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I beg to move,
That this House
has considered the proposal for an outer London congestion charge.
It is a pleasure to serve under your chairmanship, Ms Rees. I am very grateful to have secured the debate. The Mayor of London’s proposal to charge drivers to enter Greater London would have a catastrophic impact on places like Dartford and all the areas surrounding London. It would also have a detrimental impact on outer London boroughs. Businesses located in outer London boroughs would suffer from people being reluctant to travel the—often short—distance across the border to use that particular business.
That would have an impact on drycleaners, pubs, takeaways, shops, hairdressers and more. Those are the exact same businesses that have been hardest hit as a consequence of covid. The Mayor of London’s financial stability plan, which was published in January, proposes a seven-days-a-week charge of £3.50 for all motorists using a vehicle registered outside Greater London, rising to £5.50 for the most polluting vehicles.
Sadiq Khan is looking at building a literal financial wall between London and its neighbours. The proposal would divide communities and set London against all others. It is a border tax that has been called various things: Checkpoint Chigwell, Labour’s Dartford car tax, and many other things that are unrepeatable in this Chamber.
More than 26,000 people have signed a petition against Labour’s Dartford car tax, and I pay tribute to Tom Oliver and Kyle Stealey in my constituency who have organised that. The Mayor of London claims he needs to do this to offset the fact that Londoners cannot keep the £500 million per year they pay in road tax. However, no other area gets to keep the road tax they pay either. Although it is true that Highways England does not own a great number of roads in London, it does not have many roads in some other areas too; London is not alone in that.
Is the Mayor of London claiming that Londoners do not drive on motorways? Of course they do, and of course those have to be paid for. It is as if the Mayor of London is saying, with this proposal, “Give me even more money, or look what I can do. I can ruin you. I can hit you financially and make you pay if I don’t get my way.” That is effectively what the Mayor of London is saying. This proposal sends out the clear message that far from London being open, as the Mayor claims, it will be very much closed for motorists entering the capital.
It is laudable for any mayor to lobby for more funding, and I fully understand why Sadiq Khan wants to raise more finances. Every mayor around the country is trying to do the same thing, but it should not be attempted on the back of blackmail that says, “Give me money, or I will ruin you.” He is saying, “I will charge you to visit loved ones. I will charge you to drop somebody off at the local railway station. I will charge you to use London’s small businesses, and I will charge you just for driving out of your road.” That is not laudable; it is an abuse of power.
The border around London is not neat, and does not run along major routes. Instead, it straddles residential roads. In Dartford, for example, there are residential roads that are located in Kent and it is not possible to drive out of them without entering the London Borough of Bexley. We have a number of roads like that and there are also roads where the border literally goes down the middle of the road, so someone drives out of the road in Kent and back into it in London. We have a park home situated in Kent, and the only exit from it is in the London Borough of Bexley. Each of those journeys by a motorist would, of course, incur the proposed charge.
Many of my constituents would therefore face paying at least £3.50 a day just to drive out of their own roads. The proposal is for the charge to apply seven days a week, so hundreds of my constituents will pay over £1,200 a year just to be able to drive out of the road where they live: £1,200 a year just to get out of the house. For thousands of others, it would mean a £3.50 charge just to visit loved ones, to drop a child off at school, to visit a hospital, or to go to work. So many frontline workers in London live in neighbouring counties. These are the people who keep London functioning. They too will be hit with this charge.
I would argue that integration along the border between Kent and London is currently excellent, but the Mayor of London wants to change that. He wants to levy a charge on people, yet he is unaccountable to those people. The people who would have to pay the daily charge cannot vote him out or do anything to stop the charge, and he knows it. It is taxation without representation, taxation without accountability, and it needs to be stopped.
Dartford is not part of London. We are proud of our Kentish heritage. Yet many people who are now Dartfordians used to live in London. Many of us commute to London—obviously, I am one of those people. There is a good relationship with London and with the neighbouring counties, but the Mayor of London wants to change that. He wants to set London against its neighbours, but in doing so he damages not just the people who live outside London, but the people who live in London.
Businesses in outer London will see so many of their customers put off spending money at their establishments because it will be too expensive to travel to them. No wonder YouGov found that the majority of Londoners—Londoners—oppose the proposed charge. It is claimed that the opposition to the proposal is timed to marry up with the London mayoral elections. Actually, the proposal’s timing is completely down to the Mayor of London. He decided when to announce the proposal; he is responsible for the timing and he published it in a document just the month before last. So it is hardly surprising that we are having the debate at this time. It is hardly surprising that, come March, we are now talking about the issue.
If the proposal goes ahead, it will have the most profound impact on Dartford of any governmental action. It will be taken by somebody who Dartfordians have absolutely no control over. The London Mayor knows that the ring of seats around London, with the exception of Slough, are Conservative. He also knows that, generally, outer London areas—there are some exceptions—are more likely to vote Conservative than inner London seats. He knows who he is hitting with this idea. It is the most divisive issue ever conceived by a London Mayor and it needs to be stopped. It will have a profound impact, not just on the counties around London, but on the outer London boroughs. It is an abuse of power and it needs to end.
It is a pleasure to serve under your chairmanship, Ms Rees. I thank my hon. Friend Gareth Johnson for a superb speech. My constituency is neighbouring his. Although we do not have as extreme a situation, his point that the borders of London are not neat is very apt. That really does reflect the position of many of my constituents. I will read a couple of quotes from emails I have received:
“I have elderly grandparents who reside within Greater London… I often go to their aid, bringing shopping or medication or (before covid) visiting to keep them company.”
“Would it also be possible for Adam— that’s me— to talk to Kent County Council to charge London motorists to drive on Kent roads?”
As I said, although we do not have the same situation as my hon. Friend the Member for Dartford, we have large numbers of people who work in hospitals and travel to large retail in Bexley. We have plenty of people who, as their families have expanded, have moved out of south London into towns such as Gravesend. We have large numbers of building contractors who have no choice but to drive their vans into town. Many of my neighbours work in the hospitality industry and have suffered so badly commercially over the past few months. They drive in and out because they have antisocial hours.
