London ‘left out’ of Reeves’ spending review
London will find itself low on the chancellor’s agenda in the upcoming spending review, reports suggest.
London Mayor Sadiq Khan has been lobbying for extending the DLR to Thamesmead, and the Bakerloo line to Lewisham. However, getting the requisite funding to grow the transport system is looking unlikely. Bringing the Bakerloo line further south is anticipated to cost between £5.2bn and £8.7bn.
The government is under pressure from its MPs to redirect capital spending to infrastructure outside the southeast.
Fresh research from the Institute of Public Policy Research found that in the past decade, London received 2.43 times as much public transport spending per capita than the North.
London transport spending has increased 2.11 times faster annually than spending on transport in the North.
Chancellor Rachel Reeves has already announced £15.6bn will go towards regional transport – particularly in the North and the Midlands – as part of the spending review package.
Reeves expressed her ambition to level up regions across the UK so as to tackle the brain drain to big cities – primarily London – which attract young workers with higher wages.
Reeves said that the aim is for people to be able to “stay in the place where they grew up, the place they want to live, where their families are.”
Zero sum growth
Khan’s team has also been vying for the power to introduce a tourist levy, which would be tacked onto short-stay accommodation, like hotels, and a substantial uplift in funding for the Met.
A source close to the Mayor said: “it would be unacceptable if there are no major infrastructure projects for London announced in the Spending Review and the Met doesn’t get the funding it needs.”
“The way to level up other regions is not to level down London,” the source said.
According to reports, there will be a real-terms increase in police funding, so at least some of City Hall’s asks might be heard.
Still, the Mayor’s office has raised concerns that growth in the regions might come at the expense of investment into London. The argument has been made that England’s capital should see high levels of funding, because “when London does well it means the whole country does well.”
“We know that and that it will simply not be possible to achieve national growth ambitions without the right investment and growth in our capital,” the source added.
“We need backing for London as a global city that’s pro-business, safe and well-connected. It’s absolutely crucial at this time of global uncertainty that we send the right message to attract investment, which helps to bring prosperity to the whole of the UK.”
Chris Hayward, policy chairman of Canada said that in order to sustain the momentum in growth the capital has achieved – seen through a 25 per cent increase in jobs since the pandemic – the spending review needs to centre London.