Assignment
The London Congestion Charge A congestion charge of £5 has been levied on drivers in an eight square mile zone in inner London since 17 February 2003. The charges operate from 7.00 am to 6.30 pm, Mondays to Fridays, excluding public holidays, and must be paid in advance (at selected retail outlets or by Internet or by SMS text) or by 10.00 pm on the day your vehicle entered the zone. An £80 penalty charge is imposed on those who fail to pay and have been identified by cameras recording their vehicle registration plates. Discounts of up to 90% are available for residents and other designated (e.g. blue badge holders) individuals. Any monies received by ‘Transport for London' from the charge must, by law, be spent on transport. Twelve months after the introduction of the London Congestion Charge, some interesting results have been noted:
- cars in the charging zone are down by 30%;
- journey times in the charging zone are 10-15% faster;
- bus journeys in the zone are up by 15%;
- taxi journeys in the zone are up by 20%;
- cycles entering the zone are up by 30%;
- 108,000 congestion charge payments are made each day.
Supporters of the scheme also point to less air pollution as being a further benefit of the scheme. The Mayor of London, Ken Livingstone, considers the congestion charge such a success that he intends to double the area of the charging zone in London as soon as practicable. Although widely acclaimed, some criticisms have been made of the London Congestion Charge. The company, Capita, running the scheme had admitted that limited resources result in it identifying and sending penalty notices to only 83% of those failing to pay the fee - with the remaining 17% (around 1,650 drivers daily) not pursued. Transport for London (TFL) originally estimated that the charge would raise some £200m for other transport projects each year, but only £68m was raised in the first full year of operation. Around 25% of London traders responding to a Mori poll in 2004 have blamed the congestion charge for a decline in business, though some 58% regarded it as broadly positive and to be welcomed. Nor is there much evidence to suggest that traffic congestion has increased in the areas bordering the charging zone, as critics argued would be the case. The RAC Foundation concluded that congestion outside the zone has also been reduced because fewer people are driving towards the centre of the capital. However, all is not perfect - the RAC Foundation noted that traffic is still averaging only 7.4 mph at peak hours inside the zone.
Question
1 Mr Livingstone claimed that the London Congestion Charge has caused a change in travel habits in favour of public transport. What evidence is there to support this claim and what consequences might follow from it?
2 Why do you think London businesses claim to be broadly supportive of the scheme?
3 How might the current London congestion charge be modified if it is to move more closely towards a Pigouvian tax which charges individual drivers according to the negative externalities they themselves impose?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.