Got some figures now.
At the time of the scheme’s announcement, Livingstone faced questions from LA members, including Richard Barnes (now one of the Deputy Mayor Brigade), who I have to say comes across as rather a tit.
To cover all the people that you are talking, I suspect we would be talking about pretty much substantially writing off our entire fuel costs, and they are about £100 million a year
OK, say it was £100m last year. According to the US DOE, diesel prices in the UK, in dollar terms, have gone up about 18% comparing the average for this year against last year (talking Venezuela-scheme years here). Even allowing for the dollar having fallen, it’s obvious that there’s a substantial difference in the diesel price between when the first payment was made to TfL as against now.
So, taking a 10-20% rise in diesel prices that gives us between £110-120m total cost for this year’s fuel costs for London Buses. Since Venezuela pays us 20% of this that’s £22-24m, but this is way over the cap of $32m, which is currently £16.1m. It’s therefore nailed-on certain that the Venezuelan contribution to TfL this year will be just over £16m. The TfL estimate for the scheme’s cost in the first year was £15m, and presumably no one will be marketing it from now on, so it might even come in less than that, particularly if the takeup figure of 65% of those eligible was over-optimistic (which it well might have been).
Ironically, given that that the Tories correctly identified exchange rate and oil prices as a risk, both of them have moved in London’s favour over the year - the dollar was well over two to the pound in the initial phases of the scheme but is now below that mark while the price of diesel has soared. That makes it inevitable that the cap is hit but actually increases its value in pounds.
What this also means is that fuel prices are going to force a fare increase for everyone soon. Who’s up for driving a convoy of bendy buses to City Hall to protest?
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It always amazes me how the Tories accuse ‘The Left’ of politicking and bad economics when they’re capable of things like this.
Didn’t Thatcher buy more expensive Polish coal rather than British?
In Sheffield their used to be very low bus fares - anywhere for 10p. Of course Thatcher hated this and banned Council subsidies.
Roads full of cars, roads in bad repair, soaring bus fares - a Tory Utopia. And the council has to spend more of maintaining the roads than it did subsidising the buses.
London, it’s your turn now.
Anything Thatcher is now ancient history.
As far as this ‘left’ ZaNuLabour they have ruined our economy.
You will pay for it.
Ancient History is always of interest, as Boris’s fascination with the Classics helpfully shows. To pursue the history lesson, then:
Whether or not Thatcher bought more expensive coal from Poland, it was generally accepted that she had stockpiled enough coal in advance to see out the Miners’ Strike, allegedly from (then apartheid) South Africa.
It so happens that Sheffield’s low bus fares were matched by similar in London. I seem to recall - but my memory of the details may be fading - that the ‘Fares Fair’ policy implemented in 1981 by the GLC (led by a certain Ken Livingstone) had a 10p or 20p fare anywhere on bus and Tube to encourage people to leave the car at home and use public transport instead. It was supported by a supplementary rate added to the general London rates (the forerunner of the present Council Tax). However this was contested by the Tories, led by Bromley Council. They, and some other Conservative boroughs, felt that as the Tube doesn’t reach the outer suburbs south of the river, they should not subsidise public transport in Inner London and north of the Thames. The ‘Bromley alliance’ used ratepayers’ money to pursue a case that was initially turned down; it was upheld only after appeal, eventually to the House of Lords which ruled it unlawful.
The question is, though, was Fares Fair a constructive policy in practice? On the basis that, according to some independent sources, car-use dropped by 10%; tube usage went up 44%; bus usage went up by 14%; and an extra £48m fare revenue came in, it would appear to have been a broad success. What is concerning here, surely, is that a political party (in this case, the Tories) felt able to pursue their own version of political correctness regardless of cost.
Significantly, this took place during the first Thatcher administration, a government that was singularly aggressive in its pursuance of a free-market privatisation/liberalisation ideal. As Karl Polanyi points out in The Great Transformation, the free-market or laissez-faire version of Capitalism is a Utopian ideal and ill-suited to the complexities of contemporary political and economic life; certainly ill-suited in its ‘pure’ form to the running of a complex, vibrant ever-evolving world-class city such as London. What is depressing is that this overturning of Fares Fair marked the triumph not only of an extreme Utopianism, but also of local-borough parochialism which, by definition, has no place in a global city. Not that it would be repeated by our own Dear Boris and his Bromley and Westminster chums, of course…