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London considering charge on non-resident drivers

Car owners from outside London could be charged for driving on the streets of the capital under new plans being considered by its mayor.

Under the proposals, non-residents drivers could be charged up to £3.50 a day to use the city’s roads. London mayor Sadiq Khan says the scheme is being considered to make up for Transport for London’s (TfL) funding shortfall and because of what he sees as the inequitable distribution of Vehicle Excise Duty (VED) levied on motorists in the city.

According to Khan, London authorities should be allowed to keep £500 million in VED raised on motorists each year in order to finance the future funding of the capital’s transport network and roads infrastructure. Khan said this money is currently spent “almost exclusively outside the capital”, leaving TfL to pay for major road maintenance from its budget, which is largely funded by public transport fares.

The mayor’s office has instructed TfL to investigate the feasibility of a new Greater London Boundary Charge, which would be levied on vehicles registered outside of London that are driven into the city. TfL data shows that 1.3 million daily vehicle trips are made from outside London into the city, which means those drivers are benefiting from maintenance on London roads without contributing to their upkeep. 

A £3.50 charge levied on cars travelling into the Greater London Authority boundary on weekdays could raise around £500m a year, according to TfL, and would also cut the total number of trips by 10-15%, which would reduce pollution levels in London. The mayor’s office added that higher-polluting vehicles could be charged more, to encourage the uptake of low-emission vehicles and cut pollution.

Motorists in London are already subject to a congestion charge, along with a charge for high-polluting vehicles. 

The mayor of London has the authority to introduce road charging schemes but says a public consultation and economic, environmental and equality impact assessments would be required before any change would be introduced. It would take at least two years for any scheme to be implemented.

Khan said: “Ministers have failed to play fair by Londoners when it comes to financing our world-renowned transport system. It is high time they did so.

“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.”

There has been a long-running dispute between the mayor and the UK government over funding for the capital and, in particular, TfL which has been heightened by the sharp fall in income from fares due to reduced passenger numbers during the Covid-19 pandemic.

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