Do we want the private sector to contribute or not?

Please note this post is from my previous blog. To read my posts during the 2017 General Election campaign click here.

An interesting idea for investing in London’s infrastructure has been greeted with a chorus of cynicism this month – and in so doing has exposed a deep contradiction in attitudes towards the private sector’s obligations to the rest of us.

Untapped Resource, a report published by the GLA Conservative Group, makes a compelling case for private sponsorship of London Underground stations and lines.  No doubt with his eye on securing for this idea the media attention it deserves, the report’s author Gareth Bacon even came up with an eye-catching example of what it might mean for our treasured tube map.   Step forward, Burberry by Bond Street and Virgin Euston;

Sponsored tube map
The Untapped Resource report’s vision of what a sponsored Tube might look like

This is an idea I have supported for a long time.  Gareth Bacon’s report finds that £136million of the sponsorship that could be secured in this way could freeze fares for a year, and £204million could cap rises at inflation for the next three years.  With household budgets under pressure across the capital, this could make a real difference.  For London’s hard-pressed taxpayers, it’s some welcome relief as someone else foots the bill.  For the companies stumping up the cash, it’s a chance to give something back and, yes, to advertise and therefore gain a (modest) competitive advantage in the market place.  To me – as long as there is a level of judgment over which companies can become sponsors, and as long as these decisions take into account public opinion – this is a win-win.

The cynics, however, were quick to line up on the opposite side of the turnstile.  The Londonist warns of the future McNorthern Line attracting protestors and presenting a “McWhopper of unintended consequences”.  The Guardian’s Dave Hill rejects the idea instinctively, doubting whether “the financial gains would be worth the desecration”.  Desecration!? Seriously?  Labour’s Val Shawcross told MayorWatch there was “massive reputational risk” if a sponsoring company “failed to pay their tax or employed people in unsafe and degrading conditions”.

And it is in part of Shawcross’ remarks that there lies a hint of the contradiction at work.  On the one hand, we line up as a society to pour scorn on companies that minimise the taxes they pay, accusing them of ignoring their responsibility to society.  On the other, schemes that allow companies to do the exact opposite by using their CSR and advertising budgets in part to contribute to the public good receive equal suspicion.   We can’t have it both ways.  We should of course be clamping down on tax avoidance and ensuring that all companies pay their far share in tax – but we should also acknowledge the extra contributions that large chunks of the private sector make by other means.  Using some of their advertising budgets to help reduce Londoners’ transport fares would certainly qualify.

As for Dave Hill’s ‘desecration’ argument, can we honestly say that we are worse off a society for having Barclays’ blue adorning Boris bikes or Emirates’ red on the side of the UK’s first urban cable car?  I don’t think we can.

If having to make room for the private sector on the tube map is the only price we have to pay to keep Londoners’ fares lower for longer, it’s a price well worth paying.

2 thoughts on “Do we want the private sector to contribute or not?”

  1. I have many problems with this article. Four immediate:

    1) If Mr Hartley thinks that any advertising money will contribute to lower fares for any significant period he has a trusting nature that I admire but many may find somewhat naive

    2) The article doesn’t factor in the lost income London will suffer as a result of selling its heritage. I suspect fewer tourists will want to visit Buckingham Palace sponsored by Pepsi. You strip the city of its (valuable) romance.

    3) Reputational risk. What happens when one of the sponsors get found tax avoiding/killing trade unionists in South America?

    4) And crucially, ownership. Who owns the fabric of the city? Does TfL or the Mayor have the right to sell the names that are integral to the history of London? In the end London as a concept is the possession of its citizens. By selling names (which are not meaningless but represent the mythology of a 2,000 year old city) politicians are essentially disinheriting the electorate.

    1. Thanks for the comment.

      1) You are too kind (I think?), but this is just yet more cynicism of a different type, and doesn’t alter the point. Your belief that politicians wouldn’t keep their promises over what to do with the money doesn’t equate to it being a bad idea to raise it in this way in the first place for the social good. Besides, if this kind of sponsorship was communicated to the public as not just advertising but as business doing its bit to help keep fares down – a message that has a good chance of getting through thanks to the sponsors themselves, for one – then it would take a brave politician to try.

      2) No-one is suggesting renaming Buckingham Palace. The proposal is about allowing a new, different kind of sponsorship on a transport system where advertising and sponsorship is already commonplace. Londoners polled preferred the idea of location-specific renaming to wholesale re-designation – Virgin Euston, not Virgin station – a point of view I agree with. We would still have our landmark tube stations, with all their historical significance, just with an extra word or two in the signage and on the map. I can of course see that there is a downside (although I doubt it would include lost tourist income), but I happen to think its a very small one in return for hundreds of millions pound in investment that could help Londoners in difficult economic times.

      What’s more, your argument definitely wouldn’t apply to visitors from Madrid, Dubai and New York – all tourist destinations that have already implemented similar revenue-raising schemes.

      3) As I say in the post, a level of judgement will of course be required as it is with all sponsorship arrangements. No-one would want to see Wonga Circus less than me. Public opinion has to be taken into account, as well as reputational risk – but these are challenges to execution, not principle.

      4) Of course London belongs to us all – but I can’t agree that this would see anyone disinherited from anything. If the electorate were to disagree, they can of course demonstrate that opinion at the ballot box and through other means with their representatives. It’s also worth pointing out that in a city almost completely dependent on public transport, the benefits that the scheme would bring would be felt by almost all of us in some way.

      Thanks again for reading and if you have more arguments please don’t hold back!

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