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The Effect of the Congestion Charge On The London Economy

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  • Category: Economics

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This dissertation will be tacked from various angles. I will attempt to break down the whole argument and then evaluate whether or not the congestion charge has benefited the economy of London.

The Congestion Charge is a transport strategy. Its primary aim is to reduce traffic congestion that has been put in to operation in Central London by the current mayor of London, Ken Livingstone. It works by a motorist paying a £5 daily charge from Mondays to Friday between 7am to 6.30pm for drivers that wish to travel in an 8 square mile surrounding central London.(www.bbc.co.uk)

The programme has been has highly rewarding to government revenue and thus has had a beneficial impact on the London economy. It is expected to raise revenue between a hundred and thirty and a hundred and fifty million pounds over a single year, this figure excludes a further thirty million that could be made from penalty charges such as parking tickets.  (www.bbc.co.uk)

LONDON is the capital of United Kingdom, is a gateway for international investment and tourism to UK. It is also a financial centre of Europe, to sustain this particular role; it requires world class infrastructure and a transport system which maximises the city’s economic efficiency and the quality of life of its citizens.

From 1980 London’s resident population have risen over 16%, together with a strong economic and tourism growth resulting an extensive pressure on its supply of housing, offices, especially transport. Our London Mayor Ken Livingston has proposed a Transport Strategy to resolve this problem. This Strategy provides all measures for transport improvement (www mayor.london.gov.uk), as well as environment and economic development enhancement. It mainly contend with the improvement of public transport, which includes buses, underground and over-ground railway services and it also provide measures to tackle central London congestion issues.

 In order to support London as an exemplary sustainable world city, “the Transport Strategy will increase the capacity, reliability, efficiency, quality and integration of the transport system to provide the world class transport system the capital needs.” (Transport Strategy) It has marked ten key transport priorities

  1. Reduction of traffic congestion;
  2. Overcoming the backlog of investment on the underground
  3. Improving bus service
  4. Integrating National Rail
  5. Planning and providing new capacity
  6. Improving car journey time reliability
  7. Supporting local transport initiatives
  8. Making the distribution of goods and services in London more reliable
  9. Making the transport system more accessible
  10. Improving network integration

(4A Transport Strategy)

 Based on the above ten priorities, approaches were/ will be taken to address the diverse problem throughout London in order to improve London’s transport system. It aimed to increase the capacity of the London Underground and bus system by 40%. It also aimed to reduce the traffic in central London by 15%, besides, it as well intended to limit the traffic growth throughout the Greater London area. (http://www.tfl.gov.uk/tfl)

The Government, congestion and the London economy

This increase in government revenue could be highly beneficial as it could be used to increase the quality of public transport and thus be used more by the public. If the usage of public transport increased, it could mean that more employment could be needed to accommodate this increase. Employment also has a positive impact on the London economy. (www.london.gov.co.uk)

Although the scheme is expected to create a lot of revenue, the programme has cost the government two hundred million pounds to set up. If the estimated figures are correct the government will make up the money spent in under two years. However, due to the fact that the government has invested so much money in to the scheme it may have had to cut back in other areas such as the NHS and this is likely to cause outrage. This could mean that areas such as the health service may decrease the quality of their service.

One of the main issues of the scheme was introduced was to decrease congestion in central London. Congestion is the main cause for air and noise pollution. By introducing the congestion charge scheme, 50,000 fewer cars are travelling in to central London thus it has decreased the level of congestion and in affect decreased the amount of noise and traffic pollution which will help stabilise any problems caused by pollution (www.tfl.gov.uk) (e.g. acid rain).The Managing Director of Surface Transport at TfL Peter Hendy said: “Congestion Charging is proving to make a real difference for the better for those who work in and visit London.” “Travelling into and through Central London by road is now quicker and more reliable than at any time in recent memory. “Bus services too are vastly better, quicker and more reliable since the start of congestion charging. London’s buses are now providing a truly high quality alternative to the private car in Central London.” (www.tfl.gov.uk) Central London consists of many shops and business that rely on passing trade, and due to the congestion charge there has been a decrease in people coming into central London for a variety of reasons.

