Is a Greater London Boundary Charge for entering the capital likely to be introduced?

As negotiations continue between government officials and Transport for London about a long-term financial settlement for the capital’s transport body, there’s been a lot of media excitement about one idea within a package of suggestions TfL submitted to the Department for Transport for discussion last month. It’s called the Greater London Boundary Charge.

Were it ever introduced, the Boundary Charge would be an addition to London’s three existing road-user charging schemes: the Congestion Charge, which applies to Central London; the Low Emission Zone, an anti-pollution measure which operates London-wide; and the Ultra Low Emission Zone, which currently covers the same area as Congestion Charge zone and will be extended to the North and South Circular roads in October.

In their proposals to the government, TfL say the charge would be set at £3.50 a day, except for vehicles that breach ULEZ air quality standards, which would be charged £5.50 a day. The charge would be levied on the owners of vehicles registered outside the capital when they drove into the Greater London area.

TfL’s submission to the government also says it would be at least two years – October 2023 – before any Boundary Charge could be introduced. The current financial settlement with the government expires at the end of March and TfL would like it agreed by its next board meeting on 16 March. Like other local authority bodies, it has a budget to set.

Conservative politicians, anxious to secure votes in suburban areas, have been making misleading claims about the Boundary Charge idea. Tory mayoral candidate Shaun Bailey has dubbed it an “Outer London Tax” – words that could be interpreted as meaning the charge would be levied on people who live inside Outer London, which would not be the case.

Bailey has also stated that Sadiq Khan “is introducing” the charge, giving the impression that a decision about it has already been taken and that its implementation will happen soon. That too is untrue. The Boundary Charge is merely an option TfL has asked the government to consider. In addition, Bailey has been saying the charge would be set at £5.50 a day, giving the impression that everyone who had to pay it would pay that amount, when the truth is that only the owners of the most polluting vehicles would have to pay £5.50.

Neil Garratt, the Conservative hoping to retain the marginal Croydon & Sutton London Assembly seat for his party, has been making the same misleading claims about the Boundary Charge. He has started a petition headed “Sadiq Khan’s Outer London Toll Tax”, which claims “the London Mayor is planning to turn the London boundary into a digital toll gate” and says “Cameras at the border of London boroughs and the home counties would charge people £5.50 a day for entering”. On the matter of which people would have to pay, the petition is rather vague.

But, leaving the Tories’ disingenuousness aside, how likely is it that the Boundary Charge idea, as actually envisaged by TfL, will ever become reality?

On the face of it, not very. Transport secretary Grant Shapps has publicly dismissed the idea (albeit on questionable grounds). And Sadiq Khan himself said at Mayor’s Question Time last month he would prefer TfL’s alternative option for raising the same amount of extra money – about £500 million a year – which is for London to retain the Vehicle Excise Duty (VED) raised on Londoners which ends up being almost entirely spent on roads elsewhere in England.

Khan accepted as legitimate concerns raised by Conservative AM Keith Prince that the Boundary Charge could damage businesses in towns just inside the London boundary by dissuading people from outside driving in to visit them, and he accepted Prince’s challenge to join forces in asking Shapps to accept the VED option. A letter to Shapps to that effect, co-signed by Khan and the leaders of all four London Assembly group leaders has since been sent.

However, Shapps, ever-eager to score points at London’s expense, has been sniffy about devolving VED too, and control of that tax is entirely within his gift. By contrast, road-user pricing in London is first and foremost a matter for London’s Mayors. So if push came to shove and TfL and Mayor Khan (assuming he continues to be Mayor after 6 May) decided they wanted to go ahead with the Boundary Charge at some point, could anything stop them doing it?

The answer is not entirely clear. The relevant legislation, the Greater London Authority Act (1999), says TfL – and, indeed, any of the boroughs – “may establish and operate” road-user charging schemes, but that power is a qualified one. The same Act enables the secretary of state for transport to specify exemptions for such charges, reduced rates of charge and impose limits on the charges payable. That minister can also tell a London Mayor to alter his or her transport strategy if any part of it is judged inconsistent with national policies and if that inconsistency is considered “detrimental to any area outside Greater London”.

A 2018 House of Commons briefing paper about local road charges summaries the situation this way:

“The Secretary of State has no right to veto any plan for the introduction of charging in London, though (s)he could, in theory, refuse to make the necessary regulations to approve the proceeds of any scheme. Furthermore, any charging scheme that is introduced under the 1999 Act must conform to the Mayor’s Transport Strategy and the Secretary of State may direct the mayor to change his Strategy if he considers it inconsistent with national policy and likely to have an adverse effect outside London”.

So it’s all a little muddy. And although, as Neil Garratt correctly points out, TfL is undertaking a Boundary Charge feasibility study, it looks very far from certain that such a charge is on the cards, even two-and-a-half years from now.

What is more, if TfL did seek to go ahead with such a scheme after reaching a settlement with the government for sustainable long-term funding that excluded it, might that not be taken as an act of provocation against a national administration that has amply demonstrated its hostility to London and has the power to keep being nasty to it?

Exactly where the Mayor and TfL stand on all this at this point is difficult to know. Liberal Democrat AM Caroline Pidgeon has submitted a question to the Mayor asking if TfL has obtained legal advice about various Boundary Charge issues. She should receive an answer within a fortnight at most.

OnLondon.co.uk provides in-depth coverage of the UK capital’s politics, development and culture. It depends greatly on donations from readers. Give £5 a month or £50 a year and you will receive the On London Extra Thursday email, which rounds up London news, views and information from a wide range of sources, plus special offers and free access to events. Click here to donate directly or contact davehillonlondon@gmail.com for bank account details.