Budget 2026: How Chancellor could deliver for London by backing big transport projects

John Healey is being urged by bosses in London to give Lord Sadiq Khan new financial powers to press ahead with key transport projects.

Lord Sadiq Khan and Chancellor John Healey

Getty/PA

“More power in the hands of the local leaders who know their areas best.”

The business chiefs argued that the Mayor of London should be given new powers to borrow against future revenue from transport and other schemes.

Plans to extend the Bakerloo line

TfL

However, he also emphasised: “The plans to rewire the state through greater devolution have great potential.

“They promise an improvement in delivery of public services and crucially give local leaders the ability to drive forward the infrastructure, housing and education that their communities and businesses need.

“Allowing more of the tax revenues raised locally to be retained locally will be key to enabling and incentivising decision-making that drives and unleashes growth.”

Business chiefs want London Mayor Lord Sadiq Khan to be given new financial powers

PA

The business group, which represents more than 170 major employers in the capital, believes that city-regions with a proven track record, such as London and Manchester, should be empowered to borrow against future revenue streams without requiring case-by-case approval from the Treasury.

Such a reform would encourage investment in growth-boosting infrastructure, it argued.

In its Budget submission, BusinessLDN also urged the Chancellor to:

* Boost London’s housing market by cutting stamp duty on new homes by capping it at 1% for all first-time buyers and downsizers

* Encourage the hiring of young people including through an employer National Insurance contributions holiday and increased Employment Allowance for firms that take on unemployed 18-24-year-olds