A Greater London boundary charge could be introduced to fund Transport for London (TfL), if the capital is not allowed to keep the £500m Vehicle Excise Duty (VED) raised in the city each year.
The mayor of London, Sadiq Khan has called on the government to allow the capital to keep the VED charged to London-based drivers to fund the city’s transport network.
Khan has asked ministers to “play fair” following TfL’s fares income collapsed as a result of the coronavirus pandemic.
The mayor said despite £500m raised annually from VED collected from drivers who live in London, the funds are spent outside the capital. He added that TfL are left to fund maintenance of major roads in Greater London from its fare-dominated income.
Khan added that unless London is allowed to keep the VED fund, other ways of raising money to overcome TfL’s financial challenges would need to be considered.
TfL officials have therefore been asked to investigate the feasibility of a new Greater London Boundary Charge. This would see non-residents, with vehicles registered outside of London, charged to drive into the capital.
Khan said a small charge of this nature would manage congestion, reduce emissions and encouraging more use of sustainable modes of transport. Income from the charge would also be reinvested in the capital’s transport network.
Andrew Neather, strategic communications lead, air quality at Transport for London, said: “TfL’s feasibility study will need to establish whether such a scheme would be effective in delivering key existing policy objectives at the same time as providing essential income for London’s transport network.
“Initial estimates suggest a scheme like the Greater London Boundary Charge for non-residents, if levied at £3.50 a day and applying only to non-Londoners, could reduce the total number of weekday car trips across the GLA boundary by 10 – 15% and raise around £500 million a year.”
Neather also added that the worst polluters could be charged more, to encourage those who need to drive into the capital to do so in the cleanest vehicles.
According to figures from TfL, 1.3 million vehicles travel into the capital from outside London every weekday. It said this highlights that drivers from outside London greatly benefit from using the capital’s roads without contributing to their upkeep.
Khan said: “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.”
