Boris Johnson has been urged to cut bus fares in the capital following a fall in the price of crude oil.
Despite oil prices falling around $60 per barrel, London’s bus passengers saw their fares increase this month to £1.50 per trip, up 5p on 2014’s prices.
Danny Alexander, Chief Secretary to the Treasury, has written to the Mayor seeking assurances that he’ll pass the saving, which reduces operating costs for bus companies, on to passengers “as quickly as possible.”
In his letter, Mr Alexander says: “The government is already providing generous support to transport in London, with an annual grant of over £1.5bn to Transport for London. However it is important given your role in setting fares that you play a part too in ensuring fares for passengers are as low as possible.”
The Liberal Democrat MP wants an assurance that City Hall will “take action to ensure the fall in fuel prices is passed on to bus passengers through reduced fares, and will do so as quickly as possible.”
In a statement he added: “With fuel prices dropping across the country it’s right that the full benefits are passed on. Falling oil prices are like a giant tax cut to the economy. But the positive effect will only be felt if the oil price falls are passed on.
“While drivers are already seeing the cost of filling up the car come down, the millions of Britons who use the bus are still paying what they did a few months ago.”
TCOSLondon says
That’s rich coming from Danny Alexander who announced the Treasury’s gift of £30m towards the Garden Bridge. Perhaps we can have that money back and spend it on the multitude of issues that TfL needs to urgently address?
PC says
Clearly Mr Alexander hasn’t bothered to ask TfL or the bus companies how fuel for buses is purchased. Is he unaware that fuel costs are hedged up to 2 years in advance so at present the operators are probably incurring a financial hit relative to the current pump price? Any gain from lower prices will feed through into future contract prices not current ones.
I suggest he either listens to last week’s Assembly Budget Committee where Peter Hendy explained this point very clearly or he flicks through some of the annual reports for the big bus companies over recent years where he’d see the impact on the bottom line of getting hedged fuel prices “wrong”. If he can’t be bothered to do some elementary research or pick up the phone to someone with some insight how are we supposed to put any faith in what Mr Alexander says?
A final suggestion would be for Mr Alexander to go and persuade his boss, a certain Mr Osborne, to stop cutting TfL’s revenue grant year after year – then perhaps we could have a fares cut or a freeze and still improve services for people. I hate this sort of ignorant simplistic “cheap shot” politics from our elected representatives. Anyone would think there was a general election looming!