Euston, we have a problem.
Just as commuter numbers are beginning to return to pre-pandemic levels, regulated public transport fares are rising. This month, fares across the Tube, buses and rail climbed by 5.9 per cent. The highest rise for a decade will squeeze Londoners like a Northern Line carriage at rush hour - and I believe they 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 January 10 and February 13 of this year, TfL bus boardings were at 85 per cent, and Tube entries and exits at 74 per cent of the equivalent period in 2019.
The return of the commute has been gradual. Many of us might be enjoying the benefits of hybrid working; plenty of businesses in central London still sorely miss our footfall. Shops, restaurants, and pubs will groan at the public transport price hikes just as consumers will.
Sadiq Khan 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 blamed the Government for “effectively forcing” him to make the increases, which are in line with other fare increases across the UK. Of course, the Department of Transport said the fare increases in London were “his decision”.
Either way, this month’s hikes couldn’t have come at a worse time. Not only are price rises going to impact commuting numbers, but the effective impact of inflation always falls hardest on lower income households.
An Office for National Statistics survey found more than 60 per cent of those earning less than £30,000 had to commute every day, with no option to work from home. Among those earning £50,000 or more, 27 per cent worked entirely from home and only 10 per cent 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, when 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. One of the most popular free tools we’ve created at my financial firm, Nous, 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 per cent, 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 per cent 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 work out how best not to be left behind.
