keep these as low as possible, as the bus network is relied upon by lower-income Londoners.

The London bus fare is currently £1.75 - the cheapest in the country.