This, I have to say, was a less-than-surprising piece of news.
The Daily Telegraph:
[London mayor] Sadiq Khan is extending London’s congestion charge to all zero-emission vehicles from the end of next year.
The move, which will extend the £15-a-day tax on motoring to battery-powered electric vehicles from Christmas Day 2025, was widely condemned on Tuesday.
Mark Harper, the Transport Secretary, said: “Taxing cars even if they’re zero emission shows Labour’s plan to use motorists as cash cows. If they get into government there will be worse to come, with pay-by-mile taxes and fuel duty hikes to help close their £2,000 tax black hole.”
For the extended “congestion” tax to come into force on a Christmas Day was an extra twist of the knife. Somewhere an unrepentant fan-fiction Scrooge is roaring with laughter.
Some electric-vehicle (EV) drivers are probably outraged. That’s understandable enough, but they should not be surprised. If London’s congestion tax, which has risen at a rate far outpacing inflation since its introduction, was ever about congestion, that has long since ceased to be the case. The reality is that (as I noted back in, uh, 2003) it is just another tax, now given extra impetus by the war against cars, a war from which EV drivers will not be exempted. And to the extent that it is a money-raising device, the revenue gap left by the switch from conventional cars to EVs will have to be filled. As I’ve written before, the best guess is that it is only a matter of time before a pay-per-mile tax is introduced.
This is is also likely to be the case in the U.K. as a whole. British drivers pay a heavy fuel duty when they buy gas, and that’s on top of VAT. Again, one way or another that lost revenue will need replacing. That is going to be a consideration in the U.S., too. The U.S. state which has the highest gas tax is, amazingly, California. California is also the state that currently has the highest take up of EVs, a number that the state wants to push higher through coercive regulation. One way or another, EV drivers in California (and elsewhere in the U.S. too) will be paying more tax.
When I wrote about London’s congestion tax in 2003, I warned “that some American municipality will probably give this dumb idea a try.” In the event, it took a while and it was New York State that tried to impose one on a part of Manhattan. To her credit, Governor Hochul recently had a last-minute change of mind. In the wake of her decision (which was influenced both by the proposed tax’s unpopularity and fears over what it might mean for Gotham’s downtown), CBS sent a reporter over to London to check out the effects of the congestion tax there. Some business owners . . . had views:
CBS:
Yahya Oz’s Central London restaurant is in the city’s congestion zone, an area about the same size as Manhattan’s Central Business District.
“It is getting very, very difficult to run a business in Central London,” Oz said. “It puts off lots of people driving through London” …
Michael Kill — the chief executive of Night Time Industries Association, representing 10,000 businesses in the United Kingdom — says he believes “without a doubt” that the congestion charge hindered the hospitality industry’s recovery from the pandemic …
Simon Thomas, chair of the Hippodrome Casino in Central London’s West End, says as the charge increased over the years, so too did the cost of doing business.
“We also have to pay for all of the delivery drivers, handymen that come in, workers. They just add the charge to their bills,” he said.
That price is often passed on to customer.
“New York’s dodged a bullet. It’s just another tax,” Thomas said.