The ‘Footfall Index’, a measure of people visiting retail centres, indicates a 7 percent year-on-year decline within the charging zone, and that retail activity in central London during the first half of 2003 was notably lower than the equivalent period in 2002. (Graham Goodwin Senior Press Officer Congestion Charging – 6 Months On). Thus meaning that there has been a drop in trade which has affected the businesses in central London. Due to this there have been many job losses as a result because businesses have to make up the money that they are loosing in the fall in customers with their labour, which increase the unemployment in London, thus would cost the government in unemployment payments. (www.london.gov.co.uk)

London is the biggest city in England and Central London is the largest congested area, it alone can be the same size of a small city. One of the reasons that the congestion charge will be successful in London is due to the fact that central London is of a size that the government knows that the two hundred million pounds being invested in to the scheme will be almost certainly made back with in two years, if not sooner. In other smaller congested areas, it would not be practical due to the size of other cities and it also will not be as financially viable. This is because other smaller congested areas have not as much congestion as central London thus not as much revenue will be created by the scheme in other areas. (www.newstatesman.com)

What is CONGESTION? Why is it a bad thing?

Congestion is a pile up of traffic that isn’t moving. It normally occurs in urban areas where there are a lot of major businesses, and an enormous number of people either, travelling to work by car, going shopping or passing by to reach another destination.

 A pure example of congestion is Central London. It is extremely high, especially on the weekdays when most people are working, not only at the shops, markets and restaurants but also at the banks and offices.

 Those who live outside London either have to wake up very early and use the public transport or the other solution is to travel by car.

Today the majority of people prefer to travel from one destination to another by car, whether it is a short or long distance, for the majority it is faster and reliable. (http://www.tfl.gov.uk/tfl)

What does congestion entail?

  • London is said to be suffering from the worst traffic congestion in the United kingdom and amongst the worst in Europe as a whole.
  • Drivers spend up to a day and a half sat in traffic doing absolutely nothing every week.
  • Upto 50% of drivers in London spend their time in traffic queues.
  • On every weekday morning, the equivalent of 25 motorway lanes full of traffic try to enter London’s central zone.
  • It has been forecasted that London loses around £2–4 million every week in regards to loss of time caused by congestion. (www.cclondon.com)

Congestion charging is a way of ensuring that those busy roads contribute money for London’s transport.

It encourages people to use the public transport. Therefore there will be less congestion than before and for those who use the roads, their journey would become quicker than before as fewer vehicles are entering the congestion-charging zone.

Ken Livingstone’s targets…

  • Reduce traffic levels by 10-15 percent.
  • Make more people use the public transport.
  • Integrate national rail and other transport.
  • Introduce new rails.
  • Prevent delays on London’s roads and when traveling by train and tube.
  • Improve times of distribution of goods and services. (www.bbc.co.uk)


Disabled drivers.
Certain health service employees and patients.
Emergency services, army and breakdown vehicles.
Motorbikes and mopeds.
Black cabs and licensed minicabs.
Buses and coaches with nine or more seats.

Who might benefit from CONGESTION CHARGING?

Lawyers are for congestion charging because they have to attend a lot of appointments on time. The congestion charging scheme will prevent congestion and more people will be using the public transport. For lawyers who earn a lot of money per day, £5 is a minor fee and they can reach their destination faster than before.

 Those people who are not willing to travel into the city by car and pay a £5 fee will travel by train, tube, coach, bus etc so the public transport and other private transport companies have a higher chance of expanding their yearly profit margin as they will be getting more customers. (www.cclondon.com)

 Major firms like Safeway are for congestion charging. Because there will be less congestion in the Central London, their products can be transported by lorry from one destination to another faster than before.

 The taxi companies are for congestion charging because people will be using the black cabs and taxis more than before, especially those who live in the outer suburbs of London and wish to enter the congestion-charging zone without paying the £5 fee. These companies will be earning more money than before. (www.cclondon.com)

Who might be against CONGESTION CHARGING?


