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MAYOR SHOULD CREATE 'JAM-BUSTERS' TASKFORCE TO RAISE NEW TRANSPORT CASH

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04 April 2000

The London Mayor should create a powerful 'jam-busters' taskforce to funnel private cash into a new transport trust fund, according to a report from the Institute for Public Policy Research, Britain's leading centre-left think tank.

The report argues that, unless action is taken, the Mayor could become too dependent on central government grants and borrowing rules. To counter this the Mayor must initiate a strategy for raising independent finance to improve the capital's transport

IPPR recommends a new 'Transport for London Trust' to raise private finance for transport projects. As a private sector body, it would be able to raise finance and issue bonds, without the approval of central government.

The board of the trust would be appointed by the Mayor and would include representatives from business, transport experts and community leaders.

Revenues from congestion and workplace charges, hypothecated fuel duties and a new road works tax could be channelled through the trust. Money could be used for a balance of major infrastructure projects and smaller community schemes.

The trust would bring together many new sources of revenue for the Mayor including:

Congestion charging. A £5 a day charge for cars entering central London would cut traffic by 10% and raise £250million a year. If £100million of this a year was channelled through the new Trust it would support a private bond worth £1.2 billion (at 7.5% rates interest for 30 years).
Street-works tax on Utilities. Government proposals could mean £1,000 a day levy for late works on 'traffic sensitive' roads. IPPR's report suggest going further by introducing lane rental for the whole duration of street works reflecting the full economic costs of delays.
A London business levy. Government plans for local business rates should apply to the Greater London Authority. London's businesses could vote on the Mayor's proposals for extra transport investment, paid for by a levy of up to 5% on business rates. This would have raised £130million for London if applied this year.
A share of hypothecated fuel duty. The government has promised that any future above inflation increases in fuel duty should be ringfenced for transport spending. This would net London £30million per year for each 1% increase.

A Transport Agenda for London by Tony Grayling and Rob King sets out a 10-year plan to dramatically improve the London's transport. As well as financing arrangements, the report makes other important recommendations for the capital, including:

20mph speed limit in central London and residential areas across the capital
Pedestrianisation of Parliament and Trafalgar Squares
Metro style rail services for South London
70p flat bus fare and pegging tube fares to inflation
Free travel for children and a youth smartcard
Complete London and local cycle networks and an extensive network of priority bus routes

On the Tube, IPPR argues that both the Public Private Partnership and a bond financed underground would need continued public subsidy. The authors recommend that the PPP should be subject to the independent scrutiny of the National Audit Office, to ensure a fair comparison with the best public sector alternative.

The report will be launched at a high profile debate with the four main Mayoral candidates on Tuesday 4th April at the Design Council. Candidates will be asked to comment upon the IPPR's proposals as well as outlining their own policies for improving London's transport.

Tony Grayling, co-author of the report said:

'If the new Mayor is going to successfully solve London's transport problems, they must have greater control over spending, including access to new cash. IPPR proposals would give the Mayor millions more to invest in transport and help achieve a step-change in the quality of London's transport system.'

The IPPR London Transport Debate
The Design Council, 34 Bow Street, London WC2E 7DL
TUESDAY 4TH APRIL 2000: 9.00AM-11.30AM: Media invited
Frank Dobson MP, Susan Kramer,
Ken Livingstone MP, Steven Norris