Please will the Minister ask my old friend the Mayor to think again on this? It will cause massive inconvenience and cost huge amounts of money to lots of people here, who are just trying to live their lives and do their jobs.
It is a pleasure to serve under your chairmanship. Ms Rees. I apologise that I have not been able to log in in the usual manner, so I am using my telephone. Sorry for the sub-optimal reception.
Like my hon. Friend Adam Holloway, I am grateful to my hon. Friend Gareth Johnson for raising this issue, and for the leadership he has shown in the strength of the petition that has raised, in Dartford alone, more than 26,000 signatures, as I understand it.
All I want to do is echo the points my two hon. Friends have made. I particularly emphasise the divisive nature of the charge for the community I represent. Banstead, Chipstead, Hooley, Netherne and Woodmansterne tend not to look to the centre of the Borough of Reigate and Banstead, to the towns of Redhill and Reigate. Quite naturally, they tend to look north, to Sutton and Croydon. Indeed, many people in that part of the constituency have grown up with their family and work being located in those boroughs, and have then moved out as time and opportunity have presented themselves, to get out of the centre of Sutton or Croydon. However, their lives and connections very much remain across the London boundary. I have received letters from people whose children’s schools or jobs are affected. In one family, the mother has to cross the boundary every day to take children to school and the father has to cross it every day to go to his job in in Wallington.
People have tended to look to those town centres to shop, or their GP, pharmacy or dentist may be there, and given the pattern of people’s lives many of their relatives are there as well. One family has written to me, having now been alerted to this issue. It is not a charge of £3.50 for the odd day of the year; it is £22.50 every week for both of them. So it is in the order of nearly £45 for them every week, which is an enormous cost to put on people’s lives, simply because they suddenly find themselves adjacent to a boundary. This measure will do profound long-term damage to the relationships of the people who find themselves living just outside the London boundary and it will also do grave damage to the businesses just inside the Greater London boundary that are used by those people.
I urge the Mayor not to proceed down this road and I urge my hon. Friend the Minister to ensure that he does not do so. This is a singularly bad idea. I realise that the Mayor is in deep trouble because of the nature of the Budget, but that should not be visited in this reckless way on those people who live in the communities neighbouring Greater London.
It is a pleasure to serve under your chairmanship for the first time, Ms Rees.
The proposal by Sadiq Khan to impose an outer London boundary tax is one of the silliest ideas that he has come up with in the past five years. Some of his defenders have said that it is about improving air quality, but that is nonsense. This proposal has absolutely nothing to do with improving air quality.
Transport for London knows where the bad air is in London; indeed, it has published the analysis it made when considering the creation of the ultra-low emission zone some years ago and it is still available for anyone who wishes to see it. That analysis is in the form of a heat map, which shows the bad areas for air quality inside Greater London. Unsurprisingly, they are around central London, around Heathrow airport and on some of the trunk roads into and out of London. Where the bad air demonstrably is not is in outer London.
This proposal is, purely and simply, a revenue-raising exercise. Since the Mayor will aim it squarely at people who do not live inside Greater London and who therefore have no say or vote in the matter, it is—as my hon. Friend the Member for Dartford has said—effectively “taxation without representation”. There is a huge democratic deficit here.
However, just because the people forced to pay this charge do not live in Greater London does not mean that it will not have an impact on those who do live inside Greater London. As other hon. Members have said, this proposal would deliver a hammer blow to outer London’s businesses. They rely on suppliers and customers driving in from outside the local area to shop and work, and this measure would jeopardise people’s livelihoods and our recovery from the pandemic.
It is not just those working in or using our local businesses who will be impacted. Those who provide our public services will also be hit; 51% of Metropolitan police officers and 52% of London firefighters live outside the Greater London boundary. They work shifts and often have to drive to work, as do almost 3,000—more than one in five—of the employees of my local NHS trust.
A few weeks ago, I wrote to headteachers in all the schools in my Orpington constituency, to seek their views on the charge and to find out how many of their staff and pupils would be impacted by it. A great many have written back to me, all of them expressing serious concerns about the detrimental impact it would have. A common concern has been the impact it would have on teacher recruitment and retention. One headteacher commented: “For us as a school this equates to 40% of our teaching and leadership staff and 33% of our administrative staff. To penalise staff by imposing a £3.50 daily charge would undoubtedly add financial pressure to individuals, but would also negatively affect recruitment from Greater London boroughs such as Bromley. I honestly believe that if this proposal is to go ahead, it will have a profound effect on recruiting and retaining staff in Greater London boroughs. Some of these staff are young, who took advantage of relatively lower housing costs to purchase outside the Greater London area. For them and others, this additional daily cost will be particularly hard. There is no serious public transport alternative to use, and therefore this will be a severe blow to those who are impacted. It will feel like a tax on work.”
Another observed: “For our full-time staff the additional cost will be like a salary reduction of £1,000 per annum. This will make us less competitive in terms of recruitment relative to schools in Kent and Surrey, or those who have public transport close by. This potentially would result in some families not being able to afford to bring their children into school, some of whom are deemed vulnerable children.”
Finally, I had a letter unprompted from another constituent. It is worth quoting this at length: “I am a teacher. I have taught in Orpington for 22 years. This charge will affect me and other workers every single day. This charge might be appropriate for inner London, where there are alternative means of transport, but that is not true here. We do not have a good, reliable bus service. We do not have the tube. With a newly unemployed husband and a family, this is a cost I just can’t bear and one that is grossly unfair, given the lack of available alternative public transport. I doubt Orpington High Street and the Nugent retail park will survive if shoppers from Swanley, Dartford and other surrounding areas put off by the charge cease to come.”
Sadiq Khan has been Mayor of London for five years, and for most of that time City Hall has been an achievement-free zone. There has been lots of virtue signalling, a good deal of showboating, and lots of finger pointing and blame shifting, but in terms of the core deliverables—building houses, running a transport system and keeping people safe—the past five years have been marked by ignominious failure. One thing that he has said has struck a chord, however. His “London is open” slogan is a sentiment that previously united Londoners and the surrounding areas, but introducing such a proposal shows how empty that slogan is. London is not open if people are taxed whenever they attempt to enter it.
