Spring Statement 2025: Reeves urged to fund Bakerloo Line and HS2 Euston
London’s property sector has called on Rachel Reeves to introduce new funding models in the Spring Statement to prevent critical transport projects, such as HS2 Euston in the UK capital from stalling.
The London Property Alliance, which represents real estate developers and investors, said the government “must be bold” if it wants to move forward with projects including the Bakerloo Line extension, HS2’s Euston terminus and Crossrail 2.
In a submission to the government on Monday, it outlined a series of “innovative new funding models” it argues are necessary to maintain progress amid fiscal pressure and government spending cuts.
This could include business rates supplements within central London or additional development taxes, which were used to fund the Elizabeth Line.
The investor group also suggested using revenue from fareboxes to secure debt for major projects and speeding up the release of capital from the Community Infrastructure Levy (CIL), which was introduced when Boris Johnson was mayor.
“Central London is the most economically productive area in the UK and therefore absolutely critical to the Chancellor’s growth mission,” Alexander Jan, chief economic adviser at the London Property Alliance, said.
“The opening of the Elizabeth Line brought a huge economic boost but, with London’s population set to reach 10m in the coming years and amid fierce competition for businesses and talent from Paris and New York, we cannot afford to stand still.
He added: “With little fiscal headroom, the Chancellor must look at all funding options, including additional levies for those businesses in central London that will benefit from these ambitious projects. Now more than ever, we need a creative and collaborative approach between public and private sectors.”
According to the London Property Alliance, London’s Central Activities Zone (CAZ) – which spans roughly the area of travel zone 1 – contributed £315bn to the UK economy in 2024 and supported 2.2m jobs.
Recent analysis, produced in partnership with the Centre for Cities think tank, found Tube ridership in the city reached around 87 per cent of pre-pandemic levels by the 2024, well ahead of New York and Hong Kong.
The growth comes despite Transport for London (TfL)’s capital programme being significantly smaller than its international rivals, with around £1.9bn slated the next few years.