Fleet News

Congestion fees are under attack

Leading industry groups have criticised Ken Livingstone’s new plans for the London Congestion Charge, claiming increased rates will not reduce the number of cars entering the city.

The proposals include a higher charge of £25 with no discount for residents on vehicles emitting more than 225g/km of CO2.

The standard £8 charge will remain for vehicles with 121g/km to 225g/km and there will be a 100% discount for cars with 120g/km or less which meet the Euro IV air quality standard.

However, Alec Murray, non-executive chairman of the Retail Motor Industry Federation, believes traffic levels will not reduce.

He said: “The emissions of most cars driven in central London fall below the highest proposed emissions-based congestion charge level, so it is questionable if the proposed plan will achieve its aim of further reducing central London traffic levels.”

The new charges will mean residents with higher-emitting vehicles paying £6,200 per year – up from just under £200.

John Lewis, director general at the British Vehicle Rental and Leasing Association (BVRLA) also condemned the proposals.

He said: “The mayor must have real problems on his revenues, especially since the zone was extended westward to mainly residential areas. Everyone who lives in the extended zone qualifies for a 90% discount at present and will doubtless be using their cars far more frequently for journeys into the old zone.

“It is difficult to see what he is playing at now. The original purpose of the congestion charge scheme was to reduce congestion.

“Now that he’s attempting to move to a CO2-based scheme the goalposts have moved. At a time when congestion in central London has crept back up and is showing only an 8% reduction on pre-charge levels as opposed to 30% when it was introduced, Mr Livingstone, as a canny politician, is shifting his ground.”

And the changes could have an effect on residual values, and stock movement, experts at EurotaxGlass’s claim.

Managing editor Adrian Rushmore said: “There would be an inevitable and potentially profound impact on the residual values of higher-emission cars if these proposals come into force. There would likely be a surge in part exchanges as some motorists attempt to reduce their daily running costs, and the resulting increase in volumes of cars passing through dealers and auction houses would quickly depress prices, with no prospect of any recovery.

“Meanwhile, dealers in and around the congestion zone would need to change the profile of their used car stock to reflect the shift in demand towards lower-emission vehicles. They would also come under pressure to move affected stock into parts of the UK where prices have been hit less hard, using the internet more intensively to reach potential buyers nationwide.”

Some vehicle marques and segments could be more affected than others.

“In Greater London specifically and the south-east there are already a disproportionately high number of the premium brand, sports and luxury cars that would be most affected by the proposed changes.

“Worst affected would be those marques whose ranges are dominated by higher-emissions cars and who currently rely on sales within the south-east of England.”

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee