Profits from the ULEZ – Taxes, Taxes and More Taxes

I have covered previously the likely extra income from the Ultra Low Emission Zone (ULEZ) scheme in London – see articles on this web page: https://tinyurl.com/y9sgwedh – particularly the one named “Cost of the ULEZ”.

Transport for London (TfL) tried to hide the likely income from the scheme and what figures they did eventually disclose grossly under-estimated the likely profits they would make. But the Guardian and the Times newspapers have recently published more information that is very revealing of the true facts.

The Guardian quote TfL as saying that “it projects that in 2019-20, the first year of the ULEZ, revenue will be £174m and costs £47m, producing a surplus of £127m. TfL are suggesting revenue will rise to £222m giving a profit of only £97m in 2021-22, after increased costs, when the ULEZ zone is greatly expanded to within the North/South Circular. That would seem to assume that a very large proportion of affected vehicle owners (e.g. those with older diesel or very old petrol ones) will have bought newer vehicles by then. It is a surprisingly low estimate given the very much larger number of vehicle owners who use them daily in the London suburbs as opposed to those who drive in central London. It again seems incredible.

As pointed out in the aforementioned article, apart from the approximately £200 million that will be taken out of the London economy and out of the pockets of London residents by the ULEZ charges every year for the next few years, there is also the cost incurred by those people who buy newer replacement vehicles. That is estimated at £203 million.

The Times spelled out exactly how many vehicles are likely to be affected by the ULEZ this year. They reported that TfL said there were 1.5 million diesel cars registered before 2016 which entered the central zone last year, some 500,000 petrol cars registered before 2006, some 400,000 vans, 55,000 HGVs and 10,000 coaches.

You can see that these are really enormous numbers and explain why the Mayor is so keen on using the ULEZ to improve London’s air. His latest claim is for a reduction of 45% in NOX in central London and 40% in the surrounding area with further reductions when the ULEZ is expanded in 2021. But there is no clear evidence that NOX has a significant impact on health (even COMEAP seem uncertain).

I suggest the ULEZ scheme is a giant con to raise more taxes to fix the Mayor’s budget problems. There is no major public health crisis in London as he alleges. Just to remind you, the health benefit was valued in the original consultation document on the ULEZ as being £7.1 million over 5 years. Even if one accepts that estimate which is very dubious, how does that justify a total cost imposed on vehicle owners of as much as £1.2 billion over 5 years? It cannot be.

Roger Lawson

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