There is no denying that under Sadiq Khan’s leadership, TfL’s debt has risen to record levels, key infrastructure projects have been delayed or cancelled, the delivery of Crossrail has been bungled, and hundreds of millions of pounds of potential income have been thrown away on pet projects. It is simply not acceptable for him to look to recover his losses by imposing a damaging border tax. He should drop this silly proposal immediately. If he refuses, I will call on the Government, in common with colleagues, to remove his power to impose it.
It is a pleasure to serve under your chairmanship, Ms Rees. I join others in congratulating my hon. Friend Gareth Johnson on initiating a much-needed debate on the proposed outer London tax. I congratulate my hon. Friend Gareth Bacon on laying out London MPs’ concerns about the impact of any proposed tax being imposed in such a way.
We should be clear about why the tax is being proposed. It is not to clean up the air in London or to make travelling around London any easier—far from it. It has come as a direct result of the Mayor of London’s failure to control TfL’s spending and to balance its books. It is fair to say that TfL’s finances have of course dropped as a result of covid. When TfL’s finances are dependent on fares income, which has fallen by 90%, gaps emerge. It is also fair that the Government have provided grants to enable TfL to continue during the pandemic. As we come out of the pandemic, we will then have to look at what happens going forward.
I and most of my constituents live on the outskirts of London, and we have enjoyed a position whereby waves of immigration have taken place from inner London, to the suburbs and beyond, so families are stretched out across the south-east of England. The reality is that those families want to come together, and not only for family celebrations but for jobs, schooling and other opportunities to get together, and equally for business.
The harsh reality is that over the past few years, businesses in the outer London areas have tended to migrate outside Greater London and set up around the M25. Those businesses have already migrated. If an outer London tax were to be introduced on crossing the Greater London area boundary, the impact would be to encourage even more businesses currently based in outer London to transfer out of London completely. That would have a knock-on effect on business rates income, where business rates continue, and on the number of people coming into London in any case to work. So clearly that would have an impact.
There is another impact. I have Stanmore station in my constituency, which is the terminus of the Jubilee line, and more than 350 vehicles from all over the area use the station car park on a daily basis. Drivers from Bushey, Radlett and other parts of outer London start their journeys into central London from the station. As we know, during the pandemic the view has been that people should work from home where possible, and I predict that in future more people will work from home more often. Preventing people driving to the terminus of the tube network will reduce TfL’s finances still further as we emerge from the pandemic. It is a short-sighted approach. There are, of course, termini outside the Greater London area. The likelihood is that people will drive to those areas in order to get on the tube network and get into central London if they have to, so this is a self-defeating proposition.
We also have those who come to celebrate with their relatives and their religious communities, for example at festival times. They would all be disadvantaged—charged —for the privilege of driving their car into the outskirts of London. All in all, this is a bad idea and one that needs to be roundly defeated.
Of course, the suggestion is that the Mayor of London would love to have the vehicle excise duty retained in London. Just imagine if the west midlands, the north-west of England or any other part of the country said the same thing. Would we then have taxes for London drivers driving outside London, and taxes for those driving into London? It would eventually end up as a cash cow for local authorities. It would not advantage anyone in relation to improving air quality or connectivity.
It is a good idea to have this debate and I hope that the proposal will be dismissed. I hope that the Minister will make it clear in her response that the Government will not allow this tax to be introduced under any circumstances.
It is a pleasure to serve under your chairmanship, Ms Rees. I congratulate my hon. Friend the Member for Dartford (Gareth Johnson) on securing this important debate.
As we have heard, the Labour Mayor of London’s plans to charge people to enter the Greater London area by car would be a disaster felt both by those who live just outside the boundary and those who live in communities such as mine, just within it. The Greater London boundary is not a great and obvious spectacle. London is not Las Vegas; there are not roads covering great expanses of nothingness. Motorists do not go through deserts or deserted countryside and suddenly drive up to some great metropolis—suddenly, there they are; they have arrived in London. I am afraid that crossing the border is, frankly, quite underwhelming. Very few people would know or care that they have crossed an arbitrary line that was drawn in 1965.
Carshalton and Wallington sits on the border with Surrey. The two roads leading directly out of my constituency into places such as Woodmansterne and Banstead, and beyond into Reigate, Redhill and Epsom, are not great thoroughfares. There is nothing about them that signals that some great line has been crossed. Indeed, Carshalton Road to the south is fairly narrow, with a few houses dotted along the way down to Woodmansterne, with home on one side of the border and a country lane on the other. It is fairly unassuming.
Under the Mayor of London’s plans, that quiet little spot would suddenly become some kind of outer London checkpoint or toll road. Residents living just on the wrong side of the line would be charged up to £5.50 a day for driving across it. While I am on the subject of the charge, whether we are talking about £3.50 or £5.50 is a moot point, frankly. TfL’s estimate is that up to 82% of the expected revenue would be lost in the overhead and implementation, so there is likely to be pressure to increase the charge from day one in order to make the scheme worthwhile.
Although residents living inside the boundary, such as my constituents, might not be the ones facing the charge, the impact could be equally damaging, not least on family life, as many hon. Friends have said. Like many families, my dad and several of my relatives live just outside the Greater London boundary. Suddenly, they will be charged for crossing the boundary to come and visit. We also need to think about families who rely on another family member for childcare, who could be charged up to £1,000 a year. That is not to mention the hit that it could have on the economy and our public services. As we heard from my hon. Friend Gareth Bacon, 51% of Metropolitan police officers live outside London. Who on earth would pay to cross the border to go shopping in constituencies such as mine when they could look elsewhere in Surrey without being charged at all?
