In June 2020 the London Congestion Charge (a.k.a. tax) was increased from £11.50 to £15.00 and the hours of coverage were extended. This was stated to be a temporary increase to cope with the Covid epidemic which was expected to lead to more people using private vehicles, when in fact traffic has reduced as more people worked from home.
Now the Mayor has announced more changes which are:
Phase 1 (from 20 December 2021)
The charge level will stay at £15.
The 90 per cent residents’ discount will be re-opened for all eligible residents to register for the discount.
The delayed payment charge will be £17.50 and the deadline will be extended to three days after the day of travel.
The Auto Pay and Fleet Auto Pay discount will be removed – that means an additional £1 payable for those registered with Auto Pay (a high proportion of payers).
The reimbursement arrangements that were introduced as part of the temporary changes will be retained or adapted to ensure that people most vulnerable to infection from epidemics and pandemics will continue to be protected. This will also facilitate essential trips made by NHS staff in times of exceptional or extraordinary circumstances including for commuting purposes – see https://tfl.gov.uk/modes/driving/reimbursements-of-the-congestion-charge-and-ulez-charge for details.
The ability for residents to pay by App or online for multiple consecutive charging days will be removed.
Phase 2 (from 21 February 2022)
The operating hours for the Congestion Charge will be 07:00-18:00 on weekdays and 12:00-18:00 on weekends and Bank Holidays.
There was a public consultation on the proposed changes although only 9,680 responses were received when there are 2.6 million cars registered in London. Clearly most people affected did not know about it. The consultation did not ask simple questions about whether people supported the proposals or not. Our comment that the proposals lacked any evidence base to support them were reported however.
But the consultation report (available from here: https://haveyoursay.tfl.gov.uk/congestion-charge-changes ) claims that the Congestion Charge was successful in reducing congestion which is simply not true. This is a blatant lie repeatedly made by TfL. See our analysis on this page: https://www.freedomfordrivers.org/congestion . There has been no published data on traffic journey times in recent years, for reasons you can guess, but the experience of most drivers suggests it has got worse not better.
Comment: The Congestion Charge has always been about taxing London’s motorists to raise money for the Mayor and TfL to spend money on subsidising uneconomic public transport and on their bloated empire. These changes may mean that TfL will make over £100 million more in taxation if the higher Congestion Charge is retained.
You cannot tackle traffic congestion by charging because the unsatisfied demand for private transport is so high that people will pay almost anything for it and any road space released is soon filled up by new entrants. During the pandemic that is even more the case.
Roger Lawson
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A report by traffic information supplier Inrix says London has become the most congested city in the world. Its drivers are losing an average of 148 hours per years sitting in traffic. Other UK cities with major congestion problems are Cambridge, Bristol, Exeter and Cheltenham.
Inrix’s Peter Lees blames a lot of the problem on cycle lanes which have made congestion worse. That is certainly true in London where the expenditure on cycle lanes has been very counter-productive. Low Traffic Neighbourhoods (LTNs) have also contributed in a big way to increased traffic congestion in many parts of London.
Comment: The result in London is a direct consequence of the defective Mayor’s Transport Strategy which has encouraged cycling when that remains a minority interest. Public transport has been massively subsidised while the road network has been corrupted by dogmatic policies.
The Mayor needs to learn that you cannot solve traffic congestion by taxing motorists as should be self-evident by now. Clearly a different approach is needed but the Mayor and TfL management put their heads in the sand and ignore the problems they have created.
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Both Sadiq Khan, Mayor of London, and Andy Byford, London Transport Commissioner, have warned that unless they get more money from the Government then there are going to be savage cuts in public transport and on major infrastructure projects. The latter might include the required repairs to the Rotherhithe Tunnel, the A40 Westway and A12 Gallows Corner flyover leading to their closure.
Some 100 bus routes face the axe and frequencies may be cut on 200 other routes. Other proposals are no more electric buses, no more step-free stations, no more “Healthy Streets” cycling and walking schemes and no more 20mph zones or safer junctions.
Now some readers might welcome some of those things and clearly the Mayor is trying to scare the Government into providing more funding within weeks. But some of those suggestions like closure of the Rotherhithe Tunnel and the Westway would be disastrous for the functioning of the road network in both east and west London.
How did TfL get themselves into such a mess? It all stems from the policies adopted by Ken Livingstone which was for massive subsidies to buses and commitments for large expenditure on Crossrail and other underground projects. The bus network has certainly been greatly expanded but at a cost that was never justified and Crossrail has been a financial disaster. Over budget, over schedule, and never justified on a cost/benefit basis. The Mayor was relying on income from it to cover TfL’s future budgets which it never has.
