Firms will pay for Crossrail and so must Government, says Mayor

There are fears that an incoming Conservative government would be unable to bankroll its £5billion share of the £16billion scheme due to the dire state of the public finances.

Today, as he announced that 41,000 firms across London would pay a City Hall levy on their business rates from next April to help fund Crossrail, Mr Johnson made clear he expected similar commitment from Mr Cameron.

A source close to the Mayor said: "We are stepping up to the plate to meet the part of the package that we have control over. We expect everyone else to do the same. There must be no backtracking on Crossrail. Any cutting Crossrail or scaling it back would be economic madness and completely self-defeating."

Crossrail, which will link Heathrow with the City and Canary Wharf and extend from Berkshire to Essex and Kent, is being funded by the Government, the Mayor and via premium-rate fares. It is due to open in 2017.

The Mayor has to raise £4.1billion from a supplementary business rate, which will add two per cent to the "rateable values" of companies across all 33 London boroughs.

The charge will remain in place for 24 to 30 years. A typical medium-sized business with a rateable value of £100,000 would pay an extra £2,000 a year. A firm at the minimum rateable value threshold of £50,000 would pay an extra £1,000 a year. City Hall experts say that 70 per cent of the businesses hit by the levy will be based in a borough with a Crossrail station. Some organisations, such as charities, will be exempt.

Mr Johnson said he was determined to press ahead with raising cash for Crossrail despite the recession. "Despite the economic climate it is essential we do not allow our investment in the future to falter," he said.

London's business community strongly supports Crossrail. However, some firms - in particular retailers - fear that a simultaneous revaluation of business rates will create a "double whammy" of higher bills when this also comes into effect on 1 April.

The British Retail Consortium complained London businesses had been denied a vote on the levy. Spokesman Tom Ironside said: "While we view the Crossrail project as a much-needed improvement, we are concerned retailers will disproportionately contribute far more than they will benefit. Crossrail won't be up until 2017 at the earliest. We estimate our members will pay £250million before they see any benefit from it."

The Conservatives have promised only a real-terms increase in health spending, and to raise international aid to 0.7 per cent of GDP by 2013. All other spending, including Crossrail, will be assessed for value for money.