One of the issues that this proposal could end up having the greatest impact on is health. It is fantastic news that the Government have given the go-ahead to a £500 million investment to improve Epsom and St Helier University Hospitals, and to build a new third hospital in Sutton, which will benefit patients not just from Sutton and Merton but from Surrey. However, patients, NHS staff and visitors coming to the new Sutton hospital from Surrey would face a daily charge to cross the boundary. It is no good saying that people will find alternative methods of transport. Public transport between outer London and the home counties is notoriously poor, because TfL and the county councils do not have good working relationships with one another. Bus services from Sutton into Surrey are not nearly frequent enough, and there is absolutely no discussion of funds being used to address that.
There is another weakness shown up in the plans. As my hon. Friend the Member for Orpington pointed out, this is purely a money-making scheme; it is not a green initiative. The idea came from a financial sustainability plan, not an environmental policy announcement. Even if people could afford to go on to a purely electric vehicle, they would not escape the charge. As many colleagues have said, the Mayor of London has said that he will drop the idea if he can retain the £500 million of vehicle excise duty. That demonstrates once again that this is about money, not the environment.
The policy has generated a lot of concern from my constituents. The outer London boundary charge would hit families, the economy and our public services, and would punish not just Londoners this time but those who live just outside the capital too. I am really pleased that our Conservative London Assembly candidate, Neil Garratt, has been supporting Shaun Bailey in opposing this move. I urge the Minister to do all she can to ensure that the Mayor scraps the plan and does not punish Londoners for the cost of Khan.
It is a great pleasure to serve under your chairship, Ms Rees. We are here today because of the failure to give Transport for London the long-term support it needs to keep London’s public transport financially viable. If it cannot survive financially, public transport in London will grind to a halt, and frankly so will London. The Government’s failure to support the finances is yet another sign that they are ignoring both the needs of hard-working Londoners and the role that London plays in the UK economy.
From scrapping the Government grants in 2015, to trying to scrap free travel for under-18s last year, refusing to devolve train travel to London because the then Transport Secretary did not want it in “the clutches of” a Labour Mayor, or sitting on their hands over Hammersmith bridge, successive Conservative Governments have a long record of simply refusing to give the UK’s capital city the support it needs to keep moving.
London’s Mayor, Sadiq Khan, has not only been standing up for London; he has also been cleaning up the mess left behind by his predecessor, who is now Prime Minister. Because of this funding history created by Conservative Governments, TfL is almost totally reliant on fare sales. I am proud of Sadiq Khan’s record on public transport over the past five years. He not only opposed efforts to cut free travel for under-18s, but has worked to introduce new, cleaner, low-emission buses, to cut the deficit at TfL, and to support much-needed action to clean up toxic air pollution, including here in my constituency.
By the start of 2020, the Sadiq Khan had fixed the financial mess left by his predecessor, who had raised fares in London by 42%. He also inherited a TfL that was making a loss of £1.5 billion on a like-for-like business. He reduced TfL’s operating deficit by 71% and increased its cash balance by 13%, ensuring that it was in a strong financial position prior to the pandemic. That is despite the fact that London was one of the only major cities in the world without a Government grant for day-to-day transport operation. For instance, Madrid gets 47% of its operating income from national and regional subsidies; Singapore gets 56% from Government grants; and Paris gets 16%. As with all the world’s major cities, London’s transport network is vital for key workers and business. It has kept our NHS workers going into work, it has kept supermarkets staffed, and it has kept our city moving.
The pandemic has had the same devastating effect on TfL’s finances as it has had on the failing privatised rail companies, yet the Government immediately bailed out those companies, handing out 18-month support packages to keep rail moving, with next to no strings attached. The same was not done for London, and there is simply no reason why that could not have happened. The Mayor has asked the Government to consider another option for funding London’s transport: to let London keep the £500 million in annual vehicle excise duty, which is spent almost exclusively outside London, but the Government will not countenance that.
Because of the lack of any alternative option, Mayor Khan is proposing a Greater London boundary charge for non-residents, which would apply only to vehicles registered outside Greater London that are driven into the capital. The charge would apply only once a day, when vehicles are driven across the Greater London boundary, and Londoners would not pay. A thorough public consultation process and impact assessment would be required before any charge could be introduced. This would take at least two years, meaning that any new charge would not be levied until after the capital’s recovery from the pandemic.
I accept that this proposal is not ideal and that it is quite a crude measure, but it is better than the impact of public transport in London grinding to a halt; an impact that would be felt not only by all Londoners, but by commuters from the constituencies of the hon. Members who have already spoken. London does not get any income from drivers from outside London who drive into the city. That is despite 1.3 million vehicle trips being made every weekday from outside London into the capital, which is about 25% of all journeys. Around 1 million of these trips are into outer London alone; 80% of car trips from outside London into the capital terminate in outer-London. The majority of those journeys are made by vehicles registered to addresses outside the London boundary, which highlights that drivers from outside London greatly benefit from using the capital’s roads, but without having to contribute to their upkeep.
Initial estimates suggest that such a boundary charge for non-residents, if levied at £3 50 a day and applied only to non-Londoners, could reduce the total number of weekday car trips across the Greater London area by 10% to 15%, and the vast majority would switch to more sustainable modes of transport. You could charge more. For example, £5.50 for the more polluting vehicles—those that do not meet the ultra low emission standard—is a possibility, although I am not proposing that. However, assuming two-way journeys in and out of London, total traffic coming off the road each weekday could reduce trips by around 250,000 to 400,000 vehicles, with the amazing associated air-quality benefits.
In conclusion, all of the UK deserves and should expect decent transport and decent public transport. The more good quality, affordable public transport there is, the less we need to be dependent on the private car, leaving the space available for those for whom a private car journey is the only option.
Public transport has to be paid for somehow. If this scheme goes ahead, I do not think that asking those drivers not paying the London council tax precept to pay a bit more towards the costs of running London’s transport network and contribute to the cost of the congestion and pollution they cause is unreasonable.
It is a great pleasure to serve under your chairmanship for the first time, Ms Rees. It is also a pleasure to follow Ruth Cadbury, who is the first Labour Member of Parliament who has been willing to speak on this issue on behalf of the Mayor of London to give us an alternative perspective. I thank her for that.