The commuters are against congestion charging because it will persuade more people to use the public transport. The trains and buses are currently already over-crowded and it will be worst, as more people will be using the public transport than before.   (www.bbc.co.uk)

How will it affect the residents living on the boundaries of the CONGESTION CHARGING zone? How will it affect people who regularly drive into Central London?

In the long term this will be very expensive for those who regularly drive into Central London. For example a normal person who works 5 days a week will be losing £25 per week. Unless you are very rich, this isn’t worth it at all.

Some drivers will still continue driving into Central London but a lot of them wont be willing to pay the £5 fee on a daily basis, especially those who live far away and work in the city, so they will park their car on the boundaries of the congestion-charging zone near to the residential areas and either walk or continue their journey by bus, train, tube and/or taxi. (www.notolls.org.uk)

This will mainly affect the residents living on the outside of the congestion-charging zone because the amount of parking space will become limited. This will also result a sudden increase in noise pollution. (londontransport.com)

What do you think about CONGESTION CHARGING? Why?

I think congestion charging is a good method of preventing people to drive into Central London and decrease congestion and pollution. It persuades more people to use the public transport instead. In the long term this will result to less noise and a better environment. The roads will be less busy so taxis, coaches and buses can take the commuters to their destination on time and the lorries can transport goods from one destination to another faster than before. There will be fewer chances of road accidents and grid locks. (londontransport.com)

  1. Will it affect you and your family?

This won’t affect my family fortunately because my father is registered as a disabled driver so he is exempted. My mother doesn’t work or travel often into Central London either. However a lot of my uncles, aunties and other family friends who are working in the city face the problem of reaching their work place on time, mainly because of delays on the public transport (BBC)

How is it monitored?

Transport for London has spent £200m implementing the system and allocated £50m-a-year to run.
There will be no tollbooths around the centre of London and its congestion charging zone and no physical tickets or passes. On the contrary, you will be paying to register your vehicle registration number on a database for journeys within the charging zone. (www.apexrental.co.uk)

There is a network of around 203 camera sites which monitor every entrance and exit which is correlated to the congestion charging zone along the periphery, and monitoring journeys made only within the charging zone.

“Each camera site consists of at least one colour camera plus a monochrome camera for each lane of traffic being monitored.” (www.cclondon.com)

The cameras are very similar to those which are currently being used in airports. The cameras possess sophisticated technology. They contain Automatic Number Plate Recognition (ANPR) software, which can read and record number plates. Tests have shown that the cameras read close to 90% of all number plates which extreme precision. (www.cclondon.com)

Congestion charge ‘better than predicted’

London saw a reduction in traffic
Congestion charging in London has worked “far better” than some people predicted, Transport Secretary Alistair Darling has said.
But he said it would take “some months” before it could be established if the scheme was a success.

The fee of £5 a day for driving in central London between 0700 GMT and 1830 GMT was introduced on 17 February(www.bbc.co.uk). Traffic levels have been reduced by about 20% in the charging zone

He added that other local authorities would be looking at the London system but warned that it had to be combined with other measures.(www.bbc.co.uk)

“Bus lanes, traffic calming measures, can all play their part in improving town and city centres as places to live and work. (www.bbc.co.uk)

“Congestion charging is just one option. It is not a solution on its own.”(bbc)

Transport for London (TfL), which runs the scheme, had predicted the scheme would raise £130m in its first year which would be used to fund improvements to public transport. (www.tfl.com)

But the success of the scheme has meant that only 460,000 in payments had entered the treasury in the initial week. (www.bbc.co.uk)_

The advantages success of the congestion charge

The congestion has been said to be highly successful in central London.

(Graham Goodwin Senior Press Officer Congestion Charging – 6 Months On)
”The congestion charging scheme directly tackles four key transport priorities for London: reducing congestion; improving bus services; improving journey time reliability for car users and making the distribution of goods and services more reliable, sustainable and efficient. It has also raised significant funds to improve London’s transport system.”

