Congestion charge: a failure of arithmetic

Only three more days now until yet another beloved totem of the Ken Livingstone years – the western extension zone (WEZ) of the congestion charge – sleeps with the fishes. Even by the standards of late-period Ken, this was a truly bizarre policy – a congestion charge that did not, even in the slightest, cut congestion; and a tax which gave some of London’s wealthiest people an 80% discount.

With their usual unerring feel for the London political pulse, various Ken groupie blogs are already in pre-mourning for the WEZ, which Ken has promised to reintroduce if he wins in 2012 (though they do seem finally to have realised that defending the bendy bus is a lost cause). Boris Johnson has been accused, variously, of ignoring the results of a consultation on the zone or of sacrificing £55 million of precious revenue from it to TfL, revenue which could have kept down fares.

Actually, we did have rather a large consultation on this subject – it was called the 2008 mayoral election, you may remember it – which Boris fought on an explicit pledge to “get rid of” the WEZ. And as for fares, I seem to remember that Ken put some of them up by 25% in the same year that the WEZ was introduced, without even the excuses of cuts in government subsidies, a massive investment programme to pay for, etc.

On that £55m figure, too – as so often with Team Livingstone – when you look closely, large amounts of money seem to be unaccounted for. Net revenues to TfL in the final year of the C-charge without the extension, 2006/7, were £123 million (see page 3 of this.) Net revenues in the first full year with the extension rose to only £137 million (page 8 of this.)

That is a difference of £14 million, not £55 million. Even the rise in gross revenues (that is, before costs) was only £37 million, not £55 million.  “Transport for Livingstone” put about the £55m figure back in 2008, as part of its campaign to keep the WEZ.

There’s one other thing that Boris’s opponents always forget to mention. In January, the charge in the original central zone, which continues to operate, will rise by up to a quarter – from £8 currently to £9 or £10, depending on how you pay.

TfL states (p47 of this) that this will raise between £20 million and £25 million more (though it also stands to lose some penalty revenue, because the charge is being made easier and simpler to pay.) Knowing its tendencies, that might be an underestimate.

So even if you work on the basis that drivers’ money belongs to TfL rather than to them, the actual revenue impact of Boris’s changes to the congestion charge on the London coffers will be broadly neutral, or even slightly positive.

One thought on “Congestion charge: a failure of arithmetic”

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