Boris Johnson never tackled the problems created by Livingstone when he was Mayor while Sadiq Khan has actually made matters worse by spending enormous amounts of money on cycle lanes, LTNs, and other schemes that have damaged the road network. He has also encouraged the growth in the population of London while the infrastructure never kept up with it despite massive central Government funding.
A report in the Express shows that £515 more per person was spent on transport schemes in London than on the North of England. A new report from the IPPR North think tank has published an independent analysis of transport spending over the past decade. Between 2009/10-2019/20, the North received just £349 per person in transport spending. In comparison, the UK as a whole received £430 per person, while London received a staggering £864 per person. Where did it all go one might ask? On pointless and generally uneconomic schemes not justified by any cost/benefit analysis is the answer.
The daft transport schemes such as the Congestion Charge and the ULEZ have actually encouraged people to move out of London and the cuts to public transport that are proposed will expedite that trend. With falling income from bus and tube fares already caused by the pandemic, the outlook is certainly bleak. But failing to maintain the infrastructure such as bridges, tunnels and flyovers while the Major prefers to spend money on other things is surely a sign of gross incompetence.
London needs a new transport plan where expenditure is matched to income and needless subsidies removed. In other words, people should pay the cost of the trips they take on public transport and free riders should be stopped. But will a socialist Mayor ever take such steps? I doubt it. So London is likely to go into further decline and more people will move out.
But London is at the heart of the UK economy so there is some justification for central Government stepping in once again to reform London’s governance. We need less populism (which generally means hand-outs to win votes) and more financial acumen in the leadership. Certainly the current arrangement where you have a virtual dictator in the role of Mayor and a toothless London Assembly is not working.
The key to improving the London transport network is not to have it all (both public and private transport) under the control of one body (TfL) which leads to lack of competition and perverse incentives. For example, encouraging cycling to relieve pressure on public transport while causing more road traffic congestion and introducing schemes such as the ULEZ to help subsidise public transport while increasing the cost of private transport.
Perhaps we need a new Dr Beeching to put the London transport network back into a cost-effective structure as he did for British Rail. But at least the Government seems to have taken some rational decisions by cancelling the eastern link of HS2 to Leeds. Just like Crossrail in London, HS2 was never justified in terms of benefits achievable and the money would have been better spent on smaller projects. But politicians love grandiose schemes. Reality seems to be finally sinking in on the national scene even if not yet in London.
Roger Lawson
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The Mayor of London has announced a number of proposed changes to the Congestion Charge (a.k.a. tax). This tax was first introduced in 2002 when the charge to enter the central London zone was set at £5. It has subsequently been increased several times with the last change being to raise it to £15 and extend the hours to most of the day and to weekends.
That change was proposed to be a temporary measure to ensure that traffic did not increase during the pandemic as people avoided public transport but was also clearly intended to help with TfL’s budget problems.
It is now proposed to make the £15 charge permanent, but to reduce the charging hours during weekdays to 0700-1800 and weekend hours to 1200-1800.
Residents’ discounts will be reinstated but the previous discount for using Autopay is not reinstated.
Comment: As is usual, the Mayor breaks a commitment that the increased charge was temporary so as to make more money. The pandemic is effectively over so there is no longer any justification for the increase. The reduction in hours may give some assistance to entertainment venues in the evening but that is a minor benefit to relatively few people in comparison with the number likely be affected by the increased tax.
The congestion charge has never proved to be effective in reducing traffic congestion and is a very expensive way of collecting more tax. Claims for its success are simply wrong.
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The “This is Money” web site have published a very good article on how the ULEZ charge is generating large amounts of tax money for the Mayor and TfL in London. It reports, based on data obtained by the AA, that the Mayor raked in £107 million in the first year of the ULEZ. See link below for the article.
We pointed out when the ULEZ charge was first proposed that this was about raising money for TfL to plug a big hole in their budgets. It was not primarily about improving the health of Londoners as claimed because any cost/benefit analysis indicates it is very poor value for money. See Reference 2 below for links to past articles.
With the ULEZ expanding in October and likely to affect another 300,000 drivers of older vehicles, the tax income raised will grow exponentially.
This is basically an attack on car drivers, particularly those who cannot afford to buy a new car, such as the elderly or poor.
Implementing the expanded ULEZ will cost £130 million in capital expenditure and by 2030 the expected benefit in reduced emissions is forecast to be zero as the vehicle fleet changes. But will the taxes ever be removed? We doubt it.
