The extension of the Northern Line - how will the Monopoly board cope?

South London gets its tube stations.


North Londoners often joke that if south London is so great, why aren't there more Tube stations there? A proposed new extension of the Northern Line aims to redress the balance somewhat, with a new branch extending from Kennington to new stations at Nine Elms and Battersea.

As well as literally branching out into new territory, the £1bn project is also drawing attention for the unique financial scheme that will pay for it if it goes ahead. In a first for an infrastructure project in England, an innovative funding package has been agreed under which the Greater London Authority will borrow the cost of development from the Public Works Loan Board. The government will guarantee the repayment to minimise borrowing costs.

The loan will be repaid by revenue raised from local regeneration projects that will benefit from the new transport links. The two sources will be contributions by local developers collected by the Lambeth and Wandsworth local authorities; and the growth in business rates revue from a new Enterprise Zone planned for Nine Elms, which will stay in operation for at least 25 years.

Enterprise Zones usually offer incoming businesses a discount on their rates bills to stimulate growth and investment. Under this proposal, it would be used purely as a mechanism to fund the Northern Line extension.

Final details of the financing package now need to be agreed by Wandsworth Council, Lambeth Council and Transport for London (TfL), working with the Mayor of London's Office, for inclusion in an application that TfL plans to submit under the Transport and Works Act by the end of April 2013.

Leader of Wandsworth Council, Ravi Govindia, said: "This project could represent a major breakthrough in the way we pay for vital infrastructure projects in this country. We plan to use an enterprise zone as a funding tool for a major transport upgrade, which in turn, will create new growth, new jobs and even greater tax receipts in the future.

"Over the long term the scheme would pay for itself while delivering a major economic and inward investment stimulus for London. It would give Battersea its first underground station and help bring an underused part of the Thames riverside back to life.

Although businesses attracted to the area will not benefit from the usual rates discount, the local economy stands to receive a boost from the creation of as many as 25,000 new jobs and the building of 16,000 new homes across the Nine Elms on the South Bank regeneration area.

The proposals have received a healthy thumbs-up from local residents, with around three quarters of people responding to a third public consultation on the new Tube link with positive or neutral comments.

Michèle Dix, managing director of Planning for TfL, said: "This third public consultation very much confirms that there is very strong support for this transport link. These two new Tube stations at Battersea and Nine Elms will create access to the London Underground for thousands of people, as well as cutting journey times from this part of London to the West End and the City to around 15 minutes."

TfL also says it would reduce pressure on Vauxhall station, offer relief to the existing Northern Line south of Kennington and provide wider access to leisure and employment opportunities for local people.

Having lobbied in his own inimitable style for the Northern Line extension, the Mayor of London Boris Johnson has welcomed the progress made to date on the funding scheme.

"I am delighted that after months of intensive discussions and hard work we have got the go ahead from government on financing an extension to the Northern Line, which is hugely significant as Nine Elms is one of the areas with the greatest prospect for new development in the whole of the capital," he said.

"It will be an incredible confidence boost for developers preparing to invest there and it will also be a considerable boost for local people who will benefit from the new Tube link."

As officials from the Mayor's Office and TfL finalise arrangements for financing of the extension with the government, a consultation is also underway for the extension itself, which must be carried out before the Transport and Works Act Order is submitted.

If planning approval is obtained from the government and a funding package is in place, construction on the Northern Line extension could begin in 2015, with the two new stations opening as early as 2020.

The go-ahead on a financing plan is the latest in a series of milestones the wider regeneration programme has achieved in the last year. Significantly, a new buyer has been confirmed for the iconic Battersea Power Station site where 3,400 new homes, a new office quarter, a retail centre, new hotels and an entertainment district will be built.

Once that is finalised, it only remains for the designers of the Tube map and the Monopoly board to squeeze in the new look Northern Line.

This article first appeared here

Tube goes south. Photograph: Getty Images

Berenice Baker is Defence Editor at Strategic Defence Intelligence.

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.