London mayor Lord Sadiq Khan has confirmed that the Budget has given the capital the freedom to borrow more than £10bn for key infrastructure projects. The funding boost is set to unlock transport projects including bringing international rail services to Stratford International, the Bakerloo Line extension, and the proposed West London Orbital.
Mayor's confidence in funding
Lord Khan said chancellor John Healey had given him the financial firepower to push forward plans for the new transport schemes. "I can say confidently we can raise north of £10bn," Khan told the Financial Times in an interview. "We can start on some really big stuff. This is without doubt the most pro-London Budget since I became mayor."
The Budget contained areas where city mayors would be able to retain some of the income tax and business rates raised locally, along with a new overnight visitor levy or "tourist tax". City Hall and Treasury officials calculated that the guaranteed income streams from these locally retained taxes would support borrowing of at least £10bn for big infrastructure projects.
Transport projects to benefit
Khan said the West London Orbital could proceed most quickly because it would run on existing lines. The proposed new London Overground route would connect Hendon in north London with Hounslow in west London, using existing railway lines currently mainly used by freight trains. Plans include up to six trains an hour and four proposed new stations at Neasden, Harlesden, Old Oak Common Lane, and Lionel Road.
The Bakerloo line extension, which will see stations added, would be vital in improving connections in south-east London, he added. The first phase would see new stations at Burgess Park, Old Kent Road, New Cross Gate, and Lewisham, with the line potentially running up to 27 trains an hour.
Support for Stratford and Euston
In his first Budget speech, the Chancellor backed Lord Khan's plan for international trains to stop at Stratford in east London. He agreed to a Business Rate Retention Zone to fund the upgrade of the station, which is expected to cost some £20 million. Mr Healey also gave his support for a tax increment financing scheme to help fund a new Euston Station.
Welcoming the new powers, Lord Khan called the Budget "a really positive and significant day for London. At its heart is a new devolution revolution." He added: "After lobbying on the issue for many years, I'm delighted that the Government will help us to bring cross-channel rail services to Stratford International – making this station truly international for the first time."
On the broader fiscal changes, he said: "The Government have also taken significant steps to devolve transformational new powers and funding to the capital, alongside other communities around the country. By giving London the ability to keep more of the money we raise, we can invest billions of pounds more in our future, helping to finally unlock transformational infrastructure projects such as the West London Orbital, the Bakerloo Line Extension and the Euston knowledge quarter project, supporting tens of thousands of new homes, jobs and economic growth."
Despite the funding boosts, business cases, legislation, borrowing and funding decisions, and individual project approvals will still need to be addressed before Londoners see any changes on the ground.
