Policy instruments (4) - Transport Policy and Planning in Great Britain - page 244

in this case transport improvements - rather than adding to Exchequer income
generally.]
(Begg 2003)
New Labour legislated for the concept (8.7) but only on the basis that individual
local authorities took the brunt of any political flak. Significantly it was only Ken
Livingstone, characteristically operating outside the bounds of normal political
behaviour (and with the unique authority available to the London Mayor) who had
the temerity both to propose the Central London 'congestion charge' and to push
through its implementation within his first four-year term.
Strictly, the Central London scheme is not a 'congestion' charge, nor is it one which
reflects the finer points of economic theory. In essence it is remarkably similar to a
supplementary licensing scheme proposed in the 1960s - the prime difference being
that it is enforced using camera recognition of vehicle number plates rather than as an
ordinary paper licence. However the bluntness of a single daytime charge is one of the
reasons for the current scheme performing less well in economic terms than might be
expected. TfL claims a benefit-cost ratio of 1.4 although this has been disputed (LTT
419). The main problem is the high costs involved in installing and operating the
scheme which amount to around two-thirds of the estimated benefits.
The conventional wisdom is that, in heavily congested conditions, it is
economically desirable but socially unacceptable. The irony … is that a scheme
which has gained a fair degree of social acceptance is economically unsatisfactory.
(Prof Peter Mackie, quoted in LTT 419)
An important corollary is that urban schemes outside London are likely to show
even poorer economic returns and, if so, are unlikely to pass the DfT's own 'value
for money' criterion (LTT 465). They will also not possess the relatively small
charging zone compared with the area from which motorists are drawn which makes it
practicable for Central London residents to be given a 90% discount - a key factor in
gaining public acceptability.
Monitoring of the London scheme indicates that in 2005 congestion was 22% less
than in 2002. About 5% of traffic capacity has been re-allocated to improve safety,
assist pedestrians and cyclists and make greater provision for buses. In 2005/06 the
scheme also generated an income of £122m for transport investment in London (TfL
2006).
Interest is currently focused on a series of pilot studies being conducted in cities and
towns which have come about as a result of the Government's interest in a national
pricing scheme. The Road Pricing Feasibility Study commissioned by Alistair Darling
in 2003 investigated the possibility of a scheme in which central government designed
and operated a national distance charge (offset by a reduction in other motoring taxes)
with the facility for local variation to reflect congestion levels and other external costs
(DfT 2004b). Such a scheme was 'becoming' technically feasible, and 'certainly' would
be by 2015-20 based on the market-led development of in-vehicle satellite navigation
equipment. Contemporary developments with the pilot studies are reported in
section 23.3.