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Crossrail Line: Finance

Volume 494: debated on Wednesday 17 June 2009

To ask the Minister of State, Department for Transport, what estimate he has made of the sum which the London supplementary business rate for Crossrail will raise in gross revenue in each year of its operation; and what percentage of the cost of the project this contribution represents. (279903)

The funding package for Crossrail announced by the Prime Minister in October 2007 reflects a contribution of £4.1 billion in relation to the Business Rate Supplement, £3.5 billion of which will be borrowed by the Mayor of London against the revenues to be raised from a business rate supplement in the future and the remaining estimated £600 million being business rate supplement revenues to be contributed directly to the project during the period of construction.

The Crossrail Sponsors Agreement (signed by Transport for London and the Department for Transport in December 2008) includes a forecast profile of the year on year amounts to be raised by the Mayor through the Crossrail business rate supplement to support his contribution to the project. However, the forecast profile was not published in the redacted form of the Sponsors Agreement laid in the Library of the House last December. This was due to the commercial sensitivities around the year on year funding detail of the project as a whole, with the majority of contracts still to be let and with agreements to be reached with lenders.

It is for the Mayor to determine his approach to raising a business rate supplement for Crossrail, within the framework to be set out by legislation, and to determine the gross revenue to be raised in each year of its operation. Under schedule 1 of the Business Rate Supplements Bill, which is currently being considered by Parliament, the Mayor will be required to set out a wide range of information in a prospectus to be used as the basis for consulting on the proposal to levy a business rate supplement. This information will include project costs and estimates of the amount of money the Mayor expects to raise from the business rate supplement year on year.