I also thank my hon. Friend Gareth Johnson for bringing this debate this afternoon. It is welcome because many of the issues surrounding the Greater London Authority and, indeed, the Mayor of London are devolved issues. We are often told on the Floor of the House of Commons that we cannot discuss them because they are devolved and that the London Assembly is the place to scrutinise and hold the Mayor accountable. We have seen in places such as Scotland, a one-party state, in Wales, where failure is abject, and now in London that devolution has simply failed. This is another example of that failure. First, the whole system of the GLA is set up so that it is rigged, so that the Labour party has an in-built majority, and secondly, the budget can never go through on a simple vote. The Mayor always gets their own way. It is good that we have the opportunity to raise such issues this afternoon.
Ever since the Mayor was elected five years ago, he has persistently and consistently said, “I need more money,” and has put his hand out to central Government on every single occasion. Threatening to blackmail Londoners, particularly in the outer London boroughs, has been the way he gets his own way. Seeking to have the vehicle excise duty is just crazy. He says he needs £500 million a year, but VED is not a hypothecated tax; it is a tax that pays for the whole country. The point has already been made that many Londoners, including myself and other hon. Members here, drive in other parts of the country. How long is it before we are being asked to pay to drive on motorways outside London?
The whole proposal sets a dangerous precedent, and it is divisive. It has also been said that this is taxation without representation for people outside central London. It is an open secret that Mr Khan does not care about the outer London boroughs. However, he knows that this border tax would fall entirely upon those who live and work on the periphery of the capital; people who, as it has been said, traditionally do not vote for the Labour party or, indeed, for the Labour Mayor. These are the people who will end up paying for the Mayor’s failings and that is simply not fair. Any proposal would be a tax based on a person’s geographical location and not on their ability to pay or as a choice over what they buy. I do not think that this is the progressive taxation that we heard of in the past when Tony Blair was Prime Minister. It is simply an opportunity to grab as much money as possible.
It also is not fair because it discriminates against businesses that are on the other side of a border, rather than competing on an open playing field. They would be unfairly discriminated against and it is simply not fair. Many of my constituents have children who cannot afford to buy properties in the Hendon constituency. That could be attributed to the Mayor and his inability to construct affordable housing in the area, but that is a debate for another day. Many of those people return to their parents, particularly those in the Jewish community, who visit their parents for the Shabbat meal and will, no doubt, be responsible for paying an additional tax to visit their parents. A tax on visiting friends and relatives is unfair and unacceptable.
Those in public services have also been discussed, and teachers are one group that particularly comes to my mind. Many of my teachers actually do not live in the Hendon constituency because of the prohibitive cost of housing, and many live outside the London borough of Barnet. These people, who are on starting salaries of about £25,000, would find that they have to pay this additional tax just to enter their place of work each day. It is simply not fair.
In the past five years, as I have said, the Mayor has consistently said that he wants more money and that he wants the Government to pay for it. The fundamental problem with the tube and TfL is that it needs an alternative funding method. The way that it currently operates does not work. We can look at countries such as France, with the Paris metro, or Singapore, as has been mentioned, and indeed Tokyo, and we can recognise that they have mechanisms in place that allow them to raise revenue to provide services without a disproportionate effect on passengers and without disproportionate costs on people who do not use those same passenger services. We will continue to oppose this. I would certainly join some of my colleagues in calling on the Government to stop the Mayor from implementing such a measure.
I am pleased to be working with colleagues at the London borough of Barnet such as Roberto Weeden-Sanz, who is working to oppose this charge. I hope that in Roberto we have a GLA representative who actually holds the Mayor to account, because thus far we have not had one, and we do need to do that.
It is a pleasure for me to serve under your chairship for the first time, Ms Rees, and I am grateful to the Chairman of Ways and Means for enabling my participation in this important debate this afternoon. I thought the hon. Members for Dartford (Gareth Johnson), for Gravesham (Adam Holloway) and for Reigate (Crispin Blunt) struck the right tone in opening the debate. They engaged constructively, if critically in their case, with the proposals put forward by the Mayor, raising a range of concerns that ought to be taken into account. Indeed, were this measure to be put forward by the Mayor as a formal proposal, it would be subject to extensive consultation, no doubt taking years, rather than weeks and months. Hopefully, if the proposal were to go ahead, it would take into account some of the specific challenges they mention regarding smaller communities, access to which relies on crossing borders between London and neighbouring counties, and the issue of key workers, for whom there would surely have to be some subsidy.
I am afraid that London Conservative colleagues rather gave the game away with their contributions that struck a far more party-political tone. Hats off, though, to Elliot Colburn, who managed to remember the name of the Conservative candidate for Mayor of London. I noticed the other London Conservative colleagues did not mention him, presumably because they got the memo that the Conservative party have dropped funding and are not really supporting the dead horse in the two-horse race.
Gareth Bacon launched quite a partisan attack on the Mayor of London, asking what he had achieved. I will not try your patience, Chair, by listing all of his achievements, but they include reducing air pollution by a third, starting to build more council homes than any Administration since 1983, putting 1,000 more police officers on the streets to replace those cut by the Conservative Government, and actually investing more in fighting crime than any other Mayor.
Bob Blackman decided to flog another dead horse, which was this ridiculous claim that somehow the reason TfL’s finances are in trouble is because of the Mayor’s administration of the finances. In fact, in his first term as Mayor up to 2020, Sadiq Khan reduced the operating deficit of TfL by 71% and increased cash reserves by 13%, while at the same time introducing the popular hopper fare and managing to freeze fares run by TfL. Contrast that with his predecessor, our current Prime Minister, who raised fares by 42%, yet handed over a TfL loss of £1.5 billion a year. So let us not pretend that the financial challenges facing TfL are not mostly as a direct result of the pandemic, where we saw costs to TfL of up to £600 million a month during the height of the pandemic, fare income falling by 90%, and we will see ongoing long-tail challenges as a result of the pandemic. That is really what is going on here. The ludicrous charge that somehow this is because of decisions taken by the current mayor, and that is why TfL is facing financial difficulty, is just nonsensical.
