Commentary: Rise will fix Ken's TfL black hole

We are extending the Freedom Pass to make it a 24-hour service, so that over-sixties will travel free round the clock on the buses, Tube, trams and Docklands Light Railway. We are actually cutting some Oyster fares to bring them in line with national rail, so that off-peak travellers to and from the outer boroughs will benefit.

We are delivering a new and sustainable half-price deal for those on income support so that the poorest can travel cheaply on the buses and trams. We are making £1.6 billion savings in Transport for London's budget to reduce our demands on the fare box.

And in so far as we now have to put up fares, the increase - at inflation as measured by the Retail Prices Index (RPI) plus one per cent - is much less than in the rest of the UK and many national rail fares. But as I look at the finances of TfL, I know that it is the only responsible course.

We face soaring fuel bills. We must finance investments in infrastructure projects vital for London's long-term future. Above all, we must repair the damage left by the last Mayor, who flagrantly and cynically manipulated fares for electoral purposes - and it is time to expose the truth.

With his characteristic braggadocio, Ken Livingstone has left a £2.25 billion black hole in TfL's finances - and all because he didn't have the guts to be straight with the voters.

Our story begins in early June last year when TfL was called to the Treasury to discuss the funding of Crossrail. Ever since Gordon Brown became Prime Minister, he identified Crossrail as an important way in which he could signal his commitment to London and dispel the impression that he was a skinflint Scot with no interest in Southern England.

Livingstone was also determined to ensure the scheme went ahead - as an important plank of his re-election platform - and so he readily agreed a huge chunk of Crossrail funding should come from TfL. How would TfL finance the borrowing? It was obvious from that very first meeting that fares on London transport would have to go up by RPI plus one per cent. That is the usual rate of fare increases in London, and at a TfL board meeting in October, chaired by the last Mayor, it was agreed that RPI plus one was the way to go.

TfL officials went ahead and produced a business plan for Crossrail and other projects, based on RPI plus one. Imagine their consternation, therefore, when the election started to draw nearer, and the Mayor departed radically from the script. They could hardly believe their ears.

Was this the same Mayor who had chaired the very meeting that had agreed RPI plus one? Here he was, assuring the Greater London Assembly that he would enact a fares increase of only RPI.

Protracted over 10 years from 2007 to 2017, that was a financial nightmare for TfL. It meant a cut in funding of £2.25 billion, and placed a question mark over the financing of Crossrail. "We were struggling with a business plan saying one thing, and the Mayor was saying another," one senior TfL official said.

In other words, Livingstone was up to the oldest trick in his book: recklessly promising to hold down fares in the run-up to an election, when he knew full well that it was not a promise he could conceivably keep. He had done it before, of course - promising to cut fares before the 2004 elections, and then ruthlessly whacking them up when the electorate had fallen for his bait.

TfL officials sent emails to the Mayor, pointing out the discrepancy and expressing the hope that he might remember the meeting he had himself chaired. Their interventions were in vain.

Livingstone's political team was already in a state of panic about the polls. In September they had even insisted on a cut in bus fares, placing yet more strain on TfL's finances. That was why he insisted on RPI - or at least he would insist on it in the run-up to the election - and that is the Livingstone legacy I now inherit.

I believe today's package is sensible. I will be looking for more savings from TfL to prevent unnecessary rises in the future. But I will not attempt to abuse the system and pull the wool over the eyes of Londoners in the hope of short-term electoral gain.