London’s congestion charge has taken a wrong turn

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Congestion charging can have a substantial effect on behaviour, but busy commercial centres tend to derive their advantages from the clustering of business activities, which cannot function without large-scale transport of people and goods.

Four years after its introduction, London’s congestion charge was extended yesterday to the western part of the central area of the City. Motorists must pay £8 ($16) per day to drive anywhere in the zone. Residents pay 10 per cent of the full charge.

The original charging area is the commercial centre of London. It includes not only the City of London, but Oxford Street, the main shopping area. In the charge zone you will find the theatre district, head offices of companies and suites for hedge fund managers, the Tower of London and Trafalgar Square. Over a million people work in the area but only a fifth of that number live there.

Mayor Ken Livingstone staked his political career on this experiment and got away with it, securing comfortable re-election. Cities around the world have been watching London’s experience. Although the measure seems quite popular in London, 1.5m people have signed a petition opposing government plans to develop a general scheme of road pricing on Mr Livingstone’s coat tails.

Transport for London has published careful studies of the impact. As a result, we have a reasonably clear picture of the consequences of the experiment.

The charge has reduced the number of cars in the affected zone by around a third. There has been a considerable increase in the use of buses in the central area and a much smaller one in subway journeys. But it is hard to distinguish the impact of congestion charging from other improvements in public transport.

The reduction in congestion is much smaller than the effect on car use. Cars only ever accounted for half the vehicles in the zone and cars typically cause less congestion than other vehicles that load and unload in busy city streets. Average vehicle speeds did rise at first by about 15 per cent, but this effect seems to be gradually wearing off.

The experiment has been a moderate success. It demonstrates that congestion charging can have a substantial effect on behaviour, but also demonstrates the limits of such a policy. Busy commercial centres are bound to suffer from traffic congestion because they cannot function without large-scale transport of people and goods. Congested locations derive commercial advantages from the clustering of business activities, such as finance and law, and shops gain from their proximity to each other in commercial streets.

These benefits more than compensate for the high rents of central London and there will not be much response by businesses even to a very high congestion charge. What the experiment has done is to ease the path of commercial deliveries and of public transport – buses and taxis – by achieving a big reduction in private car use in Britain’s most congested area.

The implications of extension are altogether different. As in other western European cities such as Paris and Berlin, the western half of central London has a different character from the east. The prevailing westerly winds, which blew the stink of 19th century cities east, is a frequently cited explanation. The western area of Belgravia and Kensington, Bayswater and Notting Hill is mainly residential. More people live than work there and most of the vehicles on its roads are private cars rather than vans and lorries. While most journeys in the east central zone begin outside it, most journeys in the western area begin within it. Most, perhaps all, of the revenues from the western extension will be absorbed in operating costs, since so many travellers pay the discounted residents’ charge. If they drive into the eastern part of the zone, they will begin to recreate the congestion in the commercial areas the earlier plan addressed.

Congestion charging will be different when it is technically possible to vary the fee with route and length of journey – the surveillance of movement that many of the 1.5m protesters fear. Until then, systems will be crude and imperfect. The initial plan was – probably – a good idea. Its extension – probably – is not.

John Kay lives in the eastern part of the congestion charge zone

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