Tax tourists and build homes on Bromley’s green spaces to pay for the Bakerloo line extension, a new report authored by an influential Labour think tank has urged.
‘Wealthy’ London should be given the tools to pay for its own infrastructure such as the Bakerloo line extension to Hayes, including tax-raising powers similar to those used by Paris to finance transport projects, the report said.
The Paris city region makes €7 billion a year from a 3 per cent transport levy on local incomes which is ringfenced for transport spending, and can charge tourists up to €15 a night to pay for infrastructure.
More flexibility to raise council tax, provided funds will directly go to infrastructure investment, would also be handed over, as would the ability to deploy development corporations that could buy up land cheaply for future building.
The report, drawn up by Labour Together and the YIMBY Alliance, also stated that Sadiq Khan should use a Mayoral Development Corporation to force Bromley Council, which sits at the end of the proposed extension, to build more homes on the borough’s green space.
“Bromley is the least dense London borough because it is over 50% greenbelt, with only 13% as many residents per km² as Tower Hamlets. The borough’s golf courses alone could hold more than 10k new homes,” said the authors.
For every 10,000 homes built on the line of the proposed route, London could generate £2bn in value towards funding the project, they estimated.
However, the report noted that this would lead to a “bruising political fight with Bromley. Any mayor would sidestep it if there was the option of just getting the Treasury to write a cheque.”
In exchange for the new powers, the Mayor would no longer be able to appeal to the Treasury for funds. “It is ridiculous that London, one of the richest economies in the world, has to come to the government with a begging bowl to fund the infrastructure it needs,” the report’s authors say.
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The cost of extending the Bakerloo Line to New Cross and Lewisham via the Old Kent Road has spiralled from £2-3 billion in 2010 to between £5 and £8 billion at the last estimate in 2021. It was first included in the Mayor’s Transport Strategy in 2010, but has repeatedly been placed on the backburner ever since.
Part of the project has been funded by London, but is awaiting billions of pounds from the Treasury before it can get off the ground. Despite London offering to pay for much of the project through levies on businesses and housing developers along the proposed line, Transport for London is understood to be several billion pounds short.
Hopes were dashed earlier this summer that the government’s June spending review could unleash funding for the project. Chancellor Rachel Reeves announced a £2.2 billion multi-year capital funding settlement for TfL – some way off the amount needed to fund the Bakerloo Line extension.
In this case and others like it, the report says, the Mayor of London should have the powers to raise the funds himself instead of appealing to the Treasury.
Despite the funding let-down, the project appears to be inching closer. The Mayor recently finished consulting on a new express bus to trace the route of the extension, and earlier this year the Transport Secretary formally safeguarded the land against any future development.
The report highlighted the Elizabeth Line as an example of how infrastructure should be paid for, of which only £5bn was paid by the Treasury out of the total £19bn cost of the project.
The authors’ recommendations echo suggestions earlier this year by business leaders that the Mayor should be allowed to raise money for projects like the Bakerloo line extension or Docklands Light Railway (DLR) extension to Thamesmead, essentially by “borrowing against” the schemes’ future economic benefits.
This argument in technical terms is known as ‘land value capture’ and involves borrowing money that will eventually be reclaimed by the government via windfall taxes on the increased value of the land.
A version of it – focused on business rates – was used to partly-fund the Northern line extension to Battersea Power Station.
“Richer areas like London should have the powers and incentives to fund their own infrastructure, freeing up central government funding for the parts of the country that can’t yet stand on their own two feet,” the report’s authors state.
“That means beefing up their tools to get more money out of landowners who make windfall gains in land values as a result of development, and from businesses who will see bumper footfall and profits.
“But with more power comes more responsibility. In return for those tools, London must use them to pay for its own infrastructure. It can’t be made to bring its begging bowl to Whitehall. London could fund the Bakerloo line extension, for example, if the Mayor fought the boroughs along the line to build much more housing.”
A spokesperson for the Mayor told the Local Democracy Reporting Service: “The Mayor welcomes the new era granted to London through the latest Devolution Bill, which means we can move forward with innovative new policies to boost economic growth and raise living standards in the capital as well as across the country.
“More devolution would allow us to unleash London’s economy further, and compared to other global cities we remain a heavily centralised country, with too much power still in the corridors of Whitehall.
“The Mayor will continue working closely with the Government to deliver more devolution for the capital as we build a fairer, safer, more prosperous London for everyone.”
The Treasury was contacted for comment.
Additional reporting by Kumail Jaffer
What a stupid idea!
Just destroy all Bromley’s green space and make it overcrowded like Southwark.
We live here precisely because we like green space, it is not up to Southwark residents or any one else outside Bromley, including the Mayor, to change the character of Bromley.
It is for Bromley residents only.
TBH if it’s a choice between the green space and the Bakerloo line, we’ll take the green space!
And please note, Bromley is a large Borough, the Bakerloo line will only help a small minority of Bromley, not even vaguely close to the majority of it.
A poor substitute for genuine economic growth and the same old resorting to short cuts to fund public infrastructure. If this is the best Labour can come up with we are all doomed.