Londoners risk tax raid as Sadiq Khan faces Tube funding crisis 

Bosses at TfL are locked in talks with the Government over a long-term bailout deal worth £15.8bn. Ministers have already handed out more than £3bn to keep services running in the capital over the last year.

Sadiq Khan has threatened to charge drivers up to £5.50 a day to enter Greater London to plug the shortfall unless he is given permission to retain road tax collected in the capital. Both options have been rejected by Transport Secretary Grant Shapps, who said earlier this year: “I don’t think he can simply raid the national budget.”

With City Hall and Westminster unable to agree a deal before a pre-election communications blackout began last week, Mr Shapps offered a seven-week extension to the current central Government funding that runs out on Mar 31.

Mr Khan, the odds-on favourite to be re-elected for another four years in May, regularly clashed with Boris Johnson over the parlous state of TfL’s finances last year. The Prime Minister said Mr Khan had bankrupted TfL’s finances. In response, the mayor – who froze fares for four years from 2016 – said Mr Johnson’s remarks were a “blatant lie”.

Tony Travers from the London School of Economics outlined a number of options to put TfL back on firmer financial footing. He said: “The most likely is some kind of permanent tax fix that would need to be found.”

Mr Travers said that another option is a substantial cut to services, but added that cutting public transport would be at odds with the Government’s climate change commitments to reduce car use. A third option to increase fares more steeply would also be at odds with the country’s green ambitions.