Gareth Bacon is the Leader of the Conservative Group on the London Assembly.
I’ve written in the past about how Sadiq Khan’s every action should be considered through the lens of his desire to be Labour Leader, and thus his obsession with pursuing short term flashy policy gimmicks that tend to get him nice newspaper headlines but that have long-term – and largely adverse – implications.
Last month we saw the delay (or probably cancellation) of the purchase of new Tube trains that would have enabled the Jubilee Line to run 36 trains per hour and the Northern Line to run 30 trains per hour. Last week we discovered that TfL’s Graduate Recruitment programme had been “frozen for a year” – as with the upgrade programme, it is doubtful this programme will be restarted.
The common denominator is the promise Khan made during the election that Londoners would “not pay a penny more on fares in 2020” should he be elected. Conservatives – and, indeed, all the other Parties – told him at the time that this promise was unaffordable, but he repeated it incessantly. He was very quick to break that promise – as any Londoner with a Travelcard knows – when he retreated to merely pledging to freeze TfL fares. Nevertheless, the partial fares freeze will cost £640 million over the four years of his Mayoralty. Other polices such as the One Hour Bus Ticket are costing far more than the Mayor anticipated and his reaction to strike action on the Tube has been to simply give in to trade union demands at a further significant cost.
This means that TfL is scrambling around to make savings and raise money and there are other victims of the Mayor’s foolhardiness. It seems that one such victim is going to be the Private Hire industry, which is now faced with the prospect of radically increased operator fees.
The increases are astronomical.
The lowest increase, for firms with between one and ten cars, is 34 per cent (from £1,488 to £2,000) and 704 firms will be hit. At the highest end, for firms with in excess of 10,000 cars, the increase will be 102,500 per cent. For firms with between 21 and 500 cars (a total of 979 businesses, making up just under 50 per cent of London’s private hire provision) the increases range from 572 per cent to 5,562 per cent.
It’s clear that something has gone very, very wrong with the proposal.
The consequences, if these plans go ahead, will be dire. The Private Hire market would look like an hour glass – big hitters like Uber and Addison Lee would survive alongside small operators with fewer than ten drivers, but vast swathes of the medium-sized operators would have no choice but to fold. This is not just supposition.
When these proposals were presented to the TfL Board’s Finance Committee for consideration, the document written by TfL officials stated:
“The proposals represent a substantial change to the current fee structure for operators and it is accepted that the size of the proposed increase in fees will have a significant adverse impact on some operators……the proposals could mean a number of small or medium sized specialist operators leaving the market or being deterred from joining the market which would reduce choice and could increase fares for consumers.”
It beggars belief that Sadiq Khan could see the figures and read that sentence and, instead of telling TfL to think again, simply rubber stamp the proposal.
When I first found out about these proposals, my working assumption was that the proposal must have slipped through the net. My hope was that when I raised the issue with the Mayor at Mayor’s Question Time in October he would recognise that and, rather than try to defend the indefensible, he would instruct TfL to look again at these plans and address the disproportionate impact on smaller firms.
However, it seems I was giving Sadiq Khan too much credit. He refused to think again, despite pleas and threats of legal action from across the Private Hire industry, including the Chairman of the Licensed Private Hire Car Association and the GMB trade union, and insisted that the charge increases were justified.
The Mayor’s only real excuse was to lament that the cost of compliance had increased. However, he appeared to have no understanding that the person who caused the increase in the cost of compliance was Sadiq Khan himself – since he was elected in May 2016, TfL (which is chaired by Sadiq Khan) has employed an additional 250 compliance officers which he now claims are desperately needed. However, the figures show that the industry’s compliance has never been better. As an example, a major argument made by those pushing for employing a record number of compliance officers has been that there are issues with cars being incorrectly insured; the reality is that there were just four issues over the last quarter.
The fact is that under Khan, TfL has massively increased the amount it spends on regulating the Private Hire industry and is now insisting that the industry pay for that decision. Much like Donald Trump’s wall, someone else – the victim – must pay.
At Mayor’s Question Time Sadiq Khan stated that he wanted “a vibrant, flourishing, private hire and taxi business in London.” Unfortunately for Londoners, the self-styled “most pro-business Mayor ever” doesn’t appear to understand how business works. As is so often the case with left-leaning politicians who go out of their way to make “pro-business” noises when running for office, once in office they fall back into their comfort zone of seeking to control everything and increasing regulation to such a degree that they end up stifling economic competitiveness and harming or destroying the very thing they claim to wish to protect.
The fact of the matter is that if this policy goes ahead, it will force hundreds of operators out of business and cost thousands of jobs, whilst the remaining operators will face less competition. Consumers will suffer grievously as service provision falls and prices will rise to cover the cost of these additional operator fees. Londoners will pay the price for the Mayor’s bad policy making.
Khan gained a lot of cheap headlines with dodgy short-term promises during the Mayoral election. London is now starting to count the cost.