NCPA - National Center for Policy Analysis

London Tolls are a Taxing Problem for Drivers

February 14, 2003

A new plan to ease traffic congestion in the city-center of London goes into effect Monday. Ken Livingstone, the mayor of London, has set a fee of about $8.10 for driving in the center of the capital on weekdays between 7 a.m. and 6:30 p.m. The aim of the plan, he says, is to ease congestion, not drive all cars from the road.

Consider the following:

  • Vehicles in central London move no faster today than horse-drawn vehicles did 100 years ago.
  • Even though only 15 per cent of city-center travel is by car, the gridlock is endured by residents, commuters and business.
  • Estimates of the economic costs -- in lost time, wasted fuel and increased vehicle operating costs -- tend to be in the range of 2 to 4 per cent of gross domestic product.

No city has attempted a scheme with anything like the size, scale and complexity of the London congestion charge:

  • About 50 million vehicle miles are traveled in the capital every day.
  • Motorists will have to pay to drive into or inside an area of roughly 10 square miles around the City (the financial district) and the West End.
  • The zone will be policed by hundreds of fixed and mobile cameras which will automatically pick up vehicles' license plates.
  • Computers will match the registrations with a database of drivers who have paid in advance. Those who have not paid by midnight will be fined about $129.66.

Livingstone hopes the scheme will cut traffic in the zone by 10-15 per cent, reduce delays by 20-30 per cent, and raise about $210,700,000 a year to invest in public transport and road schemes.

Source: Chris Giles and Juliette Jowit, "Economists agree that the best way to tackle the growing problem of overcrowded roads is to introduce tolls at peak times," Financial Times, February 13, 2003.


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