We heard from Dr Offord the bizarre idea that decision making is rigged. It should not have to be explained to politicians: if they do not like the fact that we have a Labour Mayor and a Labour-dominated Assembly, they should be better and win elections. Goodness knows from the Opposition Benches that we are having to learn that lesson the hard way nationally. I am afraid that really is the case: if politicians want to run London, they should win elections by putting forward better candidates and making better arguments.
I am afraid that appeals to the Minister that if London Conservatives or neighbouring Conservatives do not get their way, the Government should intervene and stop the decision of the Mayor of London, are not the way to go. Again, we cannot devolve power. That cuts both ways: there are plenty of places where there are Conservatives in Government, or the SNP north of the border, and where they make decisions all the time that we do not necessarily agree with, but I would absolutely defend the right of people in local government or devolved Governments to make decisions on behalf of their communities.
In my remaining minute or so, I want to make a broader appeal, which is a hard thing to achieve when there are elections looming. As MPs across London and the south-east, we need to have a better-quality conversation about what we do about the finances of Transport for London and the relationship between London and the south-east and the rest of the country. As my hon. Friend Ruth Cadbury mentioned, London is one of the only major cities in the world that does not have any kind of direct operating grant from central Government. We recognise that the Government have provided some funding and support to TfL during the pandemic, but we should all recognise that there are significant strings attached. It was a genuine mistake by the previous Mayor of London to negotiate away TfL’s direct operating grant. That left £700 million out of TfL’s finances—a 40% reduction in external funding. That decision ought to be revisited, if nothing else but for the period in the years immediately after the pandemic, because it is clearly going to take TfL’s finances some time to recover.
The final point I want to make by way of appeal—I am sure hon. Members have heard this in debates in the Chamber and Westminster Hall—is that there is an increasing anti-London and the south-east sentiment. Often it is characterised as an anti-London sentiment, but I think Members from across the south-east would recognise this too. If we are going to level up in this country, and I absolutely believe that we must and should, that means levelling up, not doing down, the beating heart of the UK economy, which is London and the south-east. If our economy is going to bounce back, it relies on the economic strength of London and the south-east.
Of course we want to see prosperity shared, of course we want to see opportunity enjoyed right across the country, and of course we need to make sure that communities across the rest of the south, the midlands, the north and, indeed, Scotland and Wales also receive their fair share of support and investment and are equipped to grow their economies in order to make a greater net contribution to UK plc overall. If levelling up for others means levelling down for London and the south-east, however, that would be an extraordinary act of self-harm to the UK’s economy on the part of the UK Government. It would be a terrible mistake.
We have to view some of the challenges in that national context, recognising that it is not always easy when we have a Mayor from one party and a Government of a different party, but if we are going to genuinely build back better, and build back a fairer, more prosperous country in the aftermath of this pandemic, the national success will be heavily reliant on the success of London and the south-east. That is why I appeal directly to the Minister in the hope that we can have a more constructive discussion between central Government and the Mayor of London, so that we can avoid some of the challenges that colleagues, particularly those from Kent, have raised this afternoon, but also make sure that we are building a stronger and fairer United Kingdom in the aftermath of the pandemic—driven by London, but with London not being the sole beneficiary.
It is a pleasure to serve under your chairmanship for the first time, Ms Rees, and I thank Gareth Johnson for securing this timely debate. I also thank my hon. Friend Ruth Cadbury, who exposed the real situation and raised genuine concerns about air cleanliness and air quality, and my neighbour and hon. Friend Wes Streeting, who laid bare the facts of what is really a Tory transport delusion.
I note that Dr Offord said that London’s electoral system is rigged in favour of Labour. The two terms served there by our current Prime Minister might point in the opposite direction. Indeed, TfL’s financial woes began under that previous Mayor of London. Perhaps the issue is that the current Tory candidate is about to get crushed in the upcoming election.
I would like to thank Adam Holloway who showed his fantastic choice of tie and Windsor knot skills. Unfortunately, he shed very little light on the facts of the debate. Crispin Blunt, as a military man, will surely see this debacle from the Department for Transport and the Government for what it is: a political improvised explosive device designed to blow up the Mayor of London.
What we have heard today is nothing more than a highly politicised attack on the Mayor of London, just weeks before the mayoral election. Far from being wasteful, the Mayor has been held over a barrel by the Government and forced to consider any and every option left available in order to keep afloat one of the world’s greatest transport networks. The fact that it has reached this point is frankly shameful.
I hope we will hear from the Minister whether the Government will finally give a long-term funding commitment to TfL, or keep stringing it along with piecemeal funding that serves only to kick the can down the road until a meaningful agreement is reached. Perhaps that is why so many Conservative MPs are here today. Perhaps they, too, would like to see the Government do the right thing, rather than simply using the Government’s chronic underfunding of TfL in the middle of a pandemic as a stick to beat the London Mayor with.
I will address some of the fundamentally misleading statements that we have heard today. First, the proposal for an outer London congestion charge is far from set in stone. TfL is currently in the process of carrying out an early feasibility study; no decisions have yet been taken to implement the charge. If a decision were taken to pursue the idea, clearly an extensive public consultation and detailed economic and environmental impact assessments would have to be undertaken.
It is clear at the moment that the key issue we want to focus on is a long-term funding deal for TfL, which would mean such options would not need to be considered. That is perhaps something on which we could all agree. I again point out that there would be no need whatsoever for a Greater London boundary charge if the Government supported the calls from the Mayor of London to allow the capital to keep its share of the vehicle excise duty, which is roughly £500 million a year.
If we gave TfL the level of revenue in capital funding it had for the first 20 years of its existence, that would be a game changer. Let us not forget that it is the current Prime Minister, the previous Mayor of London, who negotiated away the direct operating subsidy in 2015. That ensured that the brutal austerity measures of the then Chancellor George Osborne, inflicted on councils and the rest of the public sector from 2010, were also applied to Transport for London, literally robbing our country’s transport Crown jewels in front of the eyes of Londoners.
