Tube passengers face annual above-inflation hikes until the end of the decade under a new Government edict, it can be revealed.
London mayor Sir Sadiq Khan has been told that Transport for London fares should rise by the RPI rate of inflation – currently 4.3 per cent – plus one per cent in each of 2026, 2027, 2028 and 2029.
This is in return for TfL receiving almost £2.2bn of cash in the Chancellor Rachel Reeves’s comprehensive spending review earlier this month to spend on infrastructure over the next four years.
The bombshell has emerged in a letter sent by Transport Secretary Heidi Alexander to Sir Sadiq, who sets the TfL fares annually.
It is the second hammerblow to Tube passengers in the same day, after The Standard revealed a year’s delay in the arrival of the first new Piccadilly line train.
It is also the second successive occasion in which a Labour Transport Secretary has dictated to the mayor what he should do with fares, as Ms Alexander’s predecessor Louise Haigh last year told Sir Sadiq he had to mirror the increase in national rail fares - which he did in March 2025 - in return for an earlier grant.
Ms Alexander wrote: “The funding in this settlement is provided against an assumed scenario that overall TfL fares will rise by the value of RPI+1 for each year of this settlement.”
Sir Sadiq increased most TfL fares – including for the Elizabeth line and London Overground – by an average of 4.6 per cent in March, but froze bus fares at £1.75.
He has the ability to set rates of his own choosing but tends to follow the fares hike implemented by the Government on the railways.
The next TfL fares rise is not due until March 2026, but may be announced before Christmas.
This is separate to the annual rise in train fares on lines outside TfL’s control.
The mayor’s Tory critics said his hope of working in harmony with a Labour government had turned to dust - and blamed previous partial fares freezes implemented by the mayor.
Once again, Labour has forced inflation-busting fares rises on Londoners, humiliating Mayor Khan by yet again removing his fare-setting power. All while he pretends they're on our side and supporting devolution - ridiculous. https://t.co/cqUlI93yR4
— Neil Garratt AM (@NeilGarratt) June 20, 2025
Keith Prince, Tory transport spokesman on the London Assembly, said: "Khan's been asleep at the wheel and unfortunately his nine million passengers are about to find out what the consequences of that are.
“Fare freezes were a choice by the mayor that traded off investment in TfL for lower fares, which was electorally advantageous.
“Now that TfL still needs that investment, the Labour Government have decided they're not going to bail him out and he finally has to pay off the bill that he's been putting off.
“The consequence is that Londoners who could have slowly adjusted to incremental, beneath-inflation-level rises, will get whacked with a shocking great jump every year until the end of the decade."
1. Sadiq spent 8 years mismanaging TfL finances and blaming the (previous) Government for his failings.
— Cllr. Keith Prince A.M. (@KeithPrinceAM) June 20, 2025
2. He promised Londoners all would be different under a Labour Government.
3. Londoners will now suffer the inevitable consequence of his decisions. https://t.co/3wFPxGiZfY
TfL normally sets its budgets on the basis that fares will rise by RPI +1.
A TfL spokesperson said: “The mayor will set out what happens with fares, but the Government has been clear that the funding in the settlement is provided against an assumed scenario that overall TfL fares will rise by the value of RPI+1 for each year of the settlement.”
Ms Alexander’s letter, sent on Thursday and published on the Government website, says that the Government’s “willingness to significantly support investment in TfL’s major projects and renewals must be combined with TfL continuing to show financial prudence and generating additional revenue wherever appropriate”.
TfL has recently declared an “operating surplus” of £166m for the 2024/25 financial year, up £67m on the previous year.
However £120m of the surplus involved the use of a contingency funds, and TfL was also boosted by making huge savings following a re-evaluation of its pension fund.
TfL’s borrowing is now at a record £13.6bn.
The achievement of a second successive operating surplus is likely to be reflected in the bonuses paid to hundreds of TfL executives this year.
Ms Alexander, a former deputy mayor for transport under Sir Sadiq, also made clear the Government’s wish for TfL to generate additional income “and to pursue all opportunities to make operating efficiencies and savings”.
The Government’s capital grant to TfL is worth a total of £2,167m and will be paid from 2026/27 until 2029/20.
It includes funding for the procurement of additional Elizabeth Line trains, as agreed in June 2024.
There is no money in the settlement for the new HS2 station at Euston but TfL “has confirmed its agreement in principle to the preferred spatial layout for the Euston Station Campus” and to reaching an “affordable, viable solution”.
Sir Sadiq was disappointed not to secure additional cash to extend the DLR to Thamesmead.
But Ms Alexander said the Government “recognises the potential housing and economic growth that could be stimulated by extending the DLR to Thamesmead via Beckton, and acknowledges the substantial work undertaken on the programme to date”.
She added: “HMG will continue to work closely with the Greater London Authority and TfL so they can finalise a full business case and funding plan by autumn 2025.”
A DfT spokesperson said: “While Government has assumed a rise in fares when calculating funding for TfL, transport is devolved in London, and it’s ultimately for the Mayor to decide the level of fares passengers pay.
“Government has provided a record £2.2 billion settlement for TfL between 2026 and 2030 – the largest multi-year settlement for London for over a decade. This funding will have tangible and positive impacts for people in London and across the country, boosting economic growth as part of our Plan for Change.”
Revealed: The battle to crack down on London's fare dodgers
Sadiq Khan criticises Robert Jenrick's Tube fare dodgers video as he brands the Tory MP 'Mr Ozempic'
TfL’s war on fare dodgers stepped up amid concern of surge in ‘gate-pushers’
Double whammy fares misery for commuters as Tube and train fares rise above inflation
