The new London Act will give the capital's new authority and mayor the power to impose congestion charges and to tax workplace parking spaces. This will see London as the testbed for these highly controversial measures which have divided the business community and risk alienating private motorists. The idea behind the two charges is the straightforward creation of a guaranteed income stream - estimated at £1 billion per year - that local authorities can use to improve their transport infrastructures.
But while few people deny that traffic congestion is a pressing problem in urban areas - the London Planning Advisory Committee estimates that it would take a reduction in traffic of 35-40% to achieve acceptable air quality in central London - the relevance of charges for driving into provincial town centres and parking at the office is far more debatable. London at least has a public transport infrastructure, however old and creaking, but alternatives to the car in other towns and cities are few and far between. This week, the British Chambers of Commerce called on Chancellor of the Exchequer Gordon Brown to promote real improvements in public transport and provide local authorities with immediate funds for investment in transport projects.
The Treasury has made the radical concession of hypothecating these revenues for at least 10 years, meaning that local authorities must ring-fence any money raised from congestion and workplace parking charges for future investment in the transport infrastructure. But this has not fully reassured local authorities that all the money raised through the new charges will be incremental to their existing transport budgets. They fear that the Chancellor will give with one hand and take away with the other, cutting local authority budgets and forcing them to make up the shortfall with the new charges.