Bus fare 'tram tax' on agenda in leaked proposals

A "TRAM tax" which would see bus fares rise to pay for an extension to Edinburgh's tram line is being considered by the city council.

A confidential report leaked to the Evening News has revealed the controversial move is seen by senior officials as one way of raising the £55 million needed to build a Roseburn to Granton spur line.

The leaked papers also show the idea of selling off the enormously successful Lothian Buses was raised, before being dismissed. The idea of increasing fares to pay for the trams will spark a furious reaction among thousands of bus passengers. Senior councillors today voiced their opposition to the idea after they were told about the private discussions by the Evening News.

Lothian Buses' chief executive Neil Renilson has also objected, saying the company "categorically" has no plans to charge passengers more to pay for the project.

A council spokesman, however, refused to rule out a "fare levy," despite confirming that selling the company was not an option.

As the majority shareholder in Lothian Buses, the council could attempt to force through such a move.

The minutes of the council's "internal planning group" – a high-level discussion between the chief executive and his most senior directors – explain that a project team has been set up to look at the tram line extension, known as phase 1b.

The spur was originally put on hold in 2006, but trams firm TIE has since secured a fixed price of £87m if it can commit to the project before next July. Money left over after paying for the main Newhaven to Edinburgh Airport line is being put towards the extension, leaving an estimated £55m shortfall.

Today, deputy council leader Steve Cardownie, who as the city's SNP leader opposed the tram project, said: "Before a passenger has even set foot on a tram, it's in trouble. If a fare levy was introduced, bus passengers would be subsidising the trams. All these things were predicted by the SNP and they are now appearing on agendas, which is very worrying." He added: "I don't normally comment on leaked reports. However, this does cause me concern.

"At the very outset of this administration, I presented a motion to council that under no circumstances would the sale of Lothian Buses be considered to make up any shortfall.

"It's disconcerting that this is even on the agenda and the SNP will do everything it can to resist this. I will be asking the chief executive why this has been raised."

The minutes of the meeting on June 11 explain that TIE finance director Stewart McGarrity is leading the 1b project team, and will report to Transport Scotland by Christmas.

In a section titled funding/options appraisal, the document lists "Lothian Buses contribution through fare levy or potential disposal" among other items, such as "prudential borrowing" and further Transport Scotland investment.

The council's chief executive, Tom Aitchison, said today: "A project team identified a broad range of options, some of which we will look at further and some of which were immediately rejected.

"The council has always been emphatic that the disposal of Lothian Buses, which is a key asset to this city, is not an option that we would wish to take forward.

"We remain absolutely committed to delivering an integrated public transport system for the city involving both trams and buses. Lothian Buses are an essential part of those plans. "

A spokesman for TIE said it was asked to look at the various options, including the potential disposal of Lothian Buses, by the council.

Labour group transport spokesman Ian Perry said today: "The administration should be making it absolutely clear to any official that this is not worth discussing and wasting their time talking about. We are absolutely opposed in principle to selling Lothian Buses." Some Tory members are known to be less opposed to a sell-off, and the group's Edinburgh transport spokesman, Mark McInnes, said it was more important to ensure that taxpayers' cash is not used to fill the funding gap. But he added: "Our manifesto commitment is to keep Lothian Buses. We would need to be convinced otherwise."

Mr Renilson said: "I can categorically confirm that (we have] no plans to increase bus fares to generate funds for the construction of the tram."