If you live in London, you might have had an unusual missive on your doormat this week.
On the outside, the communication states in block capitals: “London mayoral council tax rise. Do not ignore”.
Inside is a letter, complete with a logo that contains the words “City Hall”, headed: “If you do not take action, your mayoral council tax will rise by 21.2%”.
But the letter isn’t from City Hall. The small print reveals that it was sent on behalf of the Conservative candidate vying to be the next mayor of London, Shaun Bailey.
Let’s take a look at the central claim.
“[Transport for London] is on its second bailout. And in the second bailout’s settlement letter, Sadiq Khan revealed that he’s planning to pass the cost on to Londoners with a rise in council tax”
Mr Bailey is referring to the government’s injection of up to £1.7bn into Transport for London (TfL), announced in the autumn. A government press release from 1 November says this is “to make up fare revenue lost due to coronavirus pandemic” in line with what it has provided for national rail operators.
The settlement letter Mr Bailey’s talking about was actually sent by the Transport Secretary Grant Shapps to Mr Khan on 31 October.
In it, Mr Shapps says “If the Mayor and TfL wish Londoners to continue to benefit from travel concessions” above the level enjoyed by the rest of England after March 2021, then “TfL/the Mayor recognises that the costs of these additional benefits will not be met by HMG funding”.
Translation: the money will run out in the spring, at which point it’ll fall to the London authorities, not central government, to make up the difference.
Mr Shapps then says that “TfL and the Mayor have proposed that this could potentially include” increasing the part of Londoners’ council tax known as the Greater London Authority “precept”. That’s what Mr Bailey is concerned about in his leaflet.
From Mr Shapps’ letter, you’d think that the possibility of raising the mayoral precept was Mr Khan’s idea.
But the Financial Times reported on 20 October that it was the government that insisted on this being an option in a letter from Grant Shapps to Sadiq Khan on 1 October, when TfL funding talks were still underway. According to the FT, Mr Shapps was clear that “he expected Londoners to pay more through a supplement to their council tax to help improve TfL’s finances”.
The same report suggests Mr Khan pushed back on the proposal in a letter to the Transport Secretary on 6 October, arguing such a move would, in the FT’s characterisation, “place even more reliance on an already broken form of taxation and would be regressive”.
In the draft budget for 2021-22, Mr Khan says: “I must sound a warning for Londoners that Ministers are pushing for an extraordinary and regressive increase in council tax in London and across the UK” and that “the Department for Transport wants London to increase Council Tax to help fund TfL from next year”.
And there’s another problem with Mr Bailey’s claim: it suggests that the rise in the mayoral precept is already in train. But as the Transport Secretary’s letter spells out, it’s one of a number of options – and if put forward by the mayor in January 2021, would need support from government and parliamentary approval in order to take effect.
Finally, the website endorsed by Mr Bailey’s leaflet – “stopkhanstaxhike.com” – incorrectly states that the policy would “raise your council tax by 21 per cent”. In fact, it is the mayoral precept that might rise by this amount, not the entire council tax bill. So while both the website and leaflet were prepared by the Conservative party, the leaflet was – in this sense – more carefully worded.
A spokesperson for Mr Bailey’s campaign told FactCheck: “Londoners have a right to know the full facts. And the fact is Sadiq Khan’s planning to hike his share of council tax.
“Since 2016, the Mayor racked up £9.56 billion in wasteful spending at TfL. That’s why TfL needed two bailouts in the space of a few months.
“According to the Transport for London Settlement Letter, Sadiq Khan himself proposed raising his share of council tax to pay for the cost of his mismanagement.
“If the Mayor of London is annoyed about being exposed, he can only imagine how annoyed Londoners will be when they’re forced to cover the costs of his mismanagement.”
The Conservative candidate for London mayor, Shaun Bailey, claimed this week “[Transport for London] is on its second bailout. And in the second bailout’s settlement letter, Sadiq Khan revealed that he’s planning to pass the cost on to Londoners with a rise in council tax”.
The claim omits two key pieces of information. First, the proposal is just one of a number of options TfL might pursue once recent Covid-related government funding runs out (and if it were put forward, it would need support from central government and House of Commons approval).
More importantly, despite Mr Bailey’s claim that this is “Khan’s tax hike”, letters seen by the Financial Times suggest that it was the Conservative government in Westminster that insisted the mayor consider increasing this part of Londoners’ tax bill. The same report appears to show Mr Khan pushing back on the proposal.