Rachel Reeves is preparing to announce funding for an extension of the Docklands Light Railway (DLR) in a bid to secure thousands of new homes.
A Treasury source said the Chancellor is expected to back the extension of the DLR to Thamesmead, in south-east London, as part of next week’s Budget.
The area has long been without public transport, which has been blamed for preventing the redevelopment of a riverside site that could include thousands of new homes.
The Treasury source said: “This Budget will choose growth over austerity by supporting renewal in every part of the country.
“Extending the DLR to Thamesmead will deliver much-needed new homes, new jobs, and quicker commutes – the building blocks for boosting growth, putting more pounds in pockets.”
Extending the line to Thamesmead is expected to cost around £1.7 billion and has been backed by London Mayor Sir Sadiq Khan.
The plan would see the line extended from Gallions Reach, near London City Airport, and include a new station at Beckton as well as in Thamesmead itself.
Journeys from Thamesmead into the City of London currently take around an hour while travelling to Stratford takes between 45 and 55 minutes.
The new line could see journeys into London cut to between 35 and 40 minutes while Stratford would be accessible within 30 minutes.
It is also expected to unlock land for 25,000 new homes and up to 10,000 new jobs, along with almost £18 billion of private investment in the area.
Sir Sadiq said: “I’m really pleased that the Government is backing the DLR extension to Thamesmead – something I’ve long called for alongside London’s businesses and communities.
“The project is a win-win and a massive vote of confidence in London.
“It will not only transform travel in a historically under-served part of the capital but also unlock thousands of new jobs and homes, boosting the economy not just locally but nationally.”
Meanwhile, the Chancellor continues to face questions about her plans for taxation as Budget day nears.
Ms Reeves is reported to have U-turned on plans for a manifesto-breaking increase in the rate of income tax.
But on Wednesday, Sir Keir Starmer refused to rule out freezing income tax thresholds.
The Chancellor is also reported to have told loyalist MPs she is considering an increase in property taxes on the most valuable homes.
And at least 30 Labour backbenchers have demanded a wealth tax, with Socialist Campaign Group secretary Richard Burgon saying it would be “a fairer and more popular alternative to any stealth taxes on ordinary people”.
