Matthew Pencharz: Sadiq Khan’s ULEZ expansion has set back road user charging cause

The London Assembly transport committee’s recent report calling for some form of London-wide congestion charge – possibly paying per mile travelled – joins an ever-rising pile favouring more road user charging (RUC). This includes two from Policy Exchange (in 2017 and 2022), one from another think tank, Centre for London, (2019), one from the Institute for Fiscal Studies (2019) and the findings of the House of Commons transport select committee (also 2022). In the past decade there has even been a competition to find a technical mechanism for RUC that would be easily understandable and acceptable to the public.

However, all this effort and pulped trees has got us no closer to shifting motoring taxes away from the current mix of fuel duty – which has been frozen for 14 years – and Vehicle Excise Duty (often erroneously named “Road Tax”) and towards something more sustainable as we switch from fossil fuel-powered driving. That slow progress is despite the real danger of a £35 billion fiscal black hole forming as more people buy electric vehicles, causing the revenue from fuel duty to collapse. Meanwhile, the economic cost of chronic road congestion continues to be felt across the UK, and most keenly in London.

Transport for London’s strategy and innovation director, Thomas Ableman, has again confirmed that a “pay per mile” system is not being worked on. This shows that, like the controversy over the Congestion Charge – now 21 years old – and, more recently, the latest expansion of the Ultra Low Emission Zone and introduction of new Low traffic Neighbourhoods (LTNs), policies that seek to mitigate and manage the impact of ever-increasing traffic is challenging for policymakers.

Sadiq Khan’s expansion of the ULEZ to outer London, not blinking in the face of either outright opposition or less than lukewarm support from his party’s leader, has been brave. However, the fear is that the Mayor’s likely political vindication in the form of winning a third term on 2 May will be a Pyrrhic victory in terms of sustainable transport, not just in the capital but also nationally.

City Hall is unlikely to release data about the impact of the expansion on London’s air quality until after the election. But we know that commercial vehicle fleets had been largely cleaned up in advance of the first ULEZ expansion, from central London to the North and South Circular roads. on October 2021.

The further enlargement of the zone to cover the whole of Greater London has therefore been mainly affecting individuals with non-compliant cars. They are people who don’t drive around all day and therefore have relatively little effect on air pollution and the scheme has almost zero effect on congestion. Each of those private motorists is a voter and in the middle of a cost of living crisis will be unhappy about yet another cost being imposed on them.

Therefore it is likely that the expansion has brought about a massive row for relatively little air quality benefit and the resulting cost of comprehensive RUC being long-grassed for another electoral cycle, if not another decade.

Khan has had and probably won this argument in London. But following the Conservatives’ narrow win in the Uxbridge by-election last July – a political escape widely attributed to opposition to the then forthcoming new ULEZ policy – Rishi Sunak performed a handbrake turn, reversing his predecessor Boris Johnson’s drive to incentivise active travel with LTNs and support more sustainable modes. This has left the Mayor having spent all his political capital on expanding the ULEZ at the cost of any further move towards RUC.

An opportunity has therefore been lost. Despite Conservative allegations of secret plots by Khan to introduce a pay-per-mile system if he’s elected again, anyone who’s bothered reading their transport strategies will know that both he and Johnson, when Khan’s predecessor as Mayor, anticipated RUC being the direction of travel: Johnson’s referred to possibly having more of it in future and Khan’s was far clearer that the time was fast approaching when the current smorgasbord of the Congestion Charge, Low Emission Zone and Ultra-Low Emission Zone should be integrated. But even before Ableman’s remarks, Khan had publicly ruled out any further move towards RUC, at least during the next mayoral term.

For those on the right who wish to see a limited resource – road space – properly priced to increase economic efficiency, and for those on the left, who may be more motivated by environmental and social equity reasoning, the chance missed to bring in RUC is painfully felt. It will be felt even more keenly if, as is probable, the issue becomes prominent in the general election too, with the Tories challenging Labour to promise not to introduce more of it. That could mean another parliamentary term gone too.

The first two stages of the ULEZ had beneficial effects and were delivered with remarkably little rancour. The third stage will have relatively little policy impact at a huge policy cost – a poor return on political investment. The moral of the story is that if one is going to have almighty, divisive argument over a policy, one should ensure that winning it will be worth it.

Matthew Pencharz is Voi’s Head of Policy for the UK, Ireland and France but has written this article in a personal capacity. Follow Matthew on X/Twitter. Image shows existing London congestion charge zone. Support OnLondon.couk and its writers for £5 a month or £50 a year and get things for your money too. Details HERE.