I’d like to begin by thanking Place London for inviting me to today’s event, and to Richard [Barnes, Chair] for that kind introduction.
It’s wonderful to see so many people here with an interest in this part of the city.
I may be new to this ministerial brief, but I’m not new to London. As MP for Wimbledon, this is my home patch.
So I can reassure you that investment in the infrastructure, regeneration, and the economy of west and south west London is very close to my heart.
This year we’ve seen London host a spectacular Olympic and Paralympic Games.
The Olympic Park might have been in east London, but the whole city embraced the Games, including west London with events at Wembley and Earl’s Court.
London 2012 - we planned, we built and we delivered.
So we can all take pride in the way our capital showed itself to the world this year.
As a city that takes massive infrastructure projects in its stride.
As a city that deals with huge numbers of commuters, visitors and residents.
And as a city that successfully staged the greatest show on earth.
The challenge is to keep up that momentum, and make sure we’re planning ahead so that London stays where it should be - at the top of the list of world cities.
That will require continued investment in transport.
To relieve congestion as the city grows.
To make new links, connecting people and businesses
And to support regeneration projects that are vital to development.
This government is putting in the resources because we know that giving people and businesses access to a high quality, high performance transport system makes sense for our country’s future prosperity.
That’s why, in the current Spending Review period, we committed £30 billion to road, rail and local transport projects across the country.
But we also understand that investment is vital for our capital:
- to support a labour productivity rate here in London that’s more than 31% above the national average
- to maintain the City’s position as the world’s number one financial centre
- and to fuel an economy that accounts for around 19% of UK GDP
London is Britain’s economic engine.
And, by investing in the transport infrastructure that serves and supports the capital, we can keep that engine powered, for the benefit of the whole country.
I know that, for many of you, aviation is one of the key transport issues at the moment, especially on this side of London.
So there’s a legitimate debate to be had about the future of aviation.
But it’s important that debate is informed by the facts rather than by anecdote.
In Heathrow, we’ve got the busiest international airport anywhere in the world.
And our capital and our country are among the best connected places on the planet.
Without question we are in the global aviation premier league.
But as my colleague the Secretary of State reminded us in his recent Party Conference Speech in Birmingham, it’s not going to last, if we don’t act.
Birmingham, Manchester, Glasgow, Edinburgh all have first rate airports too.
But in the south east the runways are filling up and the planes are being left to circle in our skies.
So in the short term we’re increasing reliability and reducing delays by trialling operational freedoms at Heathrow
But it’s vital that we think long-term about how we remain globally competitive and globally connected.
Of course there are all sorts of ideas - usually as many ideas as there are people in the room.
So we’ve asked Sir Howard Davies to chair an independent Airports Commission to consider the connectivity needs of the UK, and to make recommendations to government on how those needs can be met.
The Commission will provide an interim report to the government no later than the end of 2013 and then publish a final report by the summer of 2015.
I expect that Sir Howard will soon be setting out further details on the membership of the Commission and its work including how he intends engaging with interested parties.
So, if you class yourself as an interested party, then watch this space.
Investment in London’s transport infrastructure
I’d like to talk now about some of the other transport projects that are already underway.
Improving the road networks that serve London for example.
Whether it’s working with TfL and ensuring that utility companies speed up their road-work, or it’s easing congestion on key strategic roads, like the M25, through innovations such as hard shoulder running and managed motorway technology.
Then there’s the Tube upgrade programme - work that will deliver a 30% increase in the capacity of the Tube network.
West London is already starting to see the benefits; the entire fleet has been replaced on the Metropolitan Line, with 58 new longer, air-conditioned trains, with the same to follow on the Hammersmith and City Line.
Also in west London, Royal Oak has seen the first two Crossrail Tunnel boring machines begin their journey under the city.
When completed, Crossrail will deliver faster journey times and a 10% uplift in capacity.
It will bring an additional 1.5 million people within 45 minutes of London’s business centres.
And it will support employment growth of up to 30,000 jobs by 2026 in central London.
The Crossrail scheme as planned will deliver 8 new underground stations in the central section.
