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Last Updated: Tuesday, 17 February, 2004, 13:24 GMT
Business piles blame on congestion charge

By Tom Symonds
BBC transport correspondent

Cyclist in congestion charge zone
Have London's roads been freed up?

It is the one fly in Ken Livingstone's ointment.

The Mayor of London's congestion charge has radically cut traffic levels, has been largely accepted by Londoners, and has not put too much pressure on London's public transport.

But what is it doing to London's economy?

Serious damage, according to critics of the charge.

The problem is that it is relatively easy for companies to claim their difficulties result from the congestion charge.

And it is much more difficult to prove that the charge is not to blame.

Oxford Street

The mighty John Lewis has been leading the case for the prosecution.

In September last year the company said sales at its flagship London store were down 9% compared with its other stores.

The company hinted darkly that other big Oxford Street shops were suffering the same effects.

John Lewis is so concerned it has appointed an independent academic to assess the effects of the charge.


More evidence has been presented by the London Chamber of Commerce.

The first day of the world's biggest congestion charge scheme has seen traffic in central London fall by an estimated 25%.

It has claimed a massive 79% of retailers were reporting reduced takings.

A quarter had laid off staff just because of the congestion charge, the Chamber insisted.

Critics dismissed this November report because it relied on companies to respond to the London Chamber's survey; 79% of respondents is not the same as 79% of all retailers.

Faster flow?

Surely companies that deliver goods in London would have benefited from the 16% drop in traffic since the introduction of the charge?

Not a bit of it, says the Freight Transport Association, noting that 69% of companies responding to its survey said they had not noticed any improvement in journey times, despite official figures that traffic is moving 14% faster.

Staying away

The response from Mr Livingstone and his economic experts has been robust.

Transport for London (TfL) claims 60,000 vehicles no longer come into the charging zone.

Most of them, that is 56,000, have switched to tube, bus, bike, motorbike, and for the fashionable, scooter.

That leaves 4,000 vehicle journeys to be accounted for.

Of those TfL estimates half, or 2,000, will simply come in at the weekend instead when the charge is not in operation.

Still shopping

Since cars in London have an average of 1.5 occupants, that would mean no more than 3,000 people a day have given up entering the city centre.

Congestion charge signs
The congestion charge is here to stay
The London Annual Travel Survey suggests just 9% of car journeys in Greater London are for shopping.

This leaves Mr Livingstone's experts to conclude that the congestion charge has, at worst, only prevented around 300 people from going shopping every day.

A lot of estimation has been used to arrive at this figure, but Mr Livingstone believes it simply does not add up to a crisis for the London economy.

Indeed, the latest figures from retail analysts SPSL show that stores within congestion charging zone are attracting more shoppers than they did before the charge was introduced.

The Retail Traffic Index for the Congestion Zone recorded a year-on-year rise of 4.7% in January, higher than the gain made in the London and the South East region generally.

Other factors

So what else could be damaging business in London?

A report from the Greater London Economics Unit argues the UK economy has been slowing down since the introduction of the charge.

It also points out that the Central Line, a vital artery for London's shopping district, was closed for some of last year following a derailment.

This was estimated to have prevented around 250,000 shoppers from visiting Central London.

There was also a drop of up to 15% in oversees visitors last year following the Iraq war.

Transport for London sources claim these are the real problems for London companies, not the charge.

And they say many companies are attacking the charge to shore up their demand for a reduction in business rates to compensate for falling trade.

Real benefits

It is not an issue that is going to be easy to resolve.

Companies are reluctant to reveal the inner secrets of their balance sheets, and Ken's number crunchers are relying on plenty of 'best guesses'.

TfL continues to insist the introduction of the congestion charge has brought benefits worth up to 220m per year in reduced travel time, fuel costs, and accidents.

And for now, London's Mayor is adamant.

The charge stays.

Jury out on congestion charging
16 Feb 04  |  London
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15 Jan 04  |  Scotland
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02 Jan 04  |  England
Opposition to congestion charge
23 Dec 03  |  England
Tracking the future of driving
09 Jun 03  |  Politics

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