This article was originally written for my column in the Evening Standard.
Euston, we have a problem.
Just when commuting numbers have almost returned to pre-pandemic levels, regulated public transport fares increased by 5.9%. The highest rise for a decade will squeeze Londoners like a Northern Line carriage at rush hour—and threaten more delays to the capital’s economic comeback.
Things had been looking up. The latest data from the Department of Transport showed that between Tuesday 10th January and Monday 13th February 2023, TfL bus boardings were at 85% and tube entries and exits at 74% of the equivalent period in 2019.
But the return of the commute has been gradual. Many of us might be enjoying the benefits of hybrid working, while plenty of businesses in Central London still sorely miss our footfall. Shops, restaurants, and pubs will be first to groan at the public transport price hikes.
Mr Kahn had frozen TfL fares for five years running to make transport more affordable for millions of Londoners, and to stimulate the city’s economy. He’s now blaming the government for “effectively forcing” him to make the increases, which are in line with other fare increases across the UK. Meanwhile, the Department of Transport is adamant that, “TfL fare increases remain, as always, a decision for the Mayor.” Either way, this month’s hikes couldn’t have come at a worse time. My firm Nous has collated the damage, along with other free cost-of-living resources, here.
Making commuting more expensive isn’t only going to put a dent in London’s economic recovery. It’s yet another example of how the effective impact of inflation falls hardest on lower income households and those with bigger overheads.
An Office for National Statistics survey found over 60% of those earning less than £30,000 had to commute every day, with no option to work from home. Whereas, among those earning £50,000 or more, 27% worked entirely from home and only 10% had to come into work every day.
The gap isn’t only prevalent between the highest and lowest earners. It’s showing between London and the rest of the UK, too.
According to another recent study, compiled by Labour from data published by the ONS, workers in London and the South East have seen the biggest falls in real annual wages in the last 12 years. Between 2010 and 2022, average pay fell in the capital by six per cent, or £2,663, taking inflation into account.
The way this plays out seems fundamentally shortsighted. The better-off will simply choose to work from home more often, thereby starving the city (and the transport network) of their custom. While the less-well-off will feel like London is becoming unaffordable.
No wonder that many Londoners will seek pay rises in 2023. One of the most popular free tools we’ve created at nous.co is the Inflationary Pay Rise Calculator. It helps people find out what salary increase they need to keep up with rising prices and maintain their current standard of living.
London’s transport workers are well ahead. Bus drivers already agreed to an above-inflation pay rise of 18%, ending the long-running dispute that saw more than 20 days of strike action. Meanwhile, rail workers turned down a deal that would have given them a 13% pay rise, promising further strikes.
So if you haven’t yet, perhaps next time you’re waiting on the platform or at the bus stop, it might be time to crunch the numbers and start preparing for salary negotiations with your employer.
No-one should be dealing with the cost-of-living crisis all alone. We’re building a new service to liberate households from drudgery and make people’s lives simpler and fairer.