In reality the Mayor will plead poverty as he regularly does and the ULEZ and Congestion Charges will increase.
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An announcement from the Government today spells out the world’s first “greenprint” for decarbonising all modes of domestic transport by 2050.
Plans include a ban on all new “polluting” road vehicles by 2040 and net zero aviation emissions by 2050. The former includes the phasing out of all petrol and diesel HGVs by 2040 – subject to consultation. Consultation will be very important because the practicality of HGVs that need to go long distances without repeated refuelling is important economically. LGVs can probably be electrified but HGVs need to use alternative fuels.
The 2050 commitment applies to aviation emissions and a consultation on that is also launched under the “Jet Zero” banner. It is clear that new technologies and aviation fuels need to be developed to achieve a major reduction in aviation emissions. Whether such changes to reach zero emissions are achievable is not at all clear and the cost, which might be very considerable, is not given.
Similarly the costs of electrification of all rail transport is likely to be enormous as the UK lags far behind other European countries in that regard. Only about 50% of the UK rail network is currently electrified.
The Daily Telegraph has speculated on a new system of road pricing to replace the £30 billion currently raised through taxes on petrol and diesel. But the latest Government announcement leaves out any mention of how that issue is to be tackled.
As with all good political missives, the Government document contains lots of fine words about how the environment will be improved while not inhibiting us from travelling when or where we want (for example, taking holiday flights). It’s a policy statement in essence that leaves out all the detail of how this nirvana is to be achieved and at what cost. It ignores a lot of the practical difficulties. But it’s worth reading to get an impression of what might happen in the next few years.
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Our new Mayor of London, Sadiq Khan, has issued a tweet that spells out his priorities. This is what he said:
Okay—here’s the plan:
🔨 Create + protect jobs 💰 Help businesses grow 🌳 Tackle the climate crisis 🏠 Build new homes 🚓 Invest in policing 🎬 Create opportunities for young people 🏆 Celebrate diversity 💪🏽 Root out inequality ⚽ Deliver an amazing Euro2020
<END>
These are all fine words, but rather like the Government’s policies as outlined in the Queen’s Speech, rather short on detail. It also contains phrases like “celebrate diversity” that are not just meaningless, but do not lead to specific actions or budget allocations. Many people would argue that there is too much diversity in London and that leads to social incoherence, and why should the Mayor be spending time or money on celebrating it anyway? We all know that the population of London is now very diverse and we have all come to accept that. So what is there to celebrate?
One big issue is certainly the comment that he plans to “Tackle the Climate Crisis”. Is there one? If you look at many London boroughs who have introduced Low Traffic Neighbourhoods they have justified this on the basis of tackling climate change. They argue that it is important to cut emissions from vehicles when doing so will have minimal impact on the climate. Climate may be influenced by man-made emissions (although some dispute that) but cutting vehicle emissions in London will have a negligible influence. Emissions in London come from many different sources and directly relate to the population of London and their requirements for buildings, heating and transport. The Mayor’s policies imply more businesses, more buildings to accommodate them, more homes for the workers and more infrastructure to support them so this is all contradictory.
Only if the Mayor adopted a policy of reducing the population of London while providing more infrastructure – particularly in terms of transport – would the environment be improved.
New York, New York
It’s interesting to look at another major city which has similar transport problems – a heavily congested road network and a public transport system in deficit. Just like the impact of the Covid epidemic on the budgets of Transport for London, New York is facing a major problem. The Metropolitan Transportation Authority (MTA) budget (which covers the subway and some bus services and is equivalent to TfL in London) is projecting a deficit of $16 billion for the period 2020 to 2024, even after major cuts in services.
New York is planning to introduce congestion charging to cut traffic and of course generate some income for the MTA – as much as $15 billion by charging $10 to $15 dollars per day for those entering Manhattan. But the adjacent state of New Jersey, from which many people commute into New York City, is threatening retaliation. Senator Laguna and Assemblyman Tully are developing legislation that would impose tolls on non-residents driving between New Jersey and New York. Mr Tully said “We should not be used to fund the MTA”.
This is equivalent to Essex or Kent imposing a tax on Londoners who drive into their counties if Sadiq Khan imposed a toll on those who drive into London from outside the M25 – as he is proposing. This is surely a very good response to such a threat!
County Councils that border the M25 should surely be asking the Government for such legislation, or asking the Government to stop this taxation without representation.
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In June 2020 the central London Congestion Charge (a.k.a. Tax) was raised to £15 per day and made effective for 24 hours per day for 7 days per week. This was declared to be a “temporary” change to cope with the impact on TfL finances of the Covid pandemic and to discourage car use which might rise in the short term as people avoided public transport. Mayor Sadiq Khan blamed the Government for forcing him to make the change although Government Ministers said it was solely his decision.
