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On 17 February 2003, a congestion charge was introduced for vehicles entering into the centre of London.
Although exemptions exist for residents and public transport, vehicles on essential business journeys gain no such assistance. Small and medium-sized businesses are presently being discriminated against by the congestion charge.
The scheme aims to reduce congestion and pollution, leading to faster, safer and more healthy travel. The intended beneficiary was to be public transport, both as a direct result of more demand and from the finance raised by the charge. Since the charge was introduced, there has been a 30 per cent fall in the number of vehicles entering the centre of London.
The total cost of setting up the scheme was £250 million, which was meant to pay for itself within three years. One week after its launch, Ken Livingstone said: "I can't conceive of any circumstances in the foreseeable future where we would want to change the charge, although perhaps ten years down the line it may be necessary."
However, due to a larger-than-anticipated reduction in inner-London travel, and as a result of spiralling costs experienced by the contractor responsible, plans were announced to both raise and extend the charge. In November 2004, Ken Livingstone announced a £3 increase in the charge, taking it up to £8. The zone was also to be extended to all of Westminster, and into Kensington and Chelsea.
Many other towns and cities in the UK have begun to consider congestion charging. Edinburgh residents were polled on the issue in early February, while authorities in Manchester have also considered introducing a vast congestion charging zone.
In 2005, a survey regarding the impact of the congestion charge revealed that:
One year on, and to mark this day, we thought it would be appropriate to see how the increase in the congestion charge was affecting businesses now. The results were alarming:
- Over 70% of respondents had seen a drop in their profits
- Over a third of respondents experiencing a drop in profits saw them fall by as much as 29%
- Over 70% of respondents had seen a drop in the footfall of clients
- Nearly 90% of respondents said the increase in the congestion charge was having a negative impact on their business.
- 80% of respondents reported no change to the level of traffic since the introduction of the Congestion Charge.
- 60% of respondents had thought of relocating their business outside of the Congestion Charge zone.
What is obvious is that a year after the London Congestion Charge was increased from £5 to £8, small firms are still feeling the strain.
The FPB's Chief Executive, Nick Goulding, says Mayor Ken Livingstone should rethink his commitment to a further hike: "Mr Livingstone has made his intentions clear; should he be re-elected he would increase the Congestion Charge to £10, meaning that the burden on business will have doubled since its introduction," he said.
"Although the Congestion Charge seems to have had little impact on the number of vehicles on the road, it has become an excellent way of raising revenue, whether that money is being spent wisely on improving public transport is another matter," Mr Goulding added.
At the FPB, we don't believe in simply lying down and accepting bad legislation. Time and time again, small businesses are forced to bear the brunt of ill-thought out decisions that put thousands of livelihoods at risk. And, when we see these huge injustices, we do something about it.
Congestion Charging is now an issue all across Britain, with a host of cities keen to hit their hard-up businesses with further costs.
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