Friday, April 13, 2012

Race to be London Mayor: We Can't Afford Ken

By Theodora Clarke, Director of Communications for the Conservative Women's Organisation

There are less than three weeks until the election for Mayor of London on May 3rd. Each of the candidates has presented their plan to Londoners on what they would do in office. However, Labour's candidate has repeatedly made promises which he will not be able to keep. Ken Livingstone has made at least £2.7billion worth of unfunded promises while campaigning.

A new report out this week by BackBoris2012 details each of the 24 promises Mr Livingstone has made to Londoners ‘on the record’ since becoming Labour’s official candidate for Mayor. The money, over and above the current fully funded plan, would have to come from GLA or TfL budgets.

But Mr Livingstone is refusing to say how he will pay for these promises. In fact, he has told Londoners he will not reveal his financial plans ‘until the day after the election’.

But he has been forced to admit on the campaign trail that he is ‘going to increase your taxes’.

So, to deliver on his 24 promises, Mr Livingstone would have to: 
1. Increase his share of council tax by £348 for a band D property over four years, and 
2. Increase congestion charge by 42.1% or introduce a Heathrow Congestion Charge Zone.

Ken Livingstone says one thing but does another, making promises to Londoners which he knows he can’t keep. The report raises serious questions over where the money for these promises is coming from at a time when public finances are the tightest they have been for a decade.

There is only one way he can keep his promises – by continuing his record of hiking up council tax and increasing or expanding the congestion charge zone at a time when Londoners are struggling to make ends meet.

Mr Livingstone needs to be honest with Londoners and admit he will have to hike up taxes to fund his promises, or admit that he has no intention of delivering on his promises.

Below is a brief summary of the key points of the report Can't Afford Ken:

  • Ken Livingstone has made 24 promises that cost more money than is in the budget. He has made all of these on the record. It includes things like his fare cut, EMA replacement, ‘Ken-ron’ and a London wide lettings agency.
  • The estimated total cost of these pledges over four years is £2.7bn. This breaks down as £1.1bn on the GLA ‘Core’ budget, £482.5m on the TfL budget and £1.14bn for his fare cut.
  • The BackBoris report has been deliberately cautious in our judgement.  Each pledge has been examined and an estimate of how much it would cost based on either a) existing public sources, b) Labour’s own costings and c) independent costings, such as Channel Four fact check.
  • To fund his extra spending Ken would need to find more money from the council tax precept, and more revenue from TfL.
  • On the precept: He would have to increase the GLA precept by £348 at Band D over four years - £87.08 every year:
    • His extra spending falls into two parts of the GLA budget: ‘core’ and ‘TfL’.
    • The council tax precept does not fund TfL (except for a nominal £6m for VAT purposes) so in order to work out how much council tax would go up, you look at extra spending on the GLA ‘core’ budget.
    • Livingstone’s extra spending on the ‘core’ budget is £1.1bn. 
    • The GLA currently raises £935.1m through the council tax precept, which costs £307 per Band D household.
    • Livingstone claims he won’t cut existing budgets, he is unlikely to get extra Government money and he claims he won’t increase borrowing. So the GLA could only find this extra money by increasing the amount it raises via the precept.
    • So to get a figure of an extra £348 per Band D household, you divide extra spending of £1.1bn by 3,053,288 Band D equivalent households.
  • On TfL revenue: He would have to raise the Congestion Charge to £15 or create new congestion charging zones, such as a £5 Heathrow congestion charge.
    • He has already claimed he would cut fares, taking £1bn out of the budget.But he has also made election promises costing at least £482.5m in revenue over four years.
    • £482.5m over four years is £120.6m a year. To raise £120.6m from the congestion charge, it would need to go up by 42.1%, which brings it to £14.21 or £15.
    • Or a Heathrow congestion charge zone (which he backed before and the Greens also back) which would need to be £5 a day to raise £120.6m in revenue.

You can download the full document here:

So remember to get out and vote for Boris Johnson on May 3rd to be re-elected as your Mayor of London.  

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