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Congestion Charging Must Go

December 1, 2003

Congestion Charging Must Go

Attending the switching on of the Regent Street Christmas lights by rock star Daniel Bedingfield, I spoke to many folk there who commented on the fact that the congestion charge was bound to keep a lot of people driving their cars into central London to see the lights.
It certainly didn’t seem so …

Congestion Charging Must Go

Attending the switching on of the Regent Street Christmas lights by rock star Daniel Bedingfield, I spoke to many folk there who commented on the fact that the congestion charge was bound to keep a lot of people driving their cars into central London to see the lights.

It certainly didn’t seem so bad that night as thousands of young people thronged the West End to get a glimpse of Daniel. Nevertheless after eight months of the tax being imposed it is now possible to draw conclusions about the current scheme as well as assessing whether there are alternative options for tackling congestion.

It is clear that inside the very small area of the zone, it is true that the charge has had an impact in reducing the number of cars. However, this is certainly not the only criteria that should be used to assess its success and it is vital to take a wider view about the general economic effect of the scheme before deciding whether it should be retained.

I have taken and reviewed evidence from a wide range of people and organisations to understand the consequences of the congestion charge scheme on all stakeholders, including drivers, businesses, residents and public transport passengers. Recently I asked all 45,000 households in my constituency to let me know whether they wanted the congestion tax expanded, abolished or kept as it is. The results of my survey from more than 500 people, the majority of which live within the congestion charging zone, were as follows:-

Expanded 29%; Abolished 45% and Kept as it is 26%

I believe it is important to understand how limited the scope of the existing scheme is: the congestion charge area covers 8 sq miles in an area with very few residents out of a total of 600 sq miles in Greater London as a whole.

So, any benefits for the zone area have to be weighed against the major investment required ? over £200 million ? which means that little has been spent anywhere else in the capital to tackle congestion. A key reason why people are now staying away from central London is not the level of the charge ? though this obviously hits hardest those on the lowest incomes ? but the sheer hassle factor in paying the charge.

In addition, there is huge confusion about the times the charge operates and the exact boundary of the charge area. That is why there has been a relatively modest reduction in the number of drivers who drive into work each day but a very significant fall in tourists, local visitors and shoppers. The congestion charge has undoubtedly led to a reduction in the number of vehicles entering the zone and has improved the speed of most bus and cycle journeys in part of the zone.

Despite the Mayor’s claims that the scheme has been a massive success there are four obvious downsides that he and his friends at Transport for London are not addressing:-

1. The most significant problem has been the sharp fall in business turnover inside the zone and around the periphery, especially among retailers and restaurateurs. There is growing evidence that the reduced number of motorists driving into the zone, especially the irregular visitors or shoppers, is having a serious effect on businesses both large and small. One of the possible downsides in the longer term is that key retail centres and streets in the West End could slowly degrade, as shops move elsewhere. This would obviously have knock-on effects on other businesses, such as theatres, cinemas and visitor attractions.

2. Second, congestion charging is simply not raising the extra revenue that was promised by the Mayor at the start of the scheme. The scheme was sold to Londoners on the promise of additional revenue for investment in public transport, raising £200 million a year. London’s public transport is desperately in need of investment and it would certainly have enhanced the appeal of the scheme if such sums were generated for use in tubes or buses. Unfortunately, the scheme has failed even to raise funds anywhere near sufficient to cover the start-up costs, let alone to fund additional transport projects ? current forecasts indicate that net revenue will be £6 million this year and £3 million next year. Using the Mayor’s own figures, the only way of increasing revenue to these levels would be to increase the congestion charge to £10, something already floated by the Mayor’s Deputy ? Jenny Jones.

3. Third, there are concerns about the effect of the scheme on social exclusion. Because of the level of the charge, the scheme has had very little impact on those who can afford to pay £5 a day but has caused significant hardship among those on low incomes as well as hitting vulnerable groups who have no choice but to drive into the zone.

4. Finally, it is difficult to conceive how the area of the scheme could be expanded beyond the current boundaries, except in the most marginal way. This is because, once the scheme is expanded, large numbers of households are included within the zone who, if able to take advantage of the 90% discount, would completely undermine the viability of the scheme. The only way to counter this problem would be for Mayor Livingstone to end the 90% resident discount ? something he has already solemnly promised not to do, not least because it would arouse the opposition of virtually every resident inside the zone. The scheme remains essentially only applicable in a very limited central area.

These four issues are extremely serious disadvantages of the current scheme and seem unlikely to improve over time. A number of commentators have suggested ways of amending the current scheme. Steve Norris’s team with his campaign to be London’s Mayor has carefully researched the results if the charge was operated only between 7am and 10am. Its findings concluded that, although there are certain attractions to this option, the reduction in income would make the scheme financially even more unviable than at present.

My conclusion is that the negative effects of the congestion scheme ? in terms of damage to business and social exclusion ? far outweigh the benefits. As such, I believe that the congestion charge scheme should be abolished. It would appear to be prudent for the Mayor to negotiate the best possible deal with the contractors to bring an end to the scheme before the economic damage to my constituency and the important economic central area of London is irreversible.