The best way to "financial sustainability"? Tax the rich!

Posted in Tubeworker's blog on Fri, 29/01/2021 - 19:48,
A graphic illustration of a pile of paper notes and stacks of coins, denoting money

Against the backdrop of the pandemic, the collapse of its fare revenue, and discussions with the Department for Transport about future funding models, Transport for London has published a "Financial Sustainability Plan".

The strongest words it can muster about its own future funding is a proposal that "TfL’s funding arrangements are reviewed to ensure suitable diversity and stability of funding." The plan acknowledges that TfL's current funding model, whereby it receives no central government subsidy and relies on fare revenue for 72% of its income, is unsustainable, but holds back from making any concrete proposal by saying "it is for elected politicians to agree what the balance of funding streams are most appropriate."

It repeats the view of the TfL "Independent Review", published early in January, that an "employment levy" - i.e., a tax on businesses benefiting from TfL services - would be "a tax on London’s success" and "would raise issues with home workers" and was therefore "not recommended." Like the Review, the plan seems much more favourable towards options such as increasing council tax, or ringfenced VAT supplements, to increase transport funding. Both of these forms of taxation are regressive, leading to poorer people paying more as a proportion of their income.

There is an alternative: increased taxation on the rich and business to fund transport and other public services. The only way to make our services truly "sustainable" is to ensure they are properly publicly funded and democratically controlled, without being subject to incursion from the whims of the market in any way. That's not an alternative we'd ever expect TfL management to advocate - under a moderate Labour administration or any other - so it's down to us, through our unions, to advocate for that.

  • For an article on the "Financial Sustainability Plan"'s recommendation of pension cuts, see here.
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