The 28 October Budget names the Bakerloo line extension as a scheme a new London business rates levy could help pay for. It does not fund or approve it.

The Bakerloo line extension to Lewisham is named in the government’s Budget for the first time in years. But it is not funded, and it is not approved. The Budget names it only as one scheme that a future London business rates levy could help to pay for.

That levy does not exist yet. It needs new legislation first, and it would have to pass a ballot of London businesses.

What the Budget actually says

The extension appears once in the Budget 2026 document, published on 28 October. Paragraph 4.93 lists the government’s plans for London. One of them is:

“Legislating to enable the Mayor of London to establish a successor to the Elizabeth Line Business Rates Supplement (BRS), which is scheduled to end by 2041. The successor BRS will have ballot requirements no more restrictive than those enacted in 2009, and, alongside the wider fiscal devolution package, will help the GLA to finance future transport infrastructure projects such as West London Orbital and the Bakerloo Line Extension.”

The business rates supplement is an extra charge on London business rates that has helped pay for the Elizabeth line. The Budget’s plan is to let the Mayor replace it with a new one when it ends.

The Budget’s list of London transport measures the government is confirming, in paragraph 6.64, does not include the Bakerloo line. It names a business rates zone at Euston and work on international trains at Stratford.

The wider changes London gets

The Budget points to a separate Fiscal Devolution Roadmap, also published on 28 October. For mayors across England it sets out (Budget, paragraph 4.60):

  • a share of income tax for every mayor from 2028
  • mayors keeping a 20% share of locally retained business rates from next year
  • local and regional government keeping all business rates income by the end of the decade
  • plans for a power to charge an overnight visitor levy

The roadmap says London may need “a bespoke approach” from 2028-29, to be worked out with the Greater London Authority and the boroughs. It does not mention the Bakerloo line.

What the Mayor said

Sadiq Khan welcomed the Budget the same day. His statement said:

“By giving London the ability to keep more of the money we raise, we can invest billions of pounds more in our future, helping to finally unlock transformational infrastructure projects such as the West London Orbital, the Bakerloo Line Extension and the Euston knowledge quarter project, supporting tens of thousands of new homes, jobs and economic growth.”

He called the Budget “a new devolution revolution”. He did not say the extension was funded.

Where the extension stands

Transport for London’s own page on the scheme describes it as an extension from Elephant and Castle to Lewisham, along Old Kent Road. It includes:

  • a new Bakerloo line ticket hall at Elephant and Castle
  • a new station at New Cross Gate
  • an improved interchange at Lewisham

TfL is also considering a second phase beyond Lewisham to Hayes and Beckenham Junction.

The government issued directions to safeguard the land for the route in 2021. TfL’s page notes that safeguarding “does not give powers for the extension to be built”. It also says: “A viable funding package is needed to build the Bakerloo line extension.” The page gives no cost and no timetable.

Lewisham Council’s page on the extension says the council and Southwark have campaigned for it “for a number of years”. We found no council statement on the Budget.

What it means for you

  • Nothing changes on the ground yet. No construction date, cost or route change has been announced.
  • The money route is now written down. For the first time, a Budget names a specific way London could raise money for the extension: a successor to the Elizabeth line levy on businesses.
  • There are hurdles before any spade. Parliament has to pass the law, businesses have to vote for the levy, and TfL still needs a full funding package and powers to build.

The Bakerloo line has featured in the council’s case for Lewisham town centre before, including in our report on the shopping centre redevelopment being put on hold. Travel disruption this month is on our roadworks and travel page.

Sources