My word, that is a shock horror story, isn’t it?

You mean if you borrow money to do infrastructure upgrades, you have to pay it back?

Whatever will they think of next?

So debt at a London level needs to be dealt with, but at a national level you can just continue borrowing and printing money to fund magical green projects?

Isn’t this the same Jenny Jones who defended “Sir” Ian Blair, the man responsible for the death of Jean Charles de Menezes?

Blanco, the difference is that the London Mayor has extremely limited tax-raising powers, so he has very little control over the overall size of his/her budgets. Mayors take what they’re given and top it up with revenue from transport fares and a little bit from the council tax precept.

The Mayor also no powers over tax raising/avoidance/evasion and all the other measures that a government could use to address a deficit.

The point to note from Jenny’s article is that London hasn’t really got off any more lightly by keeping Crossrail and the Tube upgrades… we’ve just retained the ability to borrow.

You also have to add the Olympics debt – remember Ken and his ‘Walnut whip’ addition to our council tax bills. Along with the large increase in bills from Thames Water to pay for the desalination plant, super sewer and the massive reservoir they are hoping to build in Oxfordshire. Some of these may be seen as necessary projects, whilst others should be opposed, i.e. the reservoir would be unnecessary if we took water conservation more seriously and hurried up the leaky pipes fixing. However, the key point is that the transfer of debt from national level to regional level tends to be a regressive measure at the moment as income tax is based upon how much you earn, but council tax is less so.

A similar principle applies to the privatised utility companies loading investment debt onto bills rather than the government carrying it. The nuclear supplement on electricity bills in the 1990s is a classic example of this approach. Government requires the utility companies to invest in the infrastructure but we nearly all pay a flat rate contribution via our bills, rather than a fairer contribution via our income tax.

A system of regional income tax is going to be a key demand for Londoners in the future, if this debt repayment continues to be loaded onto council tax bills and bus fares.

You mean if you borrow money to do infrastructure upgrades, you have to pay it back?

Whatever will they think of next?

Bizarre – you seem to have a lot of objections when the Labour govt wanted to do that, but no problems if a Tory mayor does it.

Actually, not so bizarre that, is it?

“Bizarre – you seem to have a lot of objections when the Labour govt wanted to do that, but no problems if a Tory mayor does it.

Actually, not so bizarre that, is it?”

If the Government were to act in the best interests of the country, then there would have been no objections…however we know all too well that Brown was more interested in acting in the narrowly sectarian interests of the Labour Party – hence those aircraft-carrier contracts.

Just a second Jenny do you oppose cross rail or do you oppose financing projects through debt. If you don’t oppose cross rail, can you imagine circumstances in which financing through debt might be cheaper than through current income- if so could you argue why this isn’t one of those case rather than just shouting about the fact that we have to pay interest on any debts we accrue.

Running a deficit like that – how irresponsible!

He should cut it at once.

The major plus about Boris’s London plans is that he’s not cutting back on long-term infrastructure investment. Fare rises can be reversed with a few months’ notice when politics swings back to the left, as can minor maintenance things like potholes in the road, but infrastructure projects take 15 years. I’m not normally a Bozzer fan, but all credit to him for taking the right approach, opting for short-term pain rather than long-term mutilation.

(also note that Tube ridership exceeded estimates last year. In that context, putting up fares isn’t a terrible thing – people clearly aren’t being deterred by current fare levels, despite the economy).

But hang on – I thought that large scale deficit spending was absolutely vital to maintain economic growth? Isn’t doing anything at all to reduce overspend grossly irresponsible?