Taxes and charges on road users - Transport Committee Contents

Examination of Witnesses (Questions 280 - 299)



  Q280  Sir Peter Soulsby: I would just like to follow up the revenue predictions which were made at the outset and the extent to which those have differed from what was predicted, particularly perhaps the extent to which the proportion of revenue which comes from fines has differed from what was originally expected.

  Ms Dix: I do not know that it has necessarily differed because the proportion assumed from fines depended on the level of compliance and originally people did not necessarily comply, either because they forgot or they did not know, or in some instances they thought maybe they could get away with it, but the level of enforcement associated with this scheme was very high and we have seen a marked decrease in the number of PCNs which have been issued from the early days. So we had a range of forecasts but we were not being reliant on the PCN revenues. They only form 25% of the revenues that are collected at present and that is despite the fact that we have put in a lot of measures to try and make it easier for people to pay and also we introduced Pay-Next-Day, which was a big improvement as far as the public were concerned because if they forgot come midnight on the day they travelled, they then actually had another whole day, and that saw PCNs fall by 15%.

  Q281  Graham Stringer: The administration of the scheme is about 50% of your income. Do you think compared with other schemes around the world that is fine?

  Ms Dix: It is high according to the figures we have about other schemes around the world and we have been around the world talking to other areas to try and understand the differences. Some of the differences relate to our scheme having a high level of enforcement and the enforcement costs being attached to the total costs of the scheme, whereas in some countries enforcement costs are not in the figures quoted. Also, to make it more convenient there are lots of different ways in which you can contact the organisation and lots of different ways in which you can pay for the Congestion Charge and they add to the cost of running it, but we have actually issued a new contract for the congestion charging scheme and there will be cost savings in the way it is operated going forward.

  Q282  Graham Stringer: Roughly how much?

  Ms Dix: Sort of 10 to £15 million.

  Q283  Graham Stringer: So not a huge percentage but a reduction?

  Ms Dix: Yes, but they are savings.

  Q284  Graham Stringer: When Ken Livingstone came to this Committee before the scheme started he said that he was going for the simplest scheme so that it would work and he said his political career depended on it. I was involved in the discussions around the Congestion Charge in Manchester and that was a much more complicated scheme, in fact it was a double scheme. They have tag and beacon as well as number plate recognition and 14 day accounts or longer to pay, and yet when I compared the costs of the proposed Greater Manchester scheme with yours they were much less. Do you think that was credible? Are you unbelievably inefficient, or were we being told porkies in the Greater Manchester scheme? It must be one or the other.

  Ms Dix: All I would say is that when the work was originally done for the Central London congestion charging scheme before the scheme was adopted by Mayor Livingstone the estimates for the set-up and the operation of the scheme were considerably less than those which actually came back when we procured it, i.e. because of the complications of the scheme. I am not saying that people have told porkies at all, but I am not sure that unless you have procured it you have actually got the full range of costs. But I do believe we are trying to reduce the costs which we have on the system. We are aware of these comparisons across the world and there are ways in which we could reduce costs by removing some of the services.

  Q285  Graham Stringer: Let me ask the question again. Do you think it is credible to run a more complicated scheme for something like a quarter to a third of the administrative costs you are using?

  Ms Dix: Without looking at the Manchester costs in detail, I cannot say what they have included or not, but I would always want to have a look and be, I suppose, a bit sceptical. I was certainly sceptical about the Edinburgh figures.

  Q286  Graham Stringer: About a quarter of your income comes from fines. Do you know the composition of the people who pay those fines, how many of them are from outside of London?

  Ms Dix: 2% of PCNs that are issued are for foreign vehicles.

  Q287  Graham Stringer: From people outside? I get constituents in Manchester who write to me and say they did not understand the Congestion Charge. They have not been sent a fine for it, which they would have been happy to pay, the original Charge, but they just did not know how to do it. I just wondered what percentage of that 25% of your income comes from people who just did not understand it because they did not live in London or the South East.

  Ms Dix: I am afraid I do not have that figure in my head, so I will have to come back to you on that, unless you know, Nick?

  Q288  Graham Stringer: Do you think you could tell us, because it is a concern?

  Ms Dix: Yes, I will find out for you. It is just not a number I have in my head.

  Chairman: You can send that information to us.

  Q289  Mr Martlew: I think, Chairman, we should put it on the record that we did invite the Mayor to come and he was unavailable. I think it is unfortunate because obviously the panel we have got before us are very reticent to go on about future policy, whereas I am sure Boris would not have had that constraint! Looking at the technology which is being used, if you were starting again would you be using GPS? Would you look at a totally new technology?

