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Congestion Charge: What Is The Consensus?

Apr 8, 2008
Congestion charge is not a very new idea. Cities such as Seoul, Kuala Lumpur, Orange County in California and even Stockholm have been trying and testing this idea since the 1970's through to early 1980's. Economists first mooted these ideas in the 1920's. Serious research into this idea was done in the 1960's. Historically, private toll roads, funded by turnpike trusts, were common from the late 1600's until the Local Government Act 1888 passed ownership and responsibility to county and county borough councils. The idea gained currency in the 1950's when Friedman, a free market proponent, put forward the view that people should pay in proportion to their use of the highway.

In the year 2000, the government's Transport Act 2000 gave local councils powers to bring in congestion charges. Britain's first congestion charge zone began in Durham the same year, targeting motorists visiting tourism-related areas. Motorists were charged varying amounts ranging from 2 to 5 pounds depending on location. The aim was to reduce the number of cars on specific roads. The scheme reportedly cut traffic by 90%. Several councils employed the same scheme while others even introduced electronic tagging. On Monday 17 February 2003 Congestion charging started in central London, with motorists having to pay 5 pounds for travelling in the designated zone or face fines.

As expected, the scheme drew public protest. Whether one is for or against the scheme depends on what your interests are. The business community have their own view and so do the motorists. Each section of the society feels cheated in some regards. It is a very subjective debate. There has been an argument that motorists should be charged a sliding fee depending on the size and type of car they drive. The cars that have low emission are being taxed less. Some of the most taxed, owners of the gas guzzlers, have a different argument.

The argument is that a poor person's car causes just as much damage to the environment as a rich person's car. It does not matter how often or how much petrol is in the tank. A big car can make one trip whereas a smaller car can be used to make several trips thus fouling the environment more. Besides a smaller car, usually seen as better and more environment friendly, if older might be less fuel efficient and thus worse polluters.

The other contentious issue is whether this is a genuine serve charge or a disguised consumer tax. Some people have argued that the tax is not for a service of using the road to get into the cities, rather it is a tax for making access to the city centre using a motor vehicle. This thinking is the central thrust in advancing the conceptual differences between use and access. Some city dwellers argue that "Access" is not a "service." Some Londonists argue that the Government is taking away from the public their constitutional right to use the roads, an amenity for which they have already paid for through other tax regimes such as road tax.

This argument has seen the system getting challenges from the most unlikely quarters. You might have read about the the City of New York cracking down on diplomats abusing the parking rules in Manhattan near the United Nations. Through Plate Recognition, those breaching the rules by not paying were hounded down and made to pay. In London some diplomats have asked questions whether this is a form of tax. It is of concern to them because diplomats are exempt from taxes. They are arguing that they can not use alternate routes to central London, so they have no choice and at the same time, they have a right to be there and a right not to pay any taxes as well.

Well, diplomats do pay toll charges all over the world, some argue and therefore they should pay for accessing London. But then, if going to London was not a matter of duty rather than a choice, isn't this a punitive measure discouraging people from going to work by the most convenient means? The stockholders trying to define this scheme can not agree whether this is a form of access charge or form of road tax.

The question is, is this a good idea? The argument for this charge is that the revenue is used to improve the public transport infrastructure. Councils are, supposedly Ring-fencing the money raised to funds projects related to transport facilities and amenities. But the public can not easily see or differentiate projects funded from this charge from projects funded by council tax, road tax and other taxes. As the debate rages on, the bottom line is that this idea is an idea whose time has come.

The challenge to the authorities is to raise public acceptance to a reasonable level and also try to overcome the political difficulties that the local governments face in implementing the scheme.
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