If the congestion scheme has helped central London reduce congestion, improve its bus service, making the distribution goods and services easier and raised funds to help the local transport system then it is very likely that the same scheme in other congested areas will have the same affect. (www.citymayors.com) The success can be seen in the congestion charging scheme in London so quickly because of the size of it. In other areas the success may not be able to be seen as quickly, but in the long run the outcomes will most likely be the same.

The reason the congestion charge has been successful in London is that people have the option of travelling by tube, this scheme would be difficult in other congested areas as no where has the facility of the tube system. Not all congested areas have this service. It is because people have transport options in the central London congestion scheme that it is fairly successful. If some cities did install the congestion charge, it would give people whom are unable to pay the charge or refuse the charge limited ways of travelling. Some cities only have the bus service. This would decrease the quality of the bus service due to overcrowding and make it less efficient.

The congestion charge has decreased the number of cars travelling through central London by 16%; this would decrease the pollution in central London. If the congestion charge was installed in other congested areas it would mean that the country as a wholes pollution would decrease, this would then help such environmental issues like acid rain and global warming. (www.london.gov.uk)

As the point earlier was made, much passing trade has been affected due to the congestion charge. If the congestion charge was installed in to other congested areas, it would be doubtful that they would be to cope with the loss in trade, and thus have to make more people unemployed as a result of the revenue lost by the charge. London has been able to cope due to its large population, but other congested areas being smaller wouldn’t be able to survive the charge. (www.transport2000.org.uk)

The disadvantages

After considering the advantages of introducing these congestion charges it proves quite a respectable solution. However, ever solution has its disadvantages and the London congestion charge is no different. People will use the public transport against their needs and not through their own choice and the cost of transport within and around London, which can be related to the economy, for instance the cost of supply would increase for firms and therefore cause a shift in the supply curve to the left. The congestion charge will also affect investments. (www.transport2000.org.uk) As running costs are higher firms will not have as much money to invest in businesses and therefore affecting investment, potentially the stock market. The national economy will also be affected because foreign firms would not create new businesses or invest in London. (www.transport2000.org.uk)

A report commissioned by Transport for London has confirmed that the affect of congestion charging will have ‘no discernible affect’ on the price of houses on zone’s border. However, it has been claimed in a report of one of the member’s homes showed the value would plummet £20,000 when the scheme was introduced. The major concluded congestion charging would be a very small factor in the macro-economics that affect the house price fluctuations in the capital. (www.bbc.co.uk)

Ken Livingstone claimed in a conference in Bruxelles that the congestion charge will lead to a reduction in traffic levels of 10-15% and in congestion of 25-30% in central London

The congestion charge is said to affect the poor more than any other, the problem is the Londoners do not have much of an opportunity cost, because at the moment the tubes are not very reliable. At present it is more time consuming to take the tube given that some of the lines are out of action and this is causing problems and delays for many of the other lines. As well as affecting the people who live in and around London, firms are affected a great deal therefore having an impact on the economy as a whole. (www.bbc.co.uk)

Congestion and air pollution

Congestion occurs when journeys by road users take longer than anticpated. It is simply initiated by too many cars pursuing too little road space. The demand for cars has far exceeded the supply due to increase in incomes and relative fall in the prices, thus more cars are on the road. This problem is heightened every day in London where the average speed in central London is 5.7mph, a mild jogging pace. (www.london.gov.uk)

More than one million people enter central London by all forms of transport and nearly 40 000 vehicles crowd onto the roads an hour. The effects of Road congestion produce an array of negative externalities.

Air Pollution is a major externality, atmospheric emissions from pollutants produced by the internal combustion engine have an effect on air as well as on acid rain and global and regional warming. In urban regions such as London, 53% of air pollution emanates from automobile traffic. Pollutants can cause respiratory troubles and aggravate cardiovascular illnesses.

