London is expecting to miss out in the Spending Review tomorrow (Alamy)

5 min read10 June

Two MPs representing seats in London told PoliticsHome that it would be “shocking” and a “major blow” if reported spending decisions relating to the capital come to pass. 

Chancellor Rachel Reeves will deliver her Spending Review to the House of Commons on Wednesday afternoon. It is seen as a major moment for the Labour government, as it will provide a clear sense of its priorities between now and the next general election. 

In the run-up to her statement, however, allies of the Mayor of London, Sadiq Khan, have warned that the government is preparing to reject City Hall’s main asks for the capital, in what they warn would undermine the government’s growth agenda. 

Khan wants government financial support to fund extensions to the Bakerloo Line and Docklands Light Railway. The Mayor is also pushing for greater funding for the Metropolitan Police, as well as powers to introduce a tourist tax to the capital. 

There are also concerns in City Hall that the capital will also lose money for the UK Shared Prosperity Fund, Growth Hub Funding and the Levelling-Up Fund, which aim to support local economic growth and tackle poverty.

Labour MP for Battersea, Marsha de Cordova, warned ministers against adopting an “anti-London approach”.

“If some of these briefings are correct and London doesn’t get any money from the Spending Review, it would be shocking, frankly… A Labour mayor of our capital city should not be left without the investment that we need.”

The London MP was keen to stress, however, that this does not mean the capital should have all the investment, but it can be part of the solution.

Labour MPs representing the North of England argue that parts of the country like their own are in much greater need of investment in transport and infrastructure.

“I don’t think any London politicians are in any position to whinge or complain when you look at the state of infrastructure in the rest of the country,” said a Labour MP in the northeast.

“It is like people complaining they are not getting another tube line extension when people in my constituency lose their jobs because of buses breaking down…

“A real fear for MPs in the Midlands and the North is that the Treasury Green Book always says invest in places already economically overheating because you get a faster return on your money.”

The Labour MP told PoliticsHome that political decisions made need to be balanced, “otherwise the economic disparities driving Reform UK will get worse and worse”.

Responding to suggestions that London MPs should not complain, de Cordova said: “I am certainly not whingeing, I want London to be prosperous and I want it to be safe.”

She was backed by Florence Eshalomi, Labour MP for Vauxhall and Camberwell Green, who told PoliticsHome: “Obviously it’s all still speculation, but if the reports are correct, it would be a major blow and it would be quite worrying.”

She added: “It’s not just about the infrastructure, but what comes with that infrastructure.”

Eshalomi said that the projects under discussion would support the construction of tens of thousands of new homes, adding that if those projects are not forthcoming, London would struggle to “make a serious dent in addressing the housing crisis”.

“This isn’t about London whingeing, it’s about recognising the challenges that London faces.”

Another Labour MP in London expressed concern that the government risked being complacent about the party’s political strength in the capital. 

“We all worked hard to get our seats,” they said.

“I don’t want people to feel like London is this safe city [for Labour]. Our biggest attack comes from the left… We shouldn’t be saying Reform is the only threat to Labour. The threat comes from both sides.”

Asked on Tuesday about concerns coming from City Hall, Prime Minister Keir Starmer’s Official Spokesperson said: “We’re committed to driving growth across the country, including in London, as part of the Plan For Change.

“We have already increased the budget available to the Greater London Authority for this year, and as you know, we have been pressing ahead with plans to devolve more powers to mayors, including London, and delivering integrated settlements so that mayors have got the power to unleash growth we want to see in their areas.”

The spokesperson added that they wouldn’t get into private conversations when asked by PoliticsHome when the Prime Minister had last spoken to the London mayor.

James Asser, the Labour MP for West Ham and Beckton, however, said that he was “ optimistic” about what Wednesday’s announcements would mean for London.

“Having spoken to the Chancellor’s team as part of these discussions, I think they get the importance of the Thames estuary, I think they get the importance of growth in the area.”

Asked if there was a danger that the government would lose sight of London’s importance as it tries to court Reform voters outside the capital, Asser said: “No, that’s not the impression I’ve got at all. I think they understand the importance [of investing in London]”.

One source close to a Labour mayor elsewhere in the country said that they understood City Hall’s frustration, but London had “always had special treatment”. 

“Transport for London and London have always been treated differently from the rest of the country,” they said.

Another figure source close to a different Labour mayor said: “Every mayor is going to fight for their region. Sadiq can stand up for his region, but there is only so much money to go around…We’re not after more money, we’re after more policy levers.”