I confess that I suffer from CBS: Clarkson Bipolar Syndrome. I really like Jeremy: I bought my Land Rover Discovery 3 after he drove one up a mountain in Scotland, and I would happily have a pint with him at his new pub. He knows a lot about cars – but not so much about the economics of motoring. He, of all people, should love the congestion charge.
I worked on transport policy in the late 1990s, and the fact that this charge was detested by liberals and conservatives alike suggests that we got the policy about right. Let me explain why you should love congestion charges too – at least in principle. (Sadiq Khan’s 20 per cent increase of the London charge to £18 is a different question.) But first, let Jeremy set the scene with what he’s said about it on Top Gear.
‘I don’t understand bus lanes. Why do poor people have to get to places quicker than I do?’ And: ‘There’s something I just realised. I have to pay the congestion charge in this part of London. But the camera crew in the Lexus 4×4 don’t because it’s a hybrid. How fair is that?! I mean, it’s not like I’m creating any pollution at all!’
And there are lots of other quotes about unfair taxation and rights… The conservative critique can be categorised as: this is the state infringing on our liberties (freedom of movement); it is an attempt to raise revenue from motorists yet again; it doesn’t affect the drivers of electric vehicles, who are exempt from the charge.
First, the charge is not a tax – though Jeremy thinks it is – since you choose to pay a charge by choosing to drive into a congestion zone. You can also choose not to do that. Taxes are not optional – and the rationale for the congestion charge is, as the name suggests, to reduce congestion. In 2019, the average London motorist lost 149 hours a year to congestion. That’s over six days spent in a car thanks to traffic. However, after the charge was introduced in 2003, the amount of traffic within the congestion zone was reduced by around 30 per cent. So, we can see there is a persistent problem, but we can also see that the charge goes some way to fixing it.
This is exactly what the charge was designed to do: stop you stealing my time. When you sit in traffic, you are in my way – and I’m in yours – and that costs us all time. In economic terms, without a congestion charge, you pay the private marginal costs of driving but not the social marginal costs. Once it’s introduced, the monetary cost of driving better reflects these overall costs. As an aside, the congestion charge is not – or should not – be used to reduce pollution, which ought to be captured in a different charge. (By exempting electric cars, as Jeremy rightly pointed out, it is being used in that way in London.)
The price we’ve assigned to the cost of clogging up central London’s roads is £15. Don’t want to pay it? Don’t use up space and leave the roads emptier for people like Jeremy. Think a little about the broader economics: the median wage in central London is somewhere between £25 and £40 per hour, depending on how you calculate it. So, if I can save you 30 minutes, there’s a good chance you have broken even (time is money). For someone like Jeremy – reportedly worth £55 million and making around £10 million a series for The Grand Tour – he can cover the cost of the congestion charge in no time at all. The faster he gets to the studio or production company offices, the more economic value he can bring. And think about those delivery drivers, the florists with the dinky vans, the cab drivers – if you’re on the road all day, getting the rest of us out of your way is a bargain at 15 quid. Jeremy, you have a right to drive where you want – but not a right to get in my way for free.
Jeremy, you have a right to drive where you want – but not a right to get in my way for free
Then we come to the progressive case against the congestion charge – those who argue on behalf of people who are not as rich as Jeremy. First, I should note that most journeys in London were not made by car even before the charge was introduced by Ken Livingstone. But that is not the point: the rationale for the charge is to stop you stealing my time – or at least make you pay for the theft.
It is not about fairness. If poorer people get in the way, they steal the same amount of time as rich people do – and the charge applies to all. Change your behaviour (don’t drive at congested times) or choose to pay for the consequences of your choices. Why should my flowers cost more because you got in the way of the van delivering them?
Excess traffic costs London £4.9 billion a year. Instead of wasting that time, we should give time back to people and allow them to spend it making money. Then that can be taxed and redistributed fairly – if that is the policy choice you want to make. But trying to exempt poor people from the charge is economically inefficient. Even committees of the House of Commons, in numerous reports, have complained about the distributional effects of the congestion charge – as well as including it in discussions about pollution. Again, parliamentarians have missed the point.
Richer and poorer alike should stop the steal. London is arguably the most congested city in Europe. It costs each of us huge amounts of time – and the economy huge amounts of money. Those who add to that cost should be expected to pay for that.
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