 Noise can be a nuisance to human health and welfare. Nose can be manifested in three levels depending on emissions intensity; psychological disturbances (displeasure and annoyance), functional disturbances (loss of sleep, speech interference) or physiological disturbances (serious health issues such as hearing damage.) Congestion can create much noise pollution due to constant gear changes and frequent impatient horns that contribute to the problem. (www.odournet.com)

Water quality is also affected and is a big negative externality. Normal runoff of pollutants and debris from congestion of cars are contributors for the contamination of both surface and ground water. Congestion and transportation percentage of water pollution is 4%. Finally congestion can also induce stress and anxiety through road rage.  (www.odournet.com)

Congestion in London is a form of market failure. The marginal cost to the consumer is the cost considered when a driver makes the choice to use a car. The costs to other road users and costs to society are not taken into consideration. The marginal cost to other road users is added congestion caused by that extra car on the road. The extra cost to society is the increase in emissions produced by a extra journey and the negative impact of that journey. There is also a marginal cost to the individual as there is an opportunity cost of the time spent in congestion or standstill, which is the case for 27% of journeys coming into Central London in the mornings. (www.skynews.com)

Ways of reducing congestion

Building new roads or improving roads can be the best long term solution to solving traffic congestion. Bypass schemes and motorways take traffic away from urban areas, reducing pollution. (www.roadbloack.org.uk) Better roads also lead to shorter journey times, resulting in a massive saving for the economy as transport costs fall. However, building new roads could create problems. Shorter journey times will encourage businesses and people to make more journeys. People may switch from other forms of transport such as rail, or increase the number or length of journeys made. Therefore making more congestion on the roads.

Privatising the roads can be achieved in a numerous of ways. One way would be to invite private construction companies to bid for contacts to build motorways which they would pay for, and allow them to charge tolls to motorways users. The advantage is that they can be set at levels which allow the free flow of traffic on the motorway. The higher the potential congestion the higher toll charged. Also if a stretch of motorway is too congested on a particular day or at a particular time of day, the motorway owners could charge a higher toll to relieve the congestion. (www.niaassemply.ogov.uk) Therefore this would reduce the amount of traffic.

If bus lanes were introduced then it will restrict car access through giving priority to buses, so making using public transport a more attractive alternative to the car. The time saved by using buses will encourage individuals to go from using private transport to public transport. This will reduce the amount of vehicles on the road and the amount of congestion. (www.gnn.gov.uk) However, this may not be successful if the bus service is not of good quality, and run regularly. If this isn’t the case then individuals will not change from using the car to the bus. It is not a short term solution; it may take some time for people to swap to using buses rather than cars.

Another way to reduce congestion would be to charge people to use the roads. This could be done by cars being fitted with a meter. This could be fed with pre-paid cards, such as telephone cards or with points which would be used up as the car went along. Or the meter would be read on a regular basis, maybe once a year when the car was given its MOT. They would then be billed after the mileage had been done. The meters would be activated by beacons on the road side or gantries over the road. This would discourage motorists driving along congested roads, and therefore reducing congestion. However, there are problems with this, the technology would be expensive to introduce and the system would have running costs. Also motorists regard the roads as ‘free’ and would resent having to pay for them, and so there would be political backlashes. (www.notolls.org.uk)

By reducing the traffic speed this will increase the level of congestion. So this may encourage car drivers to seek alternative means of transport. In the long run this should encourage individuals to switch to a non-car mode of transport, reducing car use and congestion(tfl). However, the problems of this policy are the change and the amount of time it may take for the policy to have effect. The policy will cause more problems in the short run and may therefore be ineffective in the long run. The policy may be ineffective because of the problems of finding a readily available alternative to private car use. (tfl)

I personally think Mr. Cristy should walk to school because he sets trends. If he walks then so will all his millions of fans, the roads will be empty! He should also transfer his credit card account to save more money. The money saved can then be ploughed back into good walking shoes and possibly a new suit!  (www.bbc.com)

The problem lies in the south east

The problem of congestion in South East, particularly London, is a great one. Throughout the nineteenth and twentieth centuries increased car use was seen as part of growing economic progress, but now we aware of the negative externalities caused by it, congestion and pollution, something must be done to restrict road use. (www.dft.gov.uk) Congestion in London is a massive problem. It causes unsightly gridlocked roads, difficulties in travelling around, and causes businesses to use extra vehicles to be able to carry out their work efficiently, thus adding to the problem further. To tackle this problem, there are two methods of restricting car use in London. One is using direct controls/interventions, e.g. yellow lines, full pedestrianisation, traffic wardens etc. The other is the use of the price mechanism, e.g. road pricing, taxes, public transport subsidies etc. (www.dft.gov.uk)

