RMT SLAMS “TRANSPORT FOR LONDON BILL” MULTI-BILLION POUND RIP OFF BY THE SUPER-RICH
Tonight, Tuesday 12th April, the Transport for London Bill has its third reading – a Bill which transport union RMT has slammed as a “multi-billion pound rip off tailored yet again to the tax-dodging, global super-rich.”
The Transport for London Bill was introduced into Parliament to help TfL maximise, at all costs, the profits that it makes from developing its property.
Specifically, under clause 5 of the bill, TfL would have been able to enter into novel company structures – including opaque, tax avoiding offshore structures known as “limited partnerships”. Limited partnerships are well-known vehicles for laundering capital and were used recently to defraud the Moldovan Central Bank of millions.
RMT in conjunction with Andy Slaughter MP, John McDonnell MP, and numerous other labour MPs and the Save Earls Court Campaign combined together to petition against the Bill and try to prevent the most ill-conceived aspects of it from becoming law.
As a result of our campaign, TfL finally conceded defeat on clause 5 and abandoned its attempt to acquire the power to enter into limited partnerships. However, it persists with the remainder of the bill.
The union has undertaken further investigation into how TfL was persuaded to engage in the development of the Earls Court site – the model for future TfL development. After an examination of Capco’s (the property developer behind Earls Court construction) annual report, new concerns have arisen.
Specifically, a note in Capco annual report causes us to believe that the TfL Bill still has potential for TfL to give away its assets too cheaply and too riskily. In the case of Earls Court, TfL has already invested nearly £400 million in Earls Court Partnership Limited non-interest bearing loan notes – notes which are not redeemable until 2064 [Note 1].
Under clause 4(2) of the TfL Bill, TfL would be able to permit “charges” to be entered against its property as a way of funding joint property development. To raise finance more cheaply, TfL would be able to mortgage its assets to fund property development activities.
There is a fresh financial crisis brewing – meaning that there is an increased risk of corporate defaults – especially in the over-leveraged property sector. TfL is entering the property development game at precisely the wrong moment and in precisely the wrong way.
RMT General Secretary Mick Cash said:
“The wholesale withdrawal of central government financial support for TfL is forcing it to risk its assets in complex property gambles no matter how dodgy and no matter what the real cost to Londoners.”
“The construction firms with which TfL plans to engage, are running rings around TfL, helping the hapless organisation offload its prime London assets at well below the market rate.
“We have no confidence in TfL to be able to secure a fair price for its land – and our concerns are borne out by its dreadful governance failures in relation to the development of Earls Court.”