Ken Livingstone has announced the latest nail in the Congestion Charge’s coffin. Even less income will be collected as a result of today’s announcement. This announcement was headlined on the Radio 4 PM programme today as “increased CC for the most polluting vehicles”. In the details of the press release though it seems that small vehicles will be exempted from 2008 but the extra charge for large vehicles will not come in until 2009 or 2010. In other words our economically illiterate Mayor is going to give up a substantial part of the existing income before he gets the new income.
As I wrote back in September the CC has to make a surplus of at least £60 million in the current financial year just to break even over its life to-date. This latest blow to the financial viability of the CC will ensure that all of the income, over £200 million a year from hard-pressed London drivers, is totally wasted in excessive costs.
The CC is specifically designed to force people to make errors and incur excess penalty charges. It is therefore very dependent on penalty payments to make a surplus. As Conservative AM Angie Bray revealed by asking a question of the Mayor 30% of revenue comes from fines. There is a significant risk of a collapse in revenue as London drivers get wiser. This was seen recently when Angie Bray asked about the impact of allowing people to pay the next day. The answer revealed that the CC will lose £5.7 million a year as a result.
Another blow was highlighted in the Evening Standard on Monday. A lone campaigner called Barrie Segal is challenging various aspects of the administration of the scheme. The Standard reports that another £8 million of fines are potentially at stake.
It appears that the Mayor is trying to rebrand the CC as a carbon fighting measure. We know it has had no significant impact on the steady reduction in car use in central London, driven mainly by the sustained persecution of London drivers by decriminalised parking (code for taking parking off Met traffic wardens and allowing local authorities to soak drivers). It has yet to make money and it is looking increasingly likely that it never will.
Up until the end of March 2006 the Mayor has taken £677 million off London drivers and blown all of it and more on costs. What a chump!