Blog Post

A window of opportunity for road user charging

Back in March the government announced the postponement of London’s forthcoming mayoral election by a year, to next May. An acute London observer recently suggested to me that this has had unhappy consequences. 

If the capital now had a newly elected Mayor, the government would have little choice but to make the best of it, even if, as seemed very likely, Labour’s Sadiq Khan had been the victorAs it is, the looming elections are probably aggravating already difficult relations between City Hall and Whitehall, when, in the midst of a crisis, we need these working very closely together.  

But there could be a silver lining. Last year Centre for London published a report that set out the case for replacing the Congestion Charge, Ultra Low Emission Zone (ULEZ) and the various other tolls and charges popping up across the city, with a new panLondon system of road pricing. Unlike existing schemes, which charge a flat amount on any vehicle that crosses a cordon, this new system would charge drivers according to distance travelled and contribution to congestion and pollutionCreating whole city system is perfectly practical given modern smart device technology and the result would be fairer, greener and smarter than current approaches.

The report was well received. Indeed, road pricing now has widespread support among environmentalists, businesses groups and economists – even the AA backs a ‘Road Miles’ versionThe eventual introduction of a national scheme, moreover, has become almost inevitable: the growth in fuel efficiency and the switch to electric cars will lead to a dramatic decline in fuel duty income to the Treasury, which can only really be filled by some form of distance based road user charging.

Despite this, the Mayor and most of the mayoral candidates (with the exception of the Green’s Sian Berry) have been wary of committing to going for road user charging. Sadiq Khan has already committed himself to extending the ULEZ to the North and South Circular next year. Having made that pledge, it is hard to see how he could also undertake introducing a panLondon system, which would quickly supersede the ULEZ cordonShaun Bailey, the Conservative candidate, is presenting himself as a friend of the motorist and is against the extension of the ULEZ, let alone a pan-London system.

But the pandemic and the deferral of the mayoral election have suddenly opened up a window of opportunity. Lockdown has forced the Mayor to institute a ‘public transport as last resort’ policy, resulting in a dramatic collapse of Transport for London’s (TfL) fare income and this is likely to last for some time. Even if and when lockdown is fully lifted, the need to maintain physical distancing will mean that limits on passenger numbers will have to be maintained. According to TfL, under the twometer distancing rule, tube trains can only carry 15 per cent and buses 25 per cent of their usual capacity.  

All this has blown a huge hole in TfL’s finances. The government has provided the Mayor with a £1.5 billion bailout, with restrictionsbut this will only tide TfL over until SeptemberLondon’s public transport system has been unusually reliant on fare income and there is wide agreement that London needs a better way of funding public transport. Indeed, according to Alex Williams, Director of City Planning at TfL, who spoke at a recent Centre for London webinarnational government has asked the Mayor to develop proposals as a bailout condition. Road user charging is one obvious way forward. 

The crisis, moreover, might well have changed not just the economics but the politics of road user charging. On the one hand, new restrictions on public transport could well lead to many of us returning to our carsmeaning that any new charges would be particularly unpopular. On the other, the pandemic has arguably given green issues a new salience. Many Londoners might be more sympathetic than they were to arguments that we need to cut congestion and pollution and create a greener and healthier city. 

How much money could a London-wide road user charging system raise for TfL and what impact would it have on congestion, pollution and carbon emissions? The answer of course, depends on the design of the system and the level at which charges are set. Our report envisaged a system of dynamic charging that would vary depending on road conditions and alternative options: one that would charge little or nothing for journeys on uncongested routes in outer London, but more for trips at busy times on busy roads, especially in inner London 

An illustrative London-wide charge of 10p per kilometre could raise as much as £3 billion per year gross – perhaps more if restrictions on public transport led to a big rise in car use. This is roughly the level of budget shortfall TfL are anticipating for 2020/21. 

I’d be surprised if Sadiq had not already asked TfL to develop options for an extended, distancebased road user charging scheme as a more comprehensive alternative to the Congestion Charge and ULEZ.  Let’s hope it makes it into his and other mayoral manifestos. And let’s hope that government does not let political rivalries get in the way, and supports it. Cities across the world are struggling to find new sources of income, manage congestion, improve air quality and decarbonise their transport systems. If London leads, others are bound to follow.    


Ben Rogers is Founding Director of Centre for London. Follow him on Twitter. Read more from him here