Mayor of London Sadiq Khan looks for ways to raise extra £500 million a year amid Transport for London’s financial woes
A new £3.50 daily charge for non-residents driving into Greater London is being considered by the city’s mayor.
Following severe financial difficulties at Transport for London (TfL) – not helped by the loss of tube fares during the Covid-19 pandemic – and an independent financial review, Sadiq Khan has argued that the £500 million annual Vehicle Excise Duty revenue from Londoners’ cars should be paid to TfL rather than the Treasury.
- London Congestion Charge: what is it, which cars pay and which are exempt?
If this doesn’t happen, the Mayor of London instead wants to implement a ‘Greater London Boundary Charge’ that would see non-Londoners have to pay £3.50 a day to drive in to most of the area inside the M25. The charge would be in addition to the Congestion Charge and the ULEZ fee, which cover a far smaller area of the capital – though the latter is set to expand in 2021.
TfL officials are conducting a feasibility study into the charge, which would raise an estimated £500 million a year and would also reduce road traffic in the capital by 10 to 15 per cent, if it were introduced.
All income from the charge would be reinvested in London’s transport network via TfL. As well raising revenue, though, the proposed £3.50 fee could encourage people to use alternative forms of transport other than the car, thereby reducing emissions.
Addressing the proposals, Sadiq Khan said: “Londoners pay £500m worth of Vehicle Excise Duty every year, which is then spent on maintaining roads outside the capital. It is not fair on London that our drivers should subsidise the rest of the country’s roads and get nothing in return. The Government must allow London to retain its share of VED and to support the capital’s transport system properly as in other world cities.”
He added: “If ministers aren’t prepared to play fair, then we will need to consider other options to address this unfairness, such as asking people who live outside London and make journeys into Greater London by car to pay a modest charge, which would be reinvested in London’s transport network. As the independent review shows, we can’t go on expecting public transport fare-payers to subsidise the costs of road maintenance.”
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