  Ms Dix: If we were starting right now we would probably think about using tag and beacon technology. Certainly we did a lot of trials of different technologies in London and their suitability for application in London. This is since the original scheme was introduced. All these trials were done sort of 2005, 2006, to understand whether the technologies which were being advocated by others would work in London. We were concerned whether or not if we had GPS technology the number of satellite readings, the accuracy of picking people up on a particular road would work in particularly Central London where we have got a lot of high buildings. So some early trials did not convince us that it was ready for a link by link charging system. We looked at tag and beacon, which was to read vehicles as they came in the zone or different locations in the zone in order to automate the scheme more and the results of those trials were much more compelling.

  Q290  Mr Martlew: The Committee visited the Netherlands and obviously we had deep discussions about their scheme and they are going for the GPS scheme. One of their objectives, the main objective, is to reduce congestion. I accept they do not have such a number of high buildings, but I think it was Mr Ranger who said billing people out. Surely that is the way forward, sooner or later, whether we get Galileo or whatever? The technology you have got now is rapidly becoming out of date, is it not?

  Ms Dix: We can use the camera technology which exists now to introduce the billing system which Kulveer is talking about. If we want to introduce accounts we can use the camera system we have got available. If we want to introduce more flexibility in the system we would have to move to a new technology such as tag and beacon. If we want to get to a distance based charging scheme, whether or not you would want to invest all that technology just for the Central London area and all tracked by time of day when in fact congestion in fact exists all day long, it might be inappropriate to have a complicated piece of technology if you have got a simple problem. If there was ever a need to look beyond Central London and have a wider distance based charging scheme, then you would need to improve the technology, but if you want accounts right now you do not necessarily need to change the technology.

  Q291  Mr Martlew: My final question: do you think the sort of Congestion Charge around a city like we have got in London and like they have not got in Manchester has had its day? After the referendum in Manchester, do you think that if we go forward it is going to be a national charging scheme?

  Ms Dix: I think the referendum in Manchester and also the recent vote in London about the western extension, the vote in Edinburgh and the online petition on charging which we had point to the fact that the acceptability argument is not being won and the rationale for introducing these schemes has not convinced people necessarily that they are the right way forward. So if we had a national scheme would that make a difference? It would only make a difference if you were introducing it and taking something else away.

  Mr Ranger: Could I add to that? Going back to some of my original comments, I think we have to look at schemes and how their benefits then get eroded and whether people still see a value in them. I think public transport in London is exceptional in terms of the amount of choice and it makes it unique in terms of why the Congestion Charge was applied to Central London. So in different areas of the United Kingdom it would be difficult because of the uniqueness of London as an area. We have to take into account over the oncoming 10, 20 years and further—I think some of you may have seen the Mayor's document Way to Go, which is looking to present an initial vision for discussion and how we see transport in London. That is looking at some of the major infrastructure we are looking to deliver, such as the line upgrades on the Underground, Crossrail, the cycling revolution bike hire schemes and maintaining and improving the bus network there already is. All of those, plus just the construction periods for those and projects like Thameslink, will have a huge bearing on how we see traffic and congestion in Central London. So we are trying to understand the impact of all those schemes in their periods of delivery as well as in their periods of operation, and then where does congestion sit and how do we deal with it through that period of time. That is some of the work which we are looking to do through the development of the new Mayor's transport strategy in conjunction with revisions to the London Plan.

  Q292  Mr Clelland: I am just a bit concerned that Nick Lester seems to be having quite an easy time! What doe the London boroughs think of the Congestion Charge? How would they like to see it developed or what changes would they like to see?

  Mr Lester: I think there is a number of views on the Congestion Charge scheme varying from borough to borough. Clearly the boroughs of West London had strong views on the western extension, which they expressed at the time. At the occasion of introduction of the scheme in 2003 the majority of boroughs were supportive. Again, some of the boroughs had problems in detail. I think all of the boroughs are convinced about the need to improve issues such as fairness, which Kulveer Ranger mentioned, the way in which the scheme operates more efficiently for all sorts of reasons and to make the maximum benefit for the opportunities it releases for managing traffic more effectively.

  Q293  Mr Clelland: Are any of the boroughs perhaps thinking about having their own congestion measures because presumably the congestion problem in Central London can also be a problem in some of the boroughs themselves? Have they any plans to introduce congestion charges or other measures to reduce congestion in their own areas?

