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Leaders of automobile-choked cities around the world are keeping a close eye on London Mayor Ken Livingstone's controversial plan to reduce worsening traffic congestion and pollution by making motorists pay to enter the city's centre. The so-called congestion tax is one of the more radical assaults in a losing war against the gridlock that is slowly strangling most major cities and adding millions of dollars annually to the cost of doing business.

Mr. Livingstone's scheme made a fairly impressive debut on Monday. Traffic was down by 25 per cent in a 21-square-kilometre zone that encompasses some of the most expensive real estate in the world. That's better than the target of 10 to 15 per cent. But even Mr. Livingstone, a spotlight-loving socialist who has never owned a car, acknowledges it will be at least two months before the verdict is in. If the scheme isn't working, he has vowed to scrap it, despite the huge costs involved.

The plan's many critics warn that it unfairly penalizes small business and certain categories of workers, and will place an added burden on the overcrowded and creaking public transportation system. As well, it will shift higher volumes of traffic to areas outside the congestion zone. Officials have said they expect about 50,000 drivers daily to steer clear of the zone, with about 20,000 of them switching to public transit.

But everyone recognizes that something has to be done. Short of regulating entry or banning traffic outright in certain districts, as several other European cities have done, why not a road-pricing mechanism that has long been advocated by free marketers?

Under London's plan, which has cost $485-million (£200-million) just to set up and staff, with another $240-million for traffic management, motorists must pay $12 a vehicle to enter central London between 7 a.m. and 6:30 p.m. on weekdays. Having paid once, they may come and go as they please that day.

There are exemptions for the disabled, for buses, taxis and emergency vehicles, for cars and trucks that run on alternative fuels and for residents inside the designated zone who leave their cars parked all day. Residents who do use their cars get a steep discount.

About half the money collected will go to cover costs. The rest, an estimated $290-million, is earmarked for public-transit improvements.

Anyone who attempts to avoid paying and whose licence is captured by one of the more than 800 video cameras set up at intersections around the congestion zone or by one of the roving mobile cameras faces stiff fines that start at $195.

But both the payment and policing systems are cumbersome. Instead of using efficient transponders or smart cards, drivers must pay the daily charge at post offices, gas stations, retailers or vending machines, through the Internet or by text messaging. On the enforcement side, the video images of every car have to be matched against computer records of those who have paid.

It would not be easy to transplant the system to this side of the Atlantic, where the car culture is so entrenched. Even in the old cities of Europe, London's scheme will work only if much more is spent to upgrade public transit. But in the absence of a better plan, it's certainly worth considering.