London mayoral election: Freezing fares or cutting council tax? How Zac and Sadiq’s giveaways stack up
Elections are rarely free from giveaways.
Labour Mayoral hopeful Sadiq Khan’s flagship policy is to freeze Transport for London’s fares for four years.
His main contender, Conservative candidate Zac Goldsmith, has made clear he would freeze the council tax collected by the Mayor. This is one of the few big policy differences between the two leading contenders, so we decided to take a closer look.
How much will it cost?
Ever since the GLA was created fares have increased faster than inflation. Sadiq’s fares freeze would put that to an end. The total cost, in terms of lost revenue, will depend on the level of inflation. If it remains low over the next four years then Sadiq’s flagship policy will cost around £900m, with TfL collecting £5.9bn from fares instead of £6.4bn in 2020. If inflation picks up while Sadiq is mayor, TfL estimates that the cost of freezing fares will almost double to £1.9bn.
Read more: Candidates is last grasp for votes ahead of countrywide elections
What about Zac’s freeze on tax? The Mayor sets a “precept” on council tax, which goes to City Hall. Increasing the Council Tax precept by 2 per cent a year (a reasonable inflation estimate) would bring it back to its 2013 level by 2020. Zac’s freeze would hold any increases below the rate of inflation and would therefore cost the GLA around £150m over the next four years, significantly less than Sadiq’s fare freeze.
How much will people save?
If Sadiq is Mayor on May 6th, the seven day bus pass will remain at £21.20 until 2020 instead of rising to £23 under the current plan. That would save someone using it at least £225 over the next mayoral term. Londoners using a zones 1-4 travelcard will be better off by at least £500 by 2020.
On the other hand, freezing council tax will save a household living in an average band D property around £50 over the next mayoralty. Those in band H, the most valuable homes, will save £113. Put simply, the fare freeze is more expensive because it saves people more money.
Who will be the biggest winners?
Sadiq’s fare freeze will help those who are the biggest users of public transport: younger people, most lower-skilled workers, and ethnic minority Londoners. In other words, his core vote. It will help more inner Londoners, because they are more likely to use public transport, but it will save Outer Londoners a greater amount, because their tickets are more expensive.
Zac’s policy also appear to be targeted at his core voters. Freezing the mayoral precept will benefit outer London residents more: outer boroughs contribute more to council tax since they have a larger proportion of properties in higher council tax bands. Older Londoners, many of whom vote Conservative and qualify for free travel with a freedom pass, would not benefit at all from fare freeze.
Read more: Mayoral candidates haven't spent enough time on transport, poll says
In an election where candidates often seek to have cross-party appeal, this is an interesting example whereby both candidates have stuck to their core groups.
Sadiq’s giveaway is larger, but is targeted at younger voters who tend to turn out less. Zac’s giveaway is not as large but is aimed at older voters, who tend to turn out more. Which proves more enticing will be determined on May 5th.