  Mr Lester: There is a variety of ways in which people are looking at measures to reduce congestion. There have been some discussions and some thoughts about specific charges in one or two places. Greenwich has been mentioned, Heathrow Airport has been mentioned. None of those have got to the stage of a formal decision to go forward as yet and I know that the authorities in those places, with TFL, are looking carefully at all of the options to see what is most acceptable and most effective to deal with particular traffic problems in those areas. I know that one of the issues which was raised in the context of the Low Emission Zone is the restriction which existed in the legislation, for perfectly good reasons, of having only one charging authority on any one stretch of road. The existence of the Low Emission Zone means that TFL is the charging authority for every road or almost every road in London and so of necessity any borough which had a proposal to introduce congestion charging in any area would need to work very closely with TFL to have a scheme which was acceptable both locally and London-wide.

  Q294  Mr Clelland: Give the measurement of opinion on the western extension and given the referendum in Manchester, do you think that any future proposals for congestion charging would have to be accompanied by a referendum or some measure of public opinion?

  Mr Lester: I would have thought it was impossible to introduce any form of charging scheme without having a very clear view of public opinion, and indeed that was the case in 2000 when at the first mayoral election for London Mayor Livingstone stood on a clear platform of introducing a congestion charge. He chose not to have a referendum but presumably (although I am putting words into his mouth, which I am very hesitant indeed in doing) he could have advanced the argument that the Election which elected him meant that a referendum was not necessary.

  Ms Dix: The public opinion vote at that time was very positive as well, particularly because of the hypothecation.

  Q295  Mr Clelland: Is your perception that public opinion continues to support the current Congestion Charge?

  Ms Dix: The Central London congestion charging scheme has support; it was the western extension which was in question.

  Q296  Mr Clelland: So in his quest for fairness, if the Mayor of London decided to have a referendum on whether he should continue with the Congestion Charge in Central London, you are confident he would win it?

  Ms Dix: No, because I think referenda do not necessarily attract the same sorts of views as if you undertook a consultation.

  Q297  Chairman: What about the views of business towards the Congestion Charge? How would you assess those?

  Ms Dix: Business was very, very supportive of the original scheme. Businesses were very much behind the original scheme, wanted it and were supportive of it. Businesses were concerned about the western extension in the first instance, big business as well as small business, but with the western extension, when it went it and it worked, big business was more neutral on it in terms of the effects it had, but small businesses were concerned and remain concerned because they felt more directly affected.

  Q298  Chairman: We have been told that as far as vans and HGVs are concerned, in terms of deliveries, the time saving is very insignificant and therefore is not of much value to them. Has that been reflected in what you have heard?

  Ms Dix: There were time savings for deliveries. One of the opponents of the original congestion charging scheme was the Evening Standard and it was one of the first ones to say that it actually saved time following the Congestion Charge with its deliveries. So time savings were gained. Some of the bigger winners were some of the financial services businesses because people getting to and from meetings, et cetera, were saving time. I suppose the biggest winners were those who do not pay (i.e. they had the benefits of the Congestion Charge, they did not pay) and those were public transport users and bus users in the main, but small businesses have felt the impacts of the Charge and small businesses continue to lobby about the impacts of the Charge.

  Mr Ranger: I think we have to bear in mind that 95% of people who come into Central London come on public transport or walking and cycling, so there was a small number who were being affected by the Central Zone. I think the western extension was very, very different in terms of the makeup of the people there, the types of businesses which were being affected and the residential population as well. Businesses still, I think, engage and see the Central London Zone as a positive effect.

  Q299  Ms Smith: I just want to challenge a statement, Mr Ranger, you made when you said that London is unique in terms of its transport and road networks. Can you explain why you think that is the case?

  Mr Ranger: In terms of the number of options people have for public transport, the capacity of public transport, the infrastructure which currently is in place and also the investment that is going into that infrastructure. So by implementing a charge people still have a variety of options and choices about how they can travel if they are not going to take their vehicle, whereas the majority of the rest of the UK I would say would probably not have that level and capacity of public transport which London has.

  Ms Dix: Could I just add to that? I think in many ways it is Central London which is unique.

  Mr Ranger: Yes, Central London.

  Ms Dix: 90% of users are public transport users and it is also unique in the fact that congestion is all day congestion. It does not have a morning peak and an evening peak like a lot of areas, it is all day congestion. So it has different challenges and different options perhaps, rather than being entirely unique.

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