So what went wrong with Philip Hammond’s proposed millennial railcard?

Oh, Phil, where did it all go wrong? Image: Getty.

Millennials just can’t catch a break, can they? Bad enough they have to deal with insecure work, over-priced housing and a future in which Sussex look like Mad Max: Fury Road; now, they won’t even get their railcards.

The government’s plans for cut-price rail cards for those aged 26 to 30, announced by Chancellor Philip Hammond in last autumn’s Budget, had already run into problems. March’s pilot schem saw the website where you signed up for a cards almost instantly fall over, unable to cope with the level of demand. Many of the more pro-active millennials, who spent an hour or more on the phone in an attempt to get their rail cards, were eventually told that there weren’t actually enough to go around.

Now, it turns out, this is as good as it’s going to get. The Spectator’s Katy Balls, wearing her other hat over at The I, revealed yesterday that the scheme has been delayed, because of a row over who’s going to pay for it. How long this delay will last it’s impossible to say – but I don’t think we can rule out “indefinitely”.

It’s tempting to view this as the latest example of the society-wide phenomenon in which the younger generation are getting repeatedly, and painfully, stuffed by their elders. It’s hard to imagine a promise of goodies for the over 50s being quietly abandoned in this way. Quite the opposite: subsidies to that generation are treated as inviolable, even when they look suspiciously like a waste of public money. Subsidies to the young, by contrast, are often framed instead as a somehow illegitimate attempt to buy votes: witness the row over Labour’s proposals for free bus travel for the under 25s.

But while intergenerational inequality may be a factor, the proximate cause of the delay is more prosaic. As Balls quotes a Treasury source as saying: “No-one wants to pay for it.”

Think about how a cut price rail card actually works. The rail network is privately run, so the card means that private companies will be required to accept lower fares from some passengers – even if they squeeze out those who are paying full-whack. To ensure the train companies aren’t disadvantaged (you may be fine with that; contract law isn’t), the government has to plug the gap.


The problem is, we don’t actually know how big that gap will be. Changing fares will change behaviour: you’d expect more young people to take subsidised trains, and perhaps more older people to think the train is suddenly a bit over crowded and to avoid it. The Treasury will have modelled this, when working out costs – but the fact demand was high enough to immediately crash that website suggests it may not have modelled it very well.

So: rolling out the cheap rail cards will require some bit of the government to accept responsibility for paying a bill without knowing how big that bill will be. Departments have budgets and targets to hit, so nobody is keen to do that.

And so, while that turf war continues, those lucky millennials will be denied one of the few things this government has ever promised to do for them.

There’s another way of reading this story – that it’s just the latest in a whole series of policies this government has announced to get good headlines, without giving the slightest thought to how it might actually work.

In that bucket you can also put Universal Credit, and starter homes, and the expansion of Right to Buy to housing associations, and even, if you’re so minded, Brexit. All of these things sound great, to a certain segment of voters, in a 300 word news story – but they all fall apart when you actually have to deliver them.

It’s tempting to view this news as yet another example of the British government screwing things up for millennials. But the real story, I suspect, is of the British government screwing up for itself. It’s learning slowly and painfully that, try as you might, you can’t govern by headline.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites

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What's actually in the UK government’s bailout package for Transport for London?

Wood Green Underground station, north London. Image: Getty.

On 14 May, hours before London’s transport authority ran out of money, the British government agreed to a financial rescue package. Many details of that bailout – its size, the fact it was roughly two-thirds cash and one-third loan, many conditions attached – have been known about for weeks. 

But the information was filtered through spokespeople, because the exact terms of the deal had not been published. This was clearly a source of frustration for London’s mayor Sadiq Khan, who stood to take the political heat for some of the ensuing cuts (to free travel for the old or young, say), but had no way of backing up his contention that the British government made him do it.

That changed Tuesday when Transport for London published this month's board papers, which include a copy of the letter in which transport secretary Grant Shapps sets out the exact terms of the bailout deal. You can read the whole thing here, if you’re so minded, but here are the three big things revealed in the new disclosure.

Firstly, there’s some flexibility in the size of the deal. The bailout was reported to be worth £1.6 billion, significantly less than the £1.9 billion that TfL wanted. In his letter, Shapps spells it out: “To the extent that the actual funding shortfall is greater or lesser than £1.6bn then the amount of Extraordinary Grant and TfL borrowing will increase pro rata, up to a maximum of £1.9bn in aggregate or reduce pro rata accordingly”. 

To put that in English, London’s transport network will not be grinding to a halt because the government didn’t believe TfL about how much money it would need. Up to a point, the money will be available without further negotiations.

The second big takeaway from these board papers is that negotiations will be going on anyway. This bail out is meant to keep TfL rolling until 17 October; but because the agency gets around three-quarters of its revenues from fares, and because the pandemic means fares are likely to be depressed for the foreseeable future, it’s not clear what is meant to happen after that. Social distancing, the board papers note, means that the network will only be able to handle 13 to 20% of normal passenger numbers, even when every service is running.


Shapps’ letter doesn’t answer this question, but it does at least give a sense of when an answer may be forthcoming. It promises “an immediate and broad ranging government-led review of TfL’s future financial position and future financial structure”, which will publish detailed recommendations by the end of August. That will take in fares, operating efficiencies, capital expenditure, “the current fiscal devolution arrangements” – basically, everything. 

The third thing we leaned from that letter is that, to the first approximation, every change to London’s transport policy that is now being rushed through was an explicit condition of this deal. Segregated cycle lanes, pavement extensions and road closures? All in there. So are the suspension of free travel for people under 18, or free peak-hours travel for those over 60. So are increases in the level of the congestion charge.

Many of these changes may be unpopular, but we now know they are not being embraced by London’s mayor entirely on their own merit: They’re being pushed by the Department of Transport as a condition of receiving the bailout. No wonder Khan was miffed that the latter hadn’t been published.

Jonn Elledge was founding editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.