Proposals to make Londons landowners foot the bill for CrossRail will be submitted to the government by Mayor for London Ken Livingstone.
The move will mean that owners of land around the proposed CrossRail Line 1, the cross-London rail link which would connect Heathrow to Canary Wharf and Stratford, would be taxed to help pay for the cost of the £4.5bn scheme.
Speaking at this weeks meeting of the House of Commons urban affairs subcommittee on tall buildings, Livingstone said: “We are preparing a proposal to recommend that a sizeable proportion of the costs should be borne by a levy on the land around the development. We have seen land values around these projects soar.”
He added that the proposals will be submitted to the DTLR and the Treasury: “We will be sending the proposals to transport minister John Spellar.”
Transport for Londons commissioner Bob Kiley suggested that the levy could become “one of the tools in the tool box” to finance the project.
Although the CrossRail company is jointly owned by government-funded Transport for London and the Strategic Rail Authority, little money will come from government.
Speaking at the BPF conference in Brighton this week, Sir Alistair Morton, former chairman of the SRA, told EG: “I would think that this is not the wrong way to go about it.”
The SRA estimates that the first line would be completed after 2010, but in a letter to EG this week, CrossRails chairman, Sir Christopher Benson, said it could be completed earlier.
Financing will be one of the major hurdles that the project will have to clear if it is to go ahead on schedule. The levy would tax local landowners for the potential windfall profits created by CrossRail. The money would be used to finance the scheme.
Chelsfield, which is currently developing a 2.1m sq ft scheme at Paddington Basin and a 5m sq ft regeneration of Stratfords station, would be one of the companies hardest hit.
Chelsfields development director, Robin Butler, said: “Were not scared at all of putting our hands in our pockets to pay for transport to our own sites, but a levy like this could be seen by others as a new poll tax.”
Richard Lambert, head of commercial and residential property at the BPF, said: “It could set an unnerving precedent. Its an interesting concept, but we would want to look at it in more detail if it were taken forward seriously. Instinctively, we are not in favour of any new taxes.”
The land levy method has been used to finance infrastructure projects in the US, Denmark, Australia and New Zealand.
Livingstones move is thought to have been prompted by discussions with the pro-land tax Henry George Foundation. The foundation states: “A tax on land values is a fair tax because the person who owns land derives benefit from something which he has not made.”
EGi News 02/02/02