But on the 26th April Khan said in a hustings meeting that “I will be negotiating with the Government so we don’t have to have it [the increased congestion charge] seven days a week or up until 10pm”.
But Conservative Mayoral Candidate Shaun Bailey said this to City AM in response: “Sadiq Khan is making things complicated. But the truth is very simple.
The Mayor decided to raise the Congestion Charge and the Mayor can choose to reverse it – today. The fact that he isn’t tells us everything we need to know.
Khan is trying to win votes by promising to cut the very taxes he raised. That’s like an arsonist trying to get out of jail by promising to put out the fire he started”.
Bailey went on to reiterate a pledge he made last June, saying: “As Mayor, I’ll reverse the Congestion Charge hike on day one, no consultation, no studies, no ifs, not buts. This is the fresh start that London needs.”
Comment: From my personal experience of driving into central London for hospital visits in the last few weeks, the raised congestion tax made absolutely no difference. When nobody was going to work in central London the traffic disappeared. When they returned the traffic was worse than it was before the lock-downs.
This looks like another attempt to win votes by bribing the electorate from Sadiq Khan which he has been so adept at doing in the past. But will he actually remove the “temporary” increase and extended times? His statement is ambiguous to say the least.
I suggest Shaun Bailey is more to be trusted on this than Sadiq Kahn, something to bear in mind when voting next week.
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I just received a letter from Shaun Bailey. No this is not a personal Xmas card from the Conservative Party candidate for Mayor because I think everyone in the street received a copy. It’s a note about the current Mayor’s proposals to raise the Council Tax Precept that all Londoners pay to fund his operations. This is some of what the note says:
Sadiq Khan has already raised your mayoral council tax by 20.3% since 2016. But now he’s planning to raise it even further — in order to pay for his waste at TfL.
Over the last four years, he accumulated £9.56 billion in wasteful spending at Transport for London.
£159 million on free travel for friends of TfL staff. £828 million on pension overpayments. £5.25 billion on Crossrail delays.
Now TfL is on its second bailout. And in the second bailout’s settlement letter, Sadiq Khan revealed that he’s planning to pass the cost on to Londoners with a rise in council tax.
<END>
That’s not the only way the Mayor is planning to raise taxes. He is proposing to raise as much as £500 million every year by charging anyone who drives into Greater London from outside the metropolis. He has already asked Transport for London (TfL) to look into such a plan which might involve a daily fee of £3.50 – but that could soon be raised once the tax is in place and cameras installed to pick it up.
Mr Khan argues that public transport users subsidise road maintenance in the capital as some of that expenditure comes from public transport fares. But bus users should certainly contribute to road maintenance surely?
In addition he is ignoring the fact that technically most of London’s roads are maintained by local boroughs. In fact he is simplifying the issues of where the money comes from because much of it comes from central Government.
The impact on outer London boroughs, and those who live in the wider South-East, of such a tax could be devastating. There are three groups of people who would be badly affected: 1) Those who drive into London for employment (not many do so to central London, but those who work in the outer London boroughs often do so); 2) those who drive into outer London Tube or Rail stations to park as part of their commute (“rail heading” as it is called); and 3) those who drive into outer London “town” centres such as Orpington and Bromley for shopping. Many service providers to businesses in London also visit from outside such as plumbers, accountants, etc.
Perhaps it is worth pointing out that none of these people will get a vote to decide who is Mayor of London. In effect it is taxation without representation, a good enough cause to start a revolution.
It really is time that central Government takes over the government of London and the management of its finances as Sadiq Khan has made a complete hash of it. Allowing him to tax those who live outside London but just want to visit it will cause a mass exodus of businesses and people from London. It will also be the final nail in the coffin of many High Street retail businesses in London.
The Mayor of London has already introduced the LEZ, ULEZ and central Congestion Charge (a.k.a. tax) which have been primarily driven by the Mayor’s desire to build an empire based on raising taxes from Londoners rather than reducing congestion or air pollution. The latest proposals are yet another feeble excuse for money grabbing.
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Readers are probably aware of the financial difficulties of Transport for London (TfL) and hence Sadiq Khan. The fall in income has been devastating as people have avoided public transport because of the epidemic while TFL have continued to run the same frequency of services on buses and the underground. As these services are the main sources of income to TfL while costs have remained unchanged, the result has been a ballooning operational deficit. The Mayor is now asking for billions of pounds to keep TfL afloat.
