Fares Fair was a public policy advocated by the Labour Party administration of the Greater London Council, then led by Ken Livingstone. The policy was implemented in 1981, but was later proclaimed to be illegal in the courts and rescinded the following year.
The Fares Fair policy had widespread support among Labour London members, who viewed it as a moderate and mainstream policy; no one had ever considered the legality of the move. In the 1979 GLC election, the political moderate Andrew McIntosh led Labour to victory, but the following day he was voted out by the party members and replaced by the hard left figure of Livingstone. Proceeding with the Fares Fair policy which they had promised in their electoral manifesto, they reduced London Transport fares by 32% in October 1981.
The legality of the Fares Fair policy was subsequently questioned by Dennis Barkway, Conservative leader of the London Borough of Bromley council. Taking the GLC to court, Barkway argued that the citizens of Bromley Borough were having to pay extra taxes for the London Underground, which did not reach into Bromley Borough.
More information on the Wikipedia page [1].
There are a number of relevant files at The National Archives