Budget unlocks £10billion that can be borrowed for London infrastructure projects, Sadiq Khan confirms

London mayor Lord Sadiq Khan has confirmed the Budget has given the UK capital the freedom to borrow more than £10billion for key infrastructure projects.

Lord Khan said chancellor John Healey had given him the financial firepower to start pushing 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.”

Mayor of London, Lord Sadiq Khan has said London can now start on ‘some really big stuff’

PA

The Budget contained a series of 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 have calculated that the guaranteed income streams from these locally retained taxes would support borrowing of at least £10bn for big infrastructure projects.

Khan said the West London Orbital could proceed most quickly because it would run on existing lines.

The West London Orbital is a proposed new London Overground route that would connect Hendon in north London with Hounslow in west London, using existing railway lines that are 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 proposed new West London Orbital route

TfL

The Bakerloo line extension, that will see stations added will be vital in improving connections in south-east London, he added.

Plans to extend the Bakerloo line

TfL

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 to fund a new Euston Station.

The Budget set out a series of 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”.

Welcoming the new powers, previously Lord Khan called the Budget “a really positive and significant day for London.

“At its heart is a new devolution revolution.

“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 added: “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 huge 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.