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Jeremy Corbyn was hit by a backlash today after saying London and the South-East get “far too much” investment for transport projects.

Business chiefs warned the Labour leader against “setting the North against the South” on new infrastructure and starving the capital of funding for schemes seen as vital to avoid worsening rail and Tube overcrowding.

Mr Corbyn argued that there is a “huge imbalance of investment” across the country. “Far too much goes to London and the South-East in transport infrastructure. Far too little goes to the North-East, North-West and Yorkshire,” he told the BBC’s Andrew Neil.

The comments increased fears that Labour could siphon off funds earmarked for transport schemes in the capital. Will Higham, director of campaigns and communications at business group London First, said: “It is a false choice to set the North against the South on infrastructure, we need action on both to get ready for 2019 and Brexit.

“London can fund a large part of the costs of projects like Crossrail 2 itself and new transport links promise to unlock areas for housing, something Londoners urgently need.” Many of the transport projects are vital to deliver links to housing developments. Crossrail 2 is expected to support regeneration including 200,000 new homes.

Colin Stanbridge, chief executive of London Chamber of Commerce and Industry, said: “By investing in transport infrastructure in London and the South-East the whole country benefits.

“Of course we support stronger transport links in the rest of the country, but for the interest of the whole of the UK London desperately needs major projects such as Crossrail 2 and expansion at Heathrow and beyond.”

The Standard put a list of projects to Labour to ask which Mr Corbyn would axe to shift funding to other regions, or which schemes should not have gone ahead. The list included Crossrail, Crossrail 2, Tube upgrades, the Northern line extension to Battersea, Bakerloo line extension to Lewisham, DLR extension to Thamesmead from Gallions Reach, and station upgrades such as London Bridge and Waterloo.

The Labour leader’s office was also asked if Mr Corbyn would cut subsidies in London to free up money for Northern regions, and if he thought London bus and Tube fares were too low in relation to ticket prices in the North.

Mr Corbyn’s spokesman said: “Jeremy was talking in relative terms about lack of infrastructure investment outside London and the South-East. Labour will maintain investment levels in London and the South-East and has explicitly committed to Crossrail 2 in our manifesto, unlike the Conservatives.”

The aim would be to complete Crossrail 2 by 2033. Mr Corbyn, in March 2016, backed confirmation of a rail link between Liverpool and Hull before Crossrail 2. Liverpool mayor Steve Rotheram, his former Commons aide, wants political leaders to focus on “a Crossrail for the North” linking the west and east coasts.

A spokesman for Mayor Sadiq Khan said: “Labour has said it will invest in London’s infrastructure with a clear commitment to Crossrail 2.”