The Transport Secretary and Mayor clashed on Wednesday over Transport for London’s multi-billion-pound bailout amid warnings that it will lead to fare rises, cuts to bus services and further damaging strikes.
Writing in the Evening Standard, Sadiq Khan accused the Government of attaching “malicious” conditions to the long-term deal that would see City Hall face another fight with unions over pensions and driverless trains.
But Grant Shapps hit back saying that the Labour Mayor “would rather cut services than take on the Tube unions — which fund his party”.
The agreement was signed off on Tuesday afternoon following weeks of intense negotiations that saw City Hall reject three separate government proposals. The final deal includes £1.2 billion of upfront funding that will guarantee passenger fare revenue until March 2024 and allow £3.6 billion for maintenance and infrastructure projects.
More than £5 billion of taxpayers’ money was used to keep services running for key workers during the pandemic. Passenger numbers are still some 20 per cent below pre-Covid levels which has put a huge strain on the network’s finances.
The latest cash injection prevents London’s bus and Tube network from falling into “managed decline”. It will fund new trains for the Piccadilly line, upgrades across the Metropolitan, District, Circle and Hammersmith and City lines and the extension of the Northern line.
But the conditions attached to the Government money include City Hall having to overhaul TfL’s staff pension schemes and introducing more driverless trains, which have infuriated unions. The deal also sees TfL having to plug a £230 million funding gap by April 2024, including £90 million over the remaining financial year.
City Hall sources told the Evening Standard that fares could have to rise in line with national rail fees to help plug some of the funding gap, while central London still faces a four per cent cut to bus services.
Walkouts by union members would only hit TfL’s weakened finances further, they added.
Mr Khan said: “There are unnecessary and damaging strings attached to this deal — none more malicious than the Government trying to force TfL to rush through significant reform to TfL’s pension scheme. It’s no secret that the conditions placed on TfL as part of previous funding deals have been a primary motivator for strikes by London’s transport workers.
“This latest deal seems designed to provoke further industrial action, which would lead to more disruption, more misery for commuters and more economic damage.”
But Mr Shapps argued that TfL’s pension scheme was “badly” in need of reform and costing tax payers £400 million a year — 10 times the amount that would be saved by sweeping cuts to bus services.
“As a panel commissioned by Khan himself concluded almost two years ago, its pension scheme badly needs reform,” he said. “Yet the Mayor has done nothing. He would rather cut services than take on the Tube unions — which fund his party, and his personal campaigns. So the deal includes asks on pension reform and driverless trains.”
The Rail, Maritime and Transport union (RMT), which has led several days of strike action in the capital this summer, said the funding arrangement attacked Tube workers’ pay and pensions.
Transport unions were holding a Save London Transport rally in the capital tonight, with US Senator Bernie Sanders due to join the protesters.
RMT general secretary Mick Lynch said: “This deal negotiated in secret by TfL and government ministers will likely see our members’ pensions attacked and further pay restraint in the future, coupled with driverless trains.
“Mr Shapps’ attack on Tube workers would be unacceptable at any time but in an escalating, cost-of-living crisis it is shameful and will be resisted through further strike action.
“The rally tonight will send a message that RMT and other transport unions will not tolerate attacks on workers’ pay and conditions or cuts to public services.”
TfL Commissioner Andy Byford told the Standard that any industrial action by unions would be “premature” as no changes to pensions had been tabled.
But he admitted that “efficiencies and new revenue streams” would be needed to keep TfL on budget over the next few years.
He added: “The support offered by government left an unfunded gap in our budget, which we have been working hard to identify how we will fill.
“This work has made good progress and we are confident that we will achieve an outcome that allows us to balance our budget and maintain our minimum cash balance. We will need to progress with our plans to further modernise our organisation and make ourselves even more efficient, and we will still face a series of tough choices in the future, but London will move away from the managed decline of the transport network.”
It comes as staff at nine train companies announced a fresh wave of nationwide strikes in September. Rail union TSSA said the walkout would coincide with Labour’s annual conference on September 26 and 27 in Liverpool.
The companies involved include Avanti West Coast, c2c, CrossCountry, East Midlands Railway, Great Western Railway, LNER and Southeastern as well as some Network Rail workers and controllers. Staff have called for industrial action in an ongoing dispute over pay, job security and conditions after rejecting a two per cent pay offer earlier this summer.
A DfT spokesman said unions were choosing self-defeating strike action over constructive talks.