Let us focus on vehicle excise duty for a moment. Every year, Londoners pay £500 million in VED, money which is spent almost exclusively on roads outside of London. We, therefore, have the nonsensical situation whereby road maintenance in London is in effect subsidised by people using public transport. To put that another way, tube users pay for car drivers. I would like to know if the Minister agrees that City Hall should be allowed to keep the VED.
Will the hon. Gentleman concede that people do not just use one mode of transport? Car drivers also walk, cycle and use public transport, so they pay into the public transport system. The idea that car drivers are being subsidised by public transport users is further undermined by more than a £1 billion of subsidy that Transport for London puts into the bus system and the other concessionary fares. Would he concede that that statement, which is often used and comes directly from City Hall, is misleading and wrong?
I think of lot of Londoners will disagree. Their money is spent elsewhere in the country. As I have said in the Chamber before, it would be good to see an agenda not of levelling down London, but genuinely levelling up the rest of the country’s transport networks, as needs to happen. As I was saying, I would like to hear whether the Minister agrees that City Hall should be allowed to keep that VED, which is paid by Londoners, so that it can be spent on their transport system. That seems only fair, given that London contributes over £40 billion net to Treasury coffers every single year.
Does the Minister agree that allowing London to keep its share of VED, so that TfL can invest in London’s roads and public transport services, is actually a very reasonable request, not least given the fact that the Conservative party at City Hall has supported that very position in a cross-party letter? Indeed, the hon. Member for Orpington (Gareth Bacon is on the record as having previously supported that position.
The letter to which the hon. Gentleman refers was written before this proposal was put in place, and this is not an either/or question. The Mayor of London is throwing up smoke and mirrors by saying that either vehicle excise duty is devolved or there is an outer-London charge. That is not the case at all. As chairman of the cross-party budget committee, I was obliged to sign that letter because the majority of the committee said that they wanted vehicle excise duty to be devolved, but that was before the Mayor of London called for this, so the two things are not related at all.
The point still stands that vehicle excise duty could be an answer to TfL’s financial woes; or, indeed, the Government could reach into their pockets and give our country support, bearing in mind what we have said about that £40 billion. When London does well, the entire country does well. If we can boost our economy and come out of this awful pandemic, London succeeding will also help millions of other people across the country to succeed as well.
As I have already made clear, no decisions have been taken on this scheme. In fact, no scheme has even been designed. Let us be clear: no scheme whatsoever has been designed and no decisions have been taken on the charge level, exemptions or hours of operation. As we all know, with the election just weeks away, Conservative Members here today are doing their best to whip up this issue and spread fake news. Londoners—in fact, their own constituents—deserve far better.
Let us talk about the facts. Every weekday, 1.3 million vehicle trips are made from outside London to the capital, burdening local communities with traffic and emissions. Of those 1.3 million vehicle trips, around 1 million are made to outer London. TfL informs me that prior to the pandemic, car journeys made by residents within outer London had been in decline in recent years, whereas car journeys to outer London from outside the boundary—in other words, by non-London residents—had been increasing over the same period.
What this all comes down to is the more fundamental choices about what has to be done. Do we all want a well-funded public transport system, with a diverse range of income streams so that it is not entirely reliant on fares, or do we think that it is acceptable to cut services, because otherwise that is where we are headed? Cutting services at a time when we are trying to incentivise people back to using public transport, as they return to work after having their vaccination and the economy begins to move again, would be completely and utterly counterproductive.
When it is safe to do so, we want people to enjoy everything that our capital has to offer. However, if they think that they will be packed in like sardines and that passengers will be rammed in—perhaps from Newbury Park in the constituency of my hon. Friend the Member for Ilford North, as I have experienced many times—they will not want to get on tubes or buses. They did not like that pre-pandemic and they certainly will not like it now.
I have also heard the argument that if fewer people are travelling because they are working from home, we should put up fares. That is clearly the preference of the Transport Secretary, who forced the Mayor of London to increase fares this year in order to access emergency financial support. The rest of us know, however, that if we price people off the public transport network, we run the risk of forcing them to use cars.
I also find it interesting to hear Tory MPs express outrage today, given what their own Transport Secretary said just last September, in a letter he sent to the Mayor of London:
“Given the significant rise in congestion in inner London, we also propose the extension of the central London congestion charging zone to cover the same area as the Ultra Low Emission Zone…and at the same time, October 2021.”
That would have been an extreme and unacceptable proposal, on the basis of what colleagues have said here today. It would also have meant that every journey within the huge area bounded by the north and south circular roads would have cost £15, in addition to the expanded ULEZ charge coming in from October this year, and all at a time when families and small businesses are still reeling from the covid crisis.
It was clearly totally wrong to suggest hitting Londoners with such an increase in charges, just as we are, hopefully, recovering from a pandemic. That is why the Mayor of London, Sadiq Khan, was right to reject it and right to stand up for Londoners. I stress again that even if a decision were taken to proceed with a Greater London boundary charge for non-London residents, it would take at least two years to implement. It is a last-ditch option, forced on TfL by the Government’s failure to provide long-term funding, which is the key issue.
Let me turn to a point I made earlier on the real reason for TfL’s current predicament. It was a Conservative Government under Chancellor George Osborne and the current Prime Minister, when he was Mayor of London, who agreed to the withdrawal of the direct operating grant. The then Mayor’s decision meant that the network became almost completely reliant on fare revenue, unlike comparable transport authorities in any other global city across the western world. When fares subsequently slumped because the covid lockdown meant no one was travelling, TfL’s income collapsed almost overnight. It is thanks to Conservative decisions in the past that TfL is left between a rock and a hard place, with no easy choices for the Mayor and TfL, having to fix the Tories’ mess and raise the vast amount of money required to make up that shortfall.
To add insult to injury, it is yet again a Conservative Government who are more determined than ever to force through a new era of cuts and the retrenchment of transport in the capital. That is unacceptable. The Mayor, TfL and businesses are united in knowing that would be completely counterproductive. Our capital city, whose economic contribution benefits the rest of the country immensely, is so much more dependent on public transport than elsewhere in the country.
