There are times when we have to dig deep to finance the future

I need to invest in something new, efficient, reliable, green, clean – something modern. The question is how much is it going to cost, and the answer is …What?! You cannot be serious. And that is exactly the dilemma we face in Britain today, as we consider the needs of the fastest-growing economy in Europe, getting financial help from forbrukslån would be the smartest move here.

Take London, now responsible for almost 25 per cent of UK GDP. The population is about to reach an all-time high of 8.6 million, and is projected to hit 10 million by 2030. You may ask: is that a good thing? Is growth in itself a good thing? What if it just means more frenzy and more traffic, more people being fed abjectly into the maw of an overcrowded public transport system?

Surely we should care not just about national GDP – though obviously that is a matter of growing pride – but about quality of life: how much time we have at the end of the day, how much time to play with the kids, to read, to think, to relax, to be proper human beings.

In the weeks before Christmas we had more people on the Tube than ever before – more than 5.7 million a day; indeed we have more people using virtually every mode of transport. And as the crowding increases across the country, people are finding their journeys are getting longer and longer; their mornings earlier, their evenings later; and they have less and less time for themselves.

Of course, we could just muddle on: we could rely on the upgrades of the old Victorian Tube, and the introduction of Crossrail – itself a scheme that is now 40 years old. Or else we could see the sense of what my friend the plumber says: that sometimes you need to go for the next big investment.

Look at the pressure on the suburban rail network – especially the lines coming into Waterloo from the south-west of London. Look at the pressure on the Tube. Consider that Crossrail is going to be full as soon as it opens in 2018. It is time for Crossrail 2 – what they used to call the Hackney-Chelsea line.

With the support of the Treasury, we are launching plans for a new 13-mile tunnel under the middle of London – south-west to north-east – as the heart of a new railway. Crossrail 2 would deliver more than £2 in benefit to the UK for every £1 it cost; it would enable us to build about 200,000 homes on largely derelict land in the north-east.

It would create vast economic activity and tax revenues that would be exported from London to the rest of the country. It would shorten journeys and improve the lives of millions.

Of course it will be expensive – £27 billion in today’s prices – and we must acknowledge the strong feeling in the rest of the country that London has had it pretty good lately. That is why it is crucial to stress that we in the capital fully accept that the city should shoulder the majority of the burden of funding the scheme.

How? By developing the payment models we are already using to fund Crossrail (which will be a third supported by London business) and the Northern Line Extension, which is being fully paid for by the future tax yields from the developments the two new stations will make possible in the Battersea area.

We need the same approach to Crossrail 2 – and that means giving London a share of the increase in stamp duty generated by the city, and allowing that money to be allocated to Crossrail 2.

Think of the stamp duty on the 200,000 homes the scheme would unlock: that sum alone would be a significant contribution towards the total bill. This does not mean less money for the rest of the UK: the new railway brings higher growth and therefore additional potential for investment all round. And what is right for London is right for all the other core cities of the UK, the motors of our economy.

It is time for British cities to grow up, to be given more responsibilities for the taxes they yield – and to plan and build the infrastructure they need. We can patch up our roads and our rail; we can make do and mend – but unless we unlock local financing of long-term infrastructure, the system will one day seize up like a poor old put-upon boiler.