After fighting off plans to expand the existing congestion charge out to the North and South circular roads, there is now a suggestion that there could be a London-wide charge to drive a car.
It’s probably not a serious suggestion, but part of the political fighting going on between the Mayor and the government over funding to keep TfL running over the next couple of years.
At the moment, although TfL is responsible for the maintenance costs of the main roads in London, revenue from Vehicle Excise Duty (VED) paid by Londoner car owners goes to central government. TfL is expected to cover the road maintenance bill out of its own resources as it doesn’t receive a road specific budget.
The dispute long predates the current funding crisis at TfL and has been simmering away for several years.
The Mayor of London’s office estimates that Londoners pay around £500 million a year in vehicle excise duty – that’s out of the roughly £6 billion raised from the tax nationally. However, the “road tax”, as it’s often incorrectly described doesn’t fund roads and is just rolled into national government taxes, with road maintenance coming from general taxation.
As an aside, when cyclists are told they don’t pay to cycle on the roads, well, they do, in the same way that everyone does — via general taxation.
As the VED goes into central government’s general tax pot, the Mayor’s argument that the GLA/TfL should keep revenues paid by Londoners for London specific spending could, however, be seen by HM Treasury as a landgrab for more local tax-raising powers.
The argument does put pressure on central government though to remember that a lot of spending that is funded by the government outside London is borne entirely by Londoners within London.
It also means that at the moment, public transport passenger fares, which make up the bulk of TfL’s income are in effect covering the cost of major road maintenance within London, which does seem somewhat backwards in a more environmentally aware world.
In a move, that’s more likely to be publicity stunt than actual policy, TfL has been told by the Mayor to investigate the feasibility of a new Greater London Boundary Charge for non-residents which would apply to vehicles registered outside London which are driven into the capital.
According to the Mayor’s office, their initial estimates suggest a charge of £3.50 a day would raise, entirely by coincidence, £500 million a year – the same being paid at the moment in vehicle excise duty by Londoners.