The Government hold all the cards here. On behalf of all Londoners, I urge them to once and for all stop the politicking, put their hands in their pockets, properly fund our capital’s public transport network and allow London to keep its share of VED. If the Government fail to act, my advice to Conservative MPs here today and colleagues across London, including those who have spoken, is to direct their anger to the Transport Secretary and this Government. It is they alone who should carry the can. I have not heard one single word from them about an alternative. Their silence speaks volumes. London deserves better; indeed, Britain deserves an awful lot better.
It is a great pleasure to serve under your chairmanship, Ms Rees. I heartily congratulate my hon. Friend Gareth Johnson on securing this important debate. He and many other hon. Friends have put on the record their concerns at the Mayor of London’s plans to introduce a border tax for people and businesses travelling into the capital. We heard from my hon. Friends the Members for Gravesham (Adam Holloway), for Reigate (Crispin Blunt), for Orpington (Gareth Bacon), for Harrow East (Bob Blackman), for Carshalton and Wallington (Elliot Colburn) and for Hendon (Dr Offord), so we have a very good sense of the widespread impact of the concerns about this proposal.
The debate, rightly, has focused on the Mayor’s border tax. I will come to that in a moment, but behind this question lies a deeper concern that has been highlighted by many contributors, about the state of TfL’s finances, which brought us to this predicament. Let me say straight away that I do not doubt the impact that the coronavirus pandemic has had on TfL’s finances over the last year. I doubt any transport system in the world has emerged from the last 12 months unscathed, as people rightly heeded the Government’s calls to stay at home and the capital’s streets emptied. That is precisely why the Government have stepped in to help.
In May 2020, the Government agreed to support TfL with a funding settlement worth up to £1.6 billion. Following that, we agreed another settlement in October 2020, bringing the total value of financial support for TfL to more than £3 billion since the pandemic began.
It is worth pausing on that figure of £3 billion. Sam Tarry bemoaned the lack of a sustainable, long-term strategy. Three billion pounds has been provided to support TfL. It was confirmed in a statement to the House on Monday that this support would, once again, be extended, until May. I remind the hon. Gentleman that discussions are ongoing, to meet the exact call that he made—to put TfL’s finances on a sustainable footing for the long term. When we know how passengers are responding to the Prime Minister’s road map to safely unlock our economy, we can continue to work with TfL, as we have been doing throughout the pandemic, to once again explore what support it needs.
The issue, however, is that even before the pandemic, TfL’s finances were in a perilous state. As many of my hon. Friends have rightly said, years of mismanagement under the current Mayor left TfL completely unable to cope when the pandemic hit. By April this year, TfL expects its debt to reach £13.1 billion. The Mayor pursued ill-conceived policies designed to re-elect him, not to do what was right by Londoners. His fare freeze, which he was warned would have a devastating impact, has cost at least £640 million. The Mayor has failed to get a grip on pensions or excessive salaries. In short, TfL’s finances are out of control and we must tackle that, because people living outside the capital cannot be expected to keep picking up the tab for Sadiq Khan’s mistakes.
Unfortunately, rather than facing up to some of the difficult choices that need to be made to get TfL back on the path to financial sustainability, the Mayor has responded with politicking and measures that will punish working Londoners and their closest neighbours alike. Mayor Khan is increasing council tax by almost 10%. That means that the average band D property is now facing a council tax bill that is £31 more expensive than a year ago.
The other deeply concerning suggestion from the Mayor is that he might seek to introduce the so-called border tax that we have heard about today, which is a charge of at least £3.50 for every single vehicle that crosses into London. The Mayor seems to believe that London exists as an island, disconnected from the rest of the country. Nothing, of course, could be further from the truth. Just as London is critical to the success of the country, so the success of London is fed by countless thousands of individuals who commute to London from outside its boundaries.
An estimated 1.3 million vehicle journeys are made into London every weekday. Critical workers travel into the capital from the constituencies mentioned today, including that of my hon. Friend the Member for Dartford, to work in London’s hospitals, supermarkets and schools. These are the people who the Mayor proposes to punish for his financial ineptitude during his time in office. It is important not to underestimate the impact that such a border tax could have. A driver who travels into London every weekday could face a bill of almost £1,000 a year—devastating at a time when people and businesses are trying to recover from one of the worst economic downturns of the past century.
This would be a border tax levied on people outside London by a Mayor they were not able to vote for or, indeed, vote out. I am a firm believer that there should be no taxation without representation, as such a move would fly in the face of the Mayor’s supposed mantra that London is open. For that reason, I put it on the record that this is an idea that the Government do not support.
Under Sadiq Khan’s leadership, TfL’s debt has risen, projects have been delayed and income has been thrown away on pet projects. It is unacceptable that the Mayor will now seek to recover the money that these failures have lost by introducing a deeply damaging border tax on families and businesses surrounding London. I once again thank my hon. Friend the Member for Dartford for securing this debate and giving his constituents a voice in this House. As families and businesses rebuild, we need a Mayor of London who will support them by getting London’s finances back on the path of sustainability and who will stop threatening measures that could set London and, indeed, the rest of the UK back by decades.
My thanks to you, Ms Rees, for chairing this debate. May I also thank everybody who has contributed? It has been a constructive debate, with much of it centring on whether or not TfL and the Mayor of London are properly financed. Even if one concedes—which I do not—that they are not properly financed, this is not the right route to go down in order to raise funding. It is hugely divisive. It sets community against community and sets London against the others. It will create a literal financial wall right around London’s border. It is totally wrong.
If this policy is implemented, I wish businesses and public sector organisations in the outer London boroughs good luck in recruiting staff. We need to do everything we can to prevent it from being implemented. Raising revenue from people whom to whom the Mayor is totally unaccountably is the wrong way to raise taxation. It is taxation without representation; it is taxation without accountability.
That is why it is a fundamentally poor policy that has been ill thought through and will be devastating to my constituents and to ordinary people in Dartford and around the south-east who are just going about their daily business, going into London to visit friends and loved ones and to work and shop. Those are the people who will be hardest hit by this proposed charge, and that is why it is fundamentally wrong.
Question put and agreed to.
That this House
has considered the proposal for an outer London congestion charge.