25 September 2007
City says Crossrail funding gap needs to be bridged
City policy chairman Michael Snyder today responded to
yesterday's reports that the City had failed to be helpful enough
in securing Crossrail, the much-needed west-east transport
route.
In a comment article in today's Evening Standard newspaper he
roundly criticised those who felt big firms - who already pay large
taxes - should pay even more for public transport.
"Rather than saying the City is not doing enough for public
transport, it would be more accurate to say that public transport
is not doing enough for the City."
Read the full text below Comment article from the Evening
Standard, page 13, Tuesday 25 September 2007
It's not the City that is holding up Crossrail
Ministers want big business to pay more towards the funding of
Crossrail. But they ignore the benefits it will bring to all, says
City of London Corporation's policy chairman.
By Michael Snyder
The City has always been firmly behind Crossrail, and I
have personally been involved in pressing the case for more than
decade. So recent suggestions that we were being unhelpful came as
some surprise to me. The City and its businesses are utterly
committed to Crossrail. We're prepared to pay our share. But we're
not going to hand the Government a blank cheque.
Be in no doubt for a start: we need Crossrail and it is worth
paying for.
London’s most important piece of new transport infrastructure
for a generation is needed as soon as it is possible to get it
built - needed not just by the City and Canary Wharf, but also by
anyone who uses the Tube or any other key public transport artery
through the capital. Business travellers will benefit hugely by a
fast link from Heathrow to Canary Wharf via the City and the West
End – but so will everyone else.
And with London contributing, £20 billion sterling a
year net to the UK economy, the UK will
benefit, too. Overall, Crossrail will bring £30 billion net in
benefit to the UK over 60 years and will not only improve the
comfort of London commuters and visitors, but it will help us all
financially, too.
On the thorny question of paying for Crossrail, naturally there
is some controversy. Paying for a major piece of infrastructure
that will arrive in a decade is rarely a popular activity for which
today’s politicians will be remembered warmly.
But there seems to be broad agreement that all businesses across
London (except the small ones) should paying something additional
on their rates, with money coming from extra and premium fares, and
the UK taxpayer contributing, too.
The City of London Corporation’s work on Crossrail over the
decades has included just about everything - from detailed
engineering submissions and general economic studies to the helping
major businesses understand that something like three per cent on
their rates is the likely price of getting Crossrail off the
drawing board and in to reality.
But exactly how much extra on the business rate should be is
still to be fixed and some key stakeholders (for example the
private firms that operate Heathrow and Canary Wharf) are now being
asked to make additional contributions from the likely extra
profits their shareholders will make once Crossrail is working.
I've been at the Labour party conference in Bournemouth this
week. Detailed plans for Crossrail have accompanied the City of
London Corporation every time it has visited a party conference
over the last two decades – whether Labour, Tory or Liberal
Democrat. But while in some dark years, politicians, whose minds
are naturally focussed on short-term issues, have shown little
interest in the project, now all this has changed. Everyone wants
Crossrail. But there is a reluctance to sign a cheque for it.
The latest twist in this long story is the suggestion from Ruth
Kelly the City firms (and the City of London Corporation) should
dig deep to find even more - perhaps using the planning system.
I have some sympathy with the view that Heathrow’s BAA and
Canary Wharf should have a special role to play in funding
Crossrail. Their developments will draw direct and measurable
benefits from the Crossrail project so they can justify to their
shareholders a further call on funds. But such arrangements – if
made at all - should be particular exceptions to the general
responsibility for Crossrail which we must all share.
Travellers on Crossrail who will want a fast, direct trip from
Heathrow to the City or Canary Wharf should also expect to pay a
premium fare for a service that will be faster than a cab, less
vulnerable to delays and, with phone connections, just as
business-friendly.
And even Londoners who do not work in the City, Canary Wharf, or
in the West End will benefit from the easing of general Tube
congestion that Crossrail will bring to the capital as a whole. So
it is right that all the businesses across London (with a rateable
value of more than £50,000) should contribute. But as for the
suggestion that City business – or even the business authority for
the Square Mile, the City of London Corporation – should provide
additional funds, I believe the argument is upside down.
The Square Mile is certainly a strong generator of wealth (and
employer of more than 340,000 workers). And it will benefit from
Crossrail, especially as more than 100,000 more City workers come
to work here over the next decade.
But our national principle is that general taxes should pay for
general benefits. Indeed, rather than complaining that the City is
not doing enough for public transport, it would be more accurate to
say that public transport is not doing enough for the City and City
workers.
Just taking the income tax to be paid by the 50,000 extra Square
Mile City workers who we will need to cope with without Crossrail,
their income tax amounts to more than £1 billion a year. And each
and every City worker is entitled to ask when exactly is the
Crossrail for which their taxes are paid going to be built?
Similarly, those businesses in the Square Mile currently being
asked to pay more for Crossrail are entitled to ask why the
billions they pay in taxes are not already enough.
The City of London Corporation, the business authority for the
business district, collects about £700 million a year in business
rates from Square Mile businesses. Under the principle of general
taxes for the general good, 90 per cent of this is passed to
central government. I hope the day never dawns when the City is
allowed to keep all its money: it is right that UK-based financial
services make large and direct contributions through taxes to the
UK as a whole. It is the contract of citizenship which we all
gladly sign.
Of course, the City is prepared to pay its way and contribute
along with others London businesses in order to get Crossrail
built. But its share of the tax resources is already a huge one and
while its pays it way, others must do so, too.
This is surely a problem we are up to solving. The City is ready
to keep talking to find a solution. But ministers need to find one
soon.
Ends