THE Department for Transport has agreed to provide financial help for Transport for London until next year, but the agreement has not been reached without a price. In the first of two essays, Sim Harris looks at the effect politicians can have on the business of running transport services.

‘I would rather have private ownership than nationalisation, if nationalisation means the conduct of public services by Government Departments’—Lord Reith, 17 June 1942

THE Mayor of London can breathe again. After a tense few days, it was announced on 1 November that the Department for Transport is to allow TfL a further £1.8 billion in a combination of grant and new borrowing. The new government support should keep TfL services running until March and follows an earlier funding settlement worth at least £1.6 billion, which had been used up. 

But in the final weeks before the settlement, all kinds of stories circulated about the kind of concessions which were poised to be extracted from TfL in return. On 20 October, for example, the Financial Times had alleged: ‘Ministers have threatened to take direct control of Transport for London unless mayor Sadiq Khan accepts a package of measures including higher council tax, a much larger congestion charge zone and higher tube and bus fares.’

Some of these predictions proved to be correct. Fares are indeed going up, by RPI + 1 per cent, and a council tax increase is on the cards,

But it is the words ‘direct control’ which should raise eyebrows. It is true that the DfT appointed two representatives to join the Transport for London board back in July, but that was a long way from direct control. If that phrase is taken literally, it would drive a coach and horses through the provisions in the Transport (London) Act 1969, which broke up the London Transport Board and gave the Underground and Central Buses to the Greater London Council. 

In those days there was no Mayor with executive powers, but even so it was a good (and early) example of devolution at work. 

London Transport had existed in various forms since 1933, when it was created as a unified authority, known as the London Passenger Transport Board. In spite of many sources which claim otherwise, the LPTB was not nationalised – it was not owned by the state but by the holders of stock, which was allocated in the main to those transport firms and organisations which had been forced to surrender their operations to the LPTB under its Act of Parliament.

The situation changed in 1948, when the LPTB was nationalised and became the London Transport Executive of the British Transport Commission (whose Railway Executive took over the Big Four railway companies and combined them as British Railways).

When the BTC was abolished in 1963, its component parts mostly became separate Boards (the name of British Transport Police is the last reminder of the Commission). The new London Transport Board might have been owned by the state, but it was controlled by its chairman, board and senior officers. Its main connection with the Ministry of Transport was when it submitted its annual report to the Minister each year, but the MoT and LT were quite separate.

And so to 1970, when the LTB was again transformed by becoming a London Transport Executive for a second time, except that it was now an Executive of the Greater London Council. (The LTB’s country buses and coaches were hived off to the recently-formed National Bus Company, apparently because LT’s former Country Area, which included places like Stevenage and Slough, was well outside the Greater London Council’s territory.)

The politicians had gained control at last.

The GLC was usually a Labour-controlled authority, and when the national government was Conservative it was a cue for the storm clouds to gather.

The storm duly broke in 1981, when Labour promised in the GLC election that it would subsidise the fares on London Transport and also British Rail routes in Greater London.

Labour won the election under a ‘moderate’ leader, Andrew McIntosh, but immediately after winning control he was replaced by Ken Livingstone, who – fairly or otherwise – gained the nickname ‘Red Ken’.

Fares on LT were accordingly cut by a third, although the Conservative government (led by Margaret Thatcher) refused to allow BR services to be subsidised.

Known as ‘Fares Fair’, the discounts were accompanied by the introduction of a system of zones which has survived, with some later amendments, to this day.

The Labour-controlled GLC had already been confronted (and defeated) by a Conservative government over British Rail fares, and it was about to have a second conflict with a Conservative London Borough.

In late 1981 the London Borough of Bromley challenged the legality of ‘Fares Fair’, on the grounds that although rates had gone up throughout London to pay for it, the ratepayers of Bromley were being forced to subsidise the fares on an Underground system which did not serve the borough.

Bromley won its case in court, with the result that fares had to be increased to levels where they paid all the costs of running the system. The resulting fares were higher than they had been before ‘Fares Fair’, and passenger figures fell.

Political differences were now having direct effects on London Transport and its passengers, and this would only be the start.

(to be concluded next Monday)

The latest print edition of Railnews, RN285, was published on 5 November. The new edition and some previous issues can be obtained by calling 01438 281200 from UK numbers or +44 1438 281200 internationally, and selecting Option 2.