Mayor may sell Tube bonds
Commuters may soon be able to buy bonds from as little as £10 to help fund improvements in Tube and other major transport schemes for the capital.
The Treasury is today reported to be considering a major U-turn in the way it allows money to be raised for large-scale projects, including the £1billion East London line extension, Thameslink 2000 and tram links.
This would allow Mayor Ken Livingstone to raise billions by issuing his own bonds both to the public and to private institutions.
Mr Livingstone admits it would be an "incredible step" if this happened, but confirmed talks have been taking place with the Treasury.
He said: "We have explored with them how far we can go. We would be looking at bonds for a whole range of projects.
"What I want is bonds that are not just available in blocks of £100,000, but also £10 and £20 so ordinary people can make an investment in the city. It would be a big step forward."
Allowing the Mayor to raise finances via public bonds has always been fiercely fought by the Treasury on the grounds that it would lose control over spending.
If granted for London's mayor, other authorities across the UK would submit similar claims to be allowed to raise their own finances.
A bond issue would also prove another personal victory for Mr Livingstone - coming on top of his re-admission-to the Labour Party - over both the Prime Minister and Gordon Brown.
He was continually prevented from raising bonds to finance the ailing Tube network and lost a High Court battle. Instead, the Government insisted on pressing ahead with its part-privatisation of the Tube hiving off large sections to the private sector for the next 30 years.
Although the Public Private Partnership contracts are now set in stone the Mayor could use additional money to bring forwa rd much ne e de d improvements to the Tube, such as new trains, more frequent services and much improved stations.
Mr Livingstone - who once called for the Chancellor to be sacked because of his handling of the economy - maintained that sufficient money could be raised by a bond issue to finance large-scale improvements to the ailing network.
Now, however, the government is said to be considering whether the Mayor should be permitted to issue bonds for future transport projects.
This would allow ministers, in the run up to the general election, to claim they had given the go-ahead to raise resources for major new transport improvements for London,without having actually provided any money.
