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A strong signal from government on Crossrail 2

Following prolonged campaigning from London First, Crossrail 2 took an important step forward this week with the publication of a joint statement from the Mayor and Transport Secretary. The statement highlighted agreement on the need for new transport infrastructure to support London’s continued growth, and emphasised further work that will now take place on funding and financing Crossrail 2.

We believe there are three important points to take away from this statement:

  • First, the sheer fact of a joint statement from the Mayor and Transport Secretary is in itself a significant and positive step. The two men visibly disagreed last year about the Mayor’s proposals for further rail devolution to the capital and have clearly had a strained relationship since. Crossrail 2 will need support from central and London government, as well as across parties, so this outbreak of grown-up politics is welcome news. Strong and sustained support for the scheme from business was a key factor in bringing the parties together.
  • Second, it is striking that the statement focuses on how Crossrail 2 can be paid for, not whether or not there is a good case for the scheme. Indeed, it contains a number of positive remarks about the need for additional transport infrastructure in the capital. Continued case-making will be needed to avoid back-sliding on this point, but we are encouraged that politicians and policy makers recognise the argument that London First and others are putting forward that Crossrail 2 is a well-evidenced and well-developed project. (The latest rail overcrowding figures published by the DfT this week were a helpful reminder of the pressures being faced in the capital).
  • Third, attention will now focus on funding and financing as the major obstacle facing Crossrail 2. This is the right area to concentrate on and a degree of hard work and creativity will now be required to demonstrate how London can meet the government’s tests for the scheme. The Mayor has already demonstrated how London could bear half of the cost of the scheme, but government has now asked whether London could fund half of the scheme during construction. This is clearly a tougher challenge.

The Transport Secretary and Mayor agreed to undertake further work on the affordability of the scheme ahead of this autumn’s Budget. This will consider funding and financing options as well as the potential for further value engineering, including through staging construction of the project. London First is now undertaking further work on funding and financing options to ensure a strong business and private sector viewpoint is captured in future discussions with government.

London First welcomed the joint statement, which was picked up in the FT, Evening Standard and City AM. Despite a backlash on the government’s decision to cancel rail electrification schemes, it was encouraging to hear most opinion formers and decision makers emphasising the need for investment in the north as well as in London – rather than instead of.

In anticipation of just such a debate emerging, we have recently stepped up our engagement with business groups, politicians and policy makers in the major metro areas outside London, emphasising the importance of investing in both London and cities outside the capital.  We were also able to make these arguments this week in a debate with IPPR North on Adam Boulton’s ‘All out politics’ show on Sky News.  We will continue work to strengthen relationships between London and other metro areas, including through the upcoming party conferences.

For further details contact David Leam.

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