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Harlow Council leader meets with Deputy Mayor of London over border tax

Business / Fri 19th Feb 2021 at 08:01am

Dear Editor

THERE has been some confusion last week amidst reports in national papers about the proposed Greater London Boundary Charge. I am pleased that London Deputy Mayor for Transport Heidi Alexander offered to shed light on this matter in a call with me this week. She assured me that there are no firm plans for a Boundary Charge, and any specific proposal would be subject to robust scrutiny and wide public consultation.

The Mayor of London has had to consider a range of very difficult options to raise funds for Transport for London (TfL). The Deputy Mayor made clear that rather than introducing a Boundary Charge, London leaders of all political parties would prefer that Government allows the capital to retain the money raised from London’s drivers through Vehicle Excise Duty (VED). As it stands, because of the way TfL is funded, public transport users in London effectively pay for road repairs and the VED that Londoners pay into Government is spent elsewhere.

An underreported part of the debate is why TfL is in this situation in the first place. That goes back to 2015, when then Chancellor George Osborne agreed with then Mayor Boris Johnson to cut the £700 million annual support grant Government used to give to TfL – meaning the network became almost completely reliant on fare revenue. When this stopped flowing because lockdown meant no one was travelling, TfL’s income collapsed almost overnight.

The Deputy Mayor told me that Government has required TfL to show how it could break even by April 2023, which means it will have to find ways to plug a big gap in its budget, with people likely to travel less in the years immediately following the pandemic. We discussed the various ways in which this could be done, and it is clear none of them are easy or straightforward. Hiking up fares massively for those few who are travelling at the moment, for example, wouldn’t do the job – it would raise too little and would be problematic when people are struggling with their finances.

I was reassured to hear that if Government doesn’t allow London to keep its VED to pay for public transport, a Boundary Charge would still have to pass several major hurdles to become a reality. It would be unlikely to be introduced before 2023/4, and if it was limited to around £3.50 per vehicle – the example that has been floated – it would be about the same cost as a car park charge. Of course, one of the ironies in how all of this is talked about is that there has already been actual increase in the cost of driving into London – the increase in the Central London Congestion Charge from £11.50 to £15.00 last year. Which happened to be at the direct insistence of the Conservative Government.

Cllr Mark Ingall

Leader of Harlow Council

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