Government's Transport Investment Strategy

Meeting: 
MQT on 2017-08-10
Session date: 
August 10, 2017
Reference: 
2017/3224
Question By: 
Tom Copley
Organisation: 
Labour Group
Asked Of: 
The Mayor
Category: 

Question

Transport secretary Chris Grayling has announced a Transport Investment Strategy that proposes the creation of a major road network, with councils given a share of Vehicle Excise Duty. Will London receive a share of this funding?

Answer

Answer for Government's Transport Investment Strategy

Answer for Government's Transport Investment Strategy

Answered By: 
The Mayor

Sadiq Khan (Mayor of London):  Not at the moment, no.  I welcome the proposal to create an English major road network, which will mean that local authorities are given a share of vehicle exercise duty.  However, the way it is structured at the moment does not work for London and the Transport Commissioner has been making a case for change with officials.  Londoners pay about £500 million a year to central Government through vehicle excise duty; yet a significant proportion of this is spent almost exclusively outside of London.  At the same time, there is a net operating deficit for London’s roads of around £500 million a year.  This means public transport users will increasingly be subsidising the costs of operating the TfL road network.  This is clearly an illogical and unfair position.  Following the removal of TfL’s operational grant from central Government in 2018/19, this is also completely unsustainable.

 

The position is unique to London.  As an example, the stretch of the A2 from Dover to the GLA boundary is maintained by Highways England and is supported by funding from central Government.  However, as soon as it crosses the GLA boundary and responsibility passes to TfL, Government funding stops.

 

Londoners rightly expect the taxes they pay to maintain their services.  A fair share of the vehicle excise duty they pay should be used to fund London’s major roads.  This would remove the need for public transport farepayers to cross-subsidise roads and allow TfL to continue investing to deliver the policies in my draft Transport Strategy.  My Transport Commissioner Mike Brown and his team have met officials at the Department for Transport (DfT) and Treasury on a number of occasions to discuss this issue and I will continue to make the case to Ministers.  I would welcome your and the Assembly’s continued support to tackle this discrepancy.

 

Tom Copley AM:  Thank you very much for the answer, Mr Mayor.  We often hear from other parts of the country that London receives too great a share of transport funding and that perhaps we should not get some of these big transport projects, but actually there is a great unfairness there in that almost all of that £500 million that is paid by London drivers is spent outside of London, despite the fact that the 90% of Londoners’ car journeys take place exclusively on London’s roads.  I am pleased that you are making representations to the Government about this.  In fact, Mike Brown highlighted this very issue and the example that you gave at the Transport Committee.

 

The London Finance Commission (LFC) recommends the hypothecation of a share of London’s contribution to vehicle excise duty for improvements of nationally strategic roads within London.  Do you agree with this recommendation?  I take it from your answer that you do.  What are you doing to convince the Government of the arguments?

 

Sadiq Khan (Mayor of London):  I do agree with the LFC’s recommendation.  I have met the Chancellor myself and raised this issue.  The impression I get - and one must not give a running commentary about conversations and negotiations with the Government but in general terms - is that they recognise we have a strong case, particularly with the operating grant being reduced to zero in 2018/19, for us to get a bigger slice of that pie.

 

They also recognise that it is in nobody’s interest for roads in London to be badly maintained.  It is nobody’s interest for there to be problems in relation to roads in London, particularly major roads.  Treasury has started to move and I am looking forward to the Transport Commissioner’s team having fruitful discussions with Treasury because it is not sustainable.