Summary
Starmer’s rejection of Khan’s pleas for more funding demolished the Mayor’s eight-year political strategy of blaming the Conservative government for every failure. With a £21 billion annual budget, vast land holdings through GLAP, and a Business Rates deal that rewards economic growth, Khan has the tools to deliver — but years of populist fares freezes have hollowed out TfL’s investment capacity. London is left with a lame duck Mayor bereft of strategy.
Last week, Sir Keir Starmer carefully straightened his tie, strode into the Downing Street garden, and effectively ended Sadiq Khan’s political career – by rejecting the Mayor’s pleas for more funding.
For eight years, London’s Mayor Khan has been a major figure in the Labor Party. Their most senior elected politician, regularly called upon to pontificate on national and international issues, an anti-government rent-a-quote attack dog, and a star turn at their annual conference.
Now, all that is over.
Mayor Khan built an eight-year career in City Hall on the back of this mixture of pontification while blaming every failure on the lack of money from the Government. Nothing is ever his fault. But the Labour Prime Minister has quietly demolished that strategy by explaining that there is no more money – not for London, not for anyone. Mayor Khan must put away his begging bowl and get on with his job – using the £21 billion annual budget he already has. Khan didn’t heed this repeated message from Conservative Governments, will he now?
The Mayor’s melodramatic reaction to this was to flounce off on a last-minute trip to New York. Why he needs to fly business class to New York to lecture us on climate change is never explained, but when he gets back the explaining needs to start: how he will tackle the housing, transportation, and policing problems piling up in his mayoral in tray with the money he has already, without scapegoating the Government?
Mere weeks ago, the Mayor was gifting the capital with fantastic tales of an idyllic land of plenty ushered in by a Labour Government working with a Labour Mayor. Truly a Shangri-Labour, but few have woken up to the reality faster than Mayor Khan.
The early signs of trouble in paradise came just two weeks after the General Election at Mayoral Question Time. I led off by asking the Mayor which of his long shopping list of demands the new Government had agreed to. I expected bombardment and triumphalism. I did not expect the Labour Government to knock back every one of his requests, tell him to get back in his box and to stop asking. But it seems that’s exactly what they told him.
The Prime Minister told all of us what he’d privately told the Mayor weeks ago: there will be no more money. No more money for the Mayor’s housing plans, no more money for the Met Police, and no more money for London councils. In time, I’m sure some modest sums will be found, presented to great trumpeting and choruses of angels, but Sir Keir’s signature “No” has instantly reset the conversation: Mayor Khan has already got what he’s getting and must now get on with the job.
So where will this leave our globetrotting eco-mayor upon his return? Having spent eight years building a City Hall operation on the begging-bowl politics of Government blaming, he is left bereft of strategy. Worse, his own short-sighted populism is now catching up with him.
Year after year he announced he would “freeze TfL fares”. That sounds like free money in Londoners’ pockets, but the first problem is that regular commuters who buy travelcards or hit the daily cap don’t really benefit. It mainly benefits tourists, visitors, and occasional public transport users. The second problem is that, with each passing year, it forces TfL to sweat their assets, slash investment, and delay upgrades as their funds are squeezed again and again. This year’s freeze alone will cost TfL £140 million not just this year but in every future year. If the Mayor was freezing fares in the hope of buying time until a Labour Government could bail him out, this gambit has blown up in his face.
The fact is that the Mayor of London has a bigger budget than most government departments and more direct power than most Cabinet Ministers. While more money would always be welcome, the Mayor would do far more to tap the potential of this wealthy global city. For starters, the Business Rates deal signed during Boris’s mayoralty directly rewards the Mayor for London’s economic growth. If his wise stewardship of our great city leads it to even greater success and prosperity, the results flow directly into his own budgets. You can see why he resents a system that rewards results.
Things are even worse over at GLAP, the biggest London landowner you’ve never heard of. Through GLA Property Ltd, City Hall directly owns more than six square kilometers of land, including the whole of the Greenwich Peninsula and most of the docklands. GLAP’s whole purpose is to build homes, generate jobs and create growth. The City Hall coffers would not only ring with the profits from redeveloping car parks and disused industrial land, it would also see its share of the Business Rates and Council tax flowing straight back to the Mayor’s City Hall budget. Not to mention all the new homes and growth that Labor claim is their priority. But under Khan, GLAP is left to drift, a forgotten corner of the mayoral empire.
Unless he reinvents himself as man on a mission, taking responsibility and getting things done for London, what will he do for the next 4 years? With his status in the party diminished, his excuse for failure gone, and an expectation that Labour will field a fresh candidate for 2028, there seems no future left for the man who is marking time in a job he intended as a stepping stone. Meanwhile, London is left with a lame duck Mayor staggering though his final term. Our great capital deserves so much better.
First published in ConservativeHome, 27 September 2024.