Livingstone did cover up fare rises, say advisers

Andrew Gilligan
25 Apr 2008

Ken Livingstone's top advisers agreed that the Mayor misled Londoners when he denied planning big post-election bus and Tube fare increases - and are still working on the basis that fares will go up.

The Evening Standard revealed yesterday how on 24 October last year Mr Livingstone secretly approved a TfL business plan for above-inflation fare increases in both 2009 and 2010.

Six days later, on 30 October, he claimed the exact opposite in public - saying that fares would be frozen in real terms. The statement, which he repeated at least three times over successive-weeks, caused horror inside TfL, with the Transport Commissioner, Peter Hendy, accusing Mr Livingstone of telling "stories".

After the Mayor's statements about fares, TfL secretly rewrote its business plan to delete all mention of fare increases from the published version. It now claims fares will not have to rise.

Mr Livingstone yesterday claimed he and his advisers simply changed their minds and decided to freeze fares in real terms. He told BBC London: "[TfL] submit a business plan and once I've read it I then determine what our fares strategy will be ... I analyse it with my officials who are not TfL people, bear down, and say do you [TfL] really need all this money?"

However, today the Standard can reveal that further emails expose these statements as false - and the analysis of Mr Livingstone's own officials was that fares probably did have to rise above inflation. In an email leaked to us, the Mayor's second most important adviser, his economic and business policy director John Ross, says it will only be possible to hold fares down if revenue exceeds expectations.

The email, dated 14 November, is to Mr Hendy and is copied to the Mayor's chief of staff, Simon Fletcher.

Mr Ross says "the Mayor must by law set a balanced budget for Transport for London". If fare revenue was higher than TfL expected, he says, "it will be possible to balance the budget by keeping the fare increases down to RPI [the retail price index used to measure inflation]".

However, "if fares did not exceed projections, TfL has drawn up a variant that would allow the budget to be balanced at broadly RPI plus 1".

Later emails between Mr Hendy and TfL's finance director, Steve Allen, confirm Mr Ross's view. Even as the Mayor was claiming in public that he would insist on inflation-only rises, Mr Hendy was reporting the exact opposite: "John Ross told me that he 'wouldn't insist' on RPI next year, so that's useful (!)"

Two hours later on the same day, 19 November, he writes again: "John's line to me was that if revenue was better than forecast RPI would do, and if it wasn't then RPI+1 would need to be put in."

In another email, Mr Allen said: "John Ross ... understood and accepted the potential issue" about the difference between the Mayor's public statements and what he had agreed in private."

One senior serving TfL official said: "The reason the TfL business plan was amended was not because the Mayor wanted to change the policy [for fares increases] but because they wanted to cover up the policy.

"The Mayor's office made very clear to Peter Hendy that if he went along with a cosmetic change to the business plan, then fares could still rise above inflation after the election. Our commitments, such as Crossrail, Metronet and the Tube investment programme, mean we have no alternative but to raise fares above inflation, and Ken knew that perfectly well."

Mr Livingstone was today accused by his Conservative opponent, Boris Johnson, of being misleading over the fares saga: "It an utter scandal that the Mayor can secretly agree with officials that fares will have to go up after the election, then go to the electorate and tell them they won't."

Mr Livingstone's campaign was unavailable for comment.

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