There are a number of big projects being mooted to improve life in London. Crossrail, a new train line linking Heathrow Airport with Central and East London, has already been approved and is set to cost £16bn. The proposed route for the long-awaited Chelsea-Hackney underground line was safeguarded again earlier this year. And Boris Johnson is said to be very keen on building a new (privately-financed) international airport in the Thames Estuary. Better transport, it is argued, would bring economic benefits to London.

A number of other ideas were mentioned in a Sunday Times article last week. One was a tree-lined pedestrian boulevard running from Primrose Hill to Embankment via Oxford Circus and Trafalgar, which would be modelled on Barcelona's Las Ramblas. Another was sinking the road between Blackfriars and Westminster bridges into an underground tunnel, and turning Victoria Embankment into a new park. And then there are plans to raise London's 'hidden rivers' to give a bit of respite from all the concrete and tarmac. The rationale here is that London must improve the 'quality of life' it offers in order to compete with other global cities.

As a Londoner, all of that sounds wonderful. But as a taxpayer (and a libertarian one at that) I'm rather more ambivalent about such 'public works', not least because they invariably go over-budget. On the other hand, if the government really must take so much of my money, I'd rather they spent on things like this than give it to the work-shy or waste it on questionable wars.

But government should remember what Adam Smith himself said about public works. Although some things may require tax funding, he said, at least part of the cost should be recovered by tolls on those who use them. Likewise, if the benefits are local and a toll is not practical, then a local tax is best, rather than one on the whole nation.