Congested Logic

Driving is becoming an expensive habit in London

By Salil Tripathi

Wall Street Journal Europe

2/18/2003

Only one thing is certain about Mayor Ken Livingstone's controversial congestion charge, which was launched on Monday and will levy a toll of £5 on most cars entering central London: Congestion won't decline dramatically, even though the city hopes 30% of commuters will switch to public transport. That's because London's public transport is in tatters. The charge will just add another indirect tax on Londoners while providing little relief on the road, or in its subway system.

For the congestion charge to work, it should accompany improvements in public transport. That hasn't happened. Only two weeks ago London's infrastructure collapsed spectacularly as a mere few centimeters of snow brought London to a standstill. Facing icy winds, thousands of men and women, young and old, were forced to walk on slippery sidewalks, some stumbling, some holding on to freezing handrails. The line of people looked like a Biblical exodus, as the subway cars refused to travel outside the warm comfort of their tunnels, behaving like a hibernating invertebrate.

Mr. Livingstone had warned the week he took office some two years ago that he was serious about the congestion charge. But the public consultation was perfunctory. No city of London's size has attempted something on this scale. To be sure, traffic is slow in London (average speed 10 mph; at peak times, 2.9 mph) and road usage has increased. The Labour government has given up its pledge of reducing congestion by 6% by 2010. Motorists accept that there may be too many cars on the road, but they argue they have no choice, given the state of public transport.

A "user pays" system like road pricing makes sense in theory, but the evidence that it will do so in practice is mixed. Oslo set up a "toll ring" around the city center in 1991, and Trondheim and Bergen followed. But the volume of city-center traffic hasn't fallen, though Norwegian authorities have used the revenues to improve public transport.

Is London drawing the right lessons? London's choking points, some argue, are its orbital and radial ring roads, which outsiders must use to enter London, and those remain toll-free. The mayor's plan divides the city into inner and outer halves, confirming a socio-economic divide that already exists, in subway connections, real estate prices, even separate dialing codes. The flat £5 charge is also regressive, for it will disproportionately hurt less well-off Londoners living far from the city in areas not served by public transport, who have no choice but to drive -- those professionals such as postal workers, nurses and firefighters, whose cause Mr. Livingstone claims to champion.

One place where road pricing within a city has worked is Singapore. But that's because road pricing is only one part of a far more comprehensive policy than anything contemplated in London. Singapore's Mass Rapid Transit (MRT) has 64 stations in an island slightly bigger than the Isle of Wight. Down there they know how to make trains run on time. In the eight years I lived in Singapore, the MRT had been out of action only twice. In London, on some lines you are lucky if there are only two disruptions in a week.

London Underground is starved of investment (and Mr. Livingstone has opposed privatization of the system, which could bring new investment). Mr. Livingstone fears that unless he takes drastic measures like a Singapore-style congestion charge, London may become Europe's Bangkok. But Singapore's policies include measures which Mr. Livingstone cannot implement. Singapore penalized car ownership before it became a problem. Import duty and sales tax add 195% to a car's price in Singapore, and a car's roadworthiness is declared to be 10 years, after which the car must be scrapped, or else the owner must cough up a fresh duty to continue using it. The city's car population can rise by only 3% a year. Are Londoners ready to live like this?

Then there is the "certificate of entitlement" (COE). Potential car buyers must buy a COE, which can send car prices even higher, sometimes by as much as £50,000. So a Mercedes-Benz S280 in Singapore costs S$289,000 (€153,270), compared with £44,409 (€66,917) in London. Honda Civic, (£15,000, or €22,602 in London), goes for S$100,000 (€53,034) in Singapore. The COE yields Singapore millions of dollars annually, providing the city with resources with which it has built expressways and tunnels. It is this fixed cost which has restricted the number of cars in Singapore. The marginal cost of driving ranges between a modest 50 Singapore cents (€0.27) and S$3 (€1.60) at peak hours. It is beyond Mr. Livingstone's powers to implement such policies.

What's certain is that road charges and fines may raise between £150 million to £250 million for London, though they will cost an estimated £100 million to administer. The remaining bonanza is the real rationale behind the congestion charge. Little wonder then, why the mayor is so keen, and why so many other cities are watching expectantly at London's experiment.

Mr. Tripathi is a London-based writer.