27 upgraded and reconstructed surface stations.
And up to 14,000 jobs during the peak construction period in 2014.
By 2026, we estimate it will carry 200 million passengers each year.
The impact will be felt all the way along its route, not just in central London.
Crossrail is already having an impact on investment decisions, supporting and accelerating new development.
This includes thousands of new homes, and millions of square metres of commercial office space within one kilometre of stations along the route.
Recent research has estimated that residential capital values immediately around stations could increase by 25% in central London and by 20% in the suburbs.
But despite all the planned investment in the tube and Crossrail, demand forecasts show that, without additional investment, crowding will return to unacceptable levels by 2030.
So thinking is needed now about how to address this challenge.
One option championed by many in the business community is Crossrail 2.
Something I know TfL are studying closely…and I look forward to reading their analysis when it’s completed.
Then there are TfL’s proposals to extend the Northern Line from Kennington to Battersea.
This is an extension that would improve transport links and support the transformation of Nine Elms and Vauxhall, a designated regeneration area on the South Bank.
Up to 25,000 jobs and 16,000 new homes could be created and journey times from Nine Elms or Battersea to the West End or the city would, in some cases, be less than 15 minutes.
Rail capacity will also get a major boost from HS2, our national high speed rail network.
HS2 has the potential to transform the entire country’s social and economic geography.
But think about the potential positives for London:
- better connectivity and faster journeys between economy of London and the south east and the economies of the Midlands and the north
- our major cities brought closer to the capital and closer to the cities of Europe
- new opportunities, new markets and new customers for London’s businesses
This is a project that makes sense for Britain and London, which is why this government is giving it our full on, flat out backing.
Future sources of funding
As this audience will know, government grant funding for TfL - currently over £3bn a year - provides an important source of funding.
But in a world of constrained public sector resources we need to encourage other sources of investment too.
So we’re working with Treasury colleagues to accelerate major infrastructure investment, looking at new ways to unlock new sources of capital, from international sovereign wealth funds to UK pension funds.
And we also want to enable the Mayor and TfL and London boroughs to share in the profits of London’s growth, giving them an even greater incentive to invest in business-friendly measures, a positive spiral for London.
Reforms to local government finance will see part of TfL’s funding come from business rates in the capital, rather than traditional grant from central government.
This Business Rates Retention scheme, due to start in April 2013, will see London and other local authorities retain a share of the growth in business rates.
This is positive news for London.
It’s also a real incentive for the GLA, the Mayor and the boroughs to work with business to grow jobs and to grow prosperity.
Removing barriers to investment
This government understands that a modern economy needs a modern transport system.
So, for us, the DfT is as much a department for growth as it is as a Department for Transport.
But we also recognise that, to get Britain moving you need to do more than invest in infrastructure and regeneration.
You also have to knock down the barriers that get in the way of growth and development.
So, we’re also reforming our employment laws.
We’re modernising our planning regulations.
And we’re cutting corporation tax and getting rid of unnecessary regulations.
In other words, we’re freeing up our risk takers and wealth creators by giving business the room to grow and the conditions to invest.
I’ve argued that, in large part, the prosperity of our capital and our country depends on the quality of our transport networks.
And I’ve set out some of the key steps we’re taking to modernise those vital networks.
Now, when we came to office, faced with the state of the national finances we could have taken the easy option.
We could have adopted a slash and burn approach to transport investment.
After all, it’s what governments have done in the past when the fiscal going got tough.
But just like the people in this audience we understand that there’s a heavy price to pay when transport networks are clogged up, stretched to breaking point or past their best.
And, just like, you we know that cost is measured in lower growth and fewer jobs, now and in the future.
So, if there’s just one message I’d like you to take away with you today, it is this - we have called time on worn out and run down transport infrastructure.
A government that’s driving through programmes and projects, investments and innovations that will transform our transport links and our economic prospects.
A government that is engaging in constructive partnership with the dynamic potential of the private sector, as well as building on the strengths of the public sector.
Coming together to make a real and last difference.
Working together to keep London and Britain moving.