He alleges that the Conservative Government is forcing him to extend the Congestion Charge (a.k.a. Tax) as a condition for supplying more money while the Government says that is only one of several “proposals” that they are asking the Mayor to consider to put the finances back in a stable position.
The Prime Minister alleged in the Commons that TfL had been put into a state of “bankruptcy” which was “entirely the fault of the current Labour Mayor of London” due to his policy on fares. But the Mayor described the Prime Minister as lying and has defended his financial record, blaming the problems purely on the Covid-19 epidemic. It’s basically a “blame game” so beloved of politicians.
But the reality is that I wrote negatively in January (i.e. before the epidemic hit) on the subject of TfL budgets and finances (see Reference 1 below). The article included these comments:
“Despite cutting operating costs, one of the few good things reported, there will be deficits of £307m, £493m and £513m in TfL (after “capital renewals”) for this year and the two following ones and barely break-even in 2022/23. As a result, the Mayor will have to substantially increase borrowing to cover that and large amounts of capital expenditure for both Crossrail and other network improvements. That includes £2.2 billion this year and next year, followed by £1.2 billion each year in subsequent years. Total borrowing will reach £12.3 billion within 2 years” and “…..the Business Plan may be totally unrealistic. In summary the Business Plan and Budget demonstrate an incompetent Mayor and senior management at TfL who wish to get us all cycling, walking or using public transport while the road network gets worse”.
But ignoring the blame game and past history, what can the Mayor realistically do to avoid TfL becoming bankrupt? These are the main options as I see them:
Reduce services and cut staff (the major proportion of their costs) in TfL so as to match income.
Increase bus and underground fares substantially, a politically unpopular choice as the Mayor has lauded his past fare freezes.
Increase the Mayor’s precept on Council Tax, which would raise Council Tax for all Londoners. A politically unpopular choice for the Mayor as he comes up for re-election in May 2021 and local councils would blame the Mayor for the increases in Council Tax they have to impose.
Expand the Congestion Charge over a wider area, or increase the charges on that or for the ULEZ – the latter is already planned to expand to the North/South Circular in October 2021.
Expanding the Congestion Charge zone would be deeply unpopular with drivers and there are enormous numbers of people who live within the North/South Circular and drive vehicles (about 3 million people with probably 50% of households owning a car). This is what Deputy Transport Mayor Heidi Alexander said at a recent TfL meeting: “Neither the Mayor nor I can see how it would be right to charge people £15 to drive a mile from Wandsworth to Clapham, or from Catford to Lewisham from October of next year …”.
There have already been over 100,000 signatures on a petition opposing an expansion of the Congestion Charge – see http://chng.it/7zNp6sHhm8 . Please sign it!
The Mayor is therefore faced with some very tough choices, hence his approach of blaming the Government no doubt. But it is his responsibility to make the choice.
I suspect there is going to be a mixture of all the above, or some other compromise, if the Government simply refuses to hand out more cash with no view of when TfL finances will be stable. That is something it should definitely not do.
The Freedom for Drivers Foundation has of course consistently opposed the Congestion Charge, a tax under another name. It is very expensive to collect and has not reduced congestion as claimed. See this web page for an analysis of the Charge and why we still oppose it: https://www.freedomfordrivers.org/congestion
We suggest the Mayor should choose options 1 to 3 only. It is not clear to us why drivers should pay to keep public transport afloat – they already pay billions more in taxes than the cost to maintain the roads. In reality part of the problem is that transport in central London is heavily used by commuters from outside London who do not pay the realistic costs of the provision of bus and underground services. Buses for example are subsidised by almost £1 billion per year in London, which is no doubt politically popular (even Boris Johnson bottled bringing it under control when Mayor). But that is one lunacy that should surely be stopped.
TfL Budgets have been driven by political populism for many years when it is in essence a business and should be run like one. Why should TfL who obtain income from public transport also have control of the road network? The result is bias against other forms of transport. It is surely time to remove TfL from the Mayor’s control.
Griff Rhys Jones wrote a very interesting article for the Spectator recently about the dire London transport situation. One of his comments was “The most effective planet-saving reforms would be to prevent commercial ‘centres’ and to spread ‘live-work’ across the entirety of London. Instead, we are once again pursuing outmoded and outdated ‘visions’. (Or ‘fantasies’, as London-wide protests by ordinary working people are calling them.) Our capital is a success because people inhabit it”. See Reference 2 below.
The Mayor’s Transport Strategy has certainly been very defective, apart from the budget lunacy and that is one reason why London was so vulnerable to the virus.
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