The fundamental difference between the two methods is that whereas a direct control bans use of a good/service, the price mechanism will restrict its use by making its users pay the full social cost for it. Relating this idea to road use, this can be an advantage of using a direct control. To ban cars from parts of the South East (i.e. pedestrianisation or perhaps use of double yellow or red lines) would be certain to work, whereas making people pay to use their cars would not, and its effectiveness would depend on the price elasticity of demand of car use. Another advantage of using a direct control is that if you did not wish to ban the use of cars altogether you could at least accurately limit it by setting a quota, for example, by letting in just 500 cars into the City Centre. (www.bbc.co.uk) Disadvantages of using a direct control to reduce congestion are as follows. Firstly, whereas it could be argued that a direct ban is certain to be effective, and so is a good thing, it is also true that a direct ban on all car use would stop car use altogether, including those who desperately needed to. This would mean that as well as cutting down on the amount of cars driving into Central London for silly shopping trips or school runs, you would also be stopping vitally important journeys through it to get to hospitals etc.

A total ban on all cars within areas of London would also have devastating effects on businesses based in that area (www.dft.org.uk), for example carpet of furniture shops, whose customers required a car to use them. This may mean having to relocate hundreds of firms elsewhere in the region at a large cost. (Although it could be said that such businesses would be far better off being situated outside of Central London, and should be made to pay some of the reallocation cost due to negative externalities of the increased traffic there presence has caused.) Another disadvantage of using a direct control would be that they might be difficult and costly to enforce. For example, painting yellow lines to stop people parking in certain areas may well work, but the cost of employing traffic wardens and clamping vehicles (likely to be using taxpayers money) may be great. It is also worth considering that although some sort of direct control may be suitable inside of Central London, it would probably not be so appropriate in other areas of the South East, for example Cambridgeshire, where congestion is not such a problem and arguably banning the use of cars there would stop many tourists from enjoying its attractions. Because of these reasons against the use of a widespread direct control on car use, the price mechanism would be more suitable. (www.bbc.com)

A speech by the mayor of London

My fellow Londoners I was appointed by you the people and my soul purpose is to serve the people of London to the best of my ability and I believe I am doing so and will continue. (www.bbc.co.uk)

 The congestion charge is that now in operation was not snuck in through the back door as some uninformed ministers have suggested, despite growing public and cabinet objection to the congestion charge the principle was documented heavily in my manifesto prior to my landslide victory my intentions were clear, and should come as no shock to my constituents. (www.thesun.co.uk)

The erroneous commonly view of the charge being new and conjured up by myself as a means to squeeze money out of motorists is quite absurd, it was actually proposed 38 years ago and the fact of the matter is nobody has had the back bone to push the legislation through until myself. (www.mayor.london.gov.uk) 38 years have passed 13,870 days of road works due to under funding, and traffic jams due to over populated roads has become the norm for Londoners and enough is enough; its time for action and the time is now. (www.londontonight.co.uk)

It is all very well and good little public schoolboys such as Steven Norris saying and I quote “charging is not the way.” What I’d like to say to him is, “Steven your government has had 38 years to come up with a creditable alternative so where the hell is it? Either put up or shut up.

When will you, accept that something drastic has to be done? We can’t continue throwing millions of pounds of tax payers money on this issue and expect it to resolve its self if that was the case transport in London would be one of the best if not the best in the world. What we need to do is follow the example of other cities worldwide; cities such as Philadelphia, Madrid and Tokyo who all use congestion charging and similar schemes to try and decrease the number o vehicles on their roads and in each one of these cities once the charging scheme was adopted traffic jams and such like were reduced by on average 78%. (www.bbc.co.uk)

You may say none of these cities have any resemblance to London but you would be mistaken; each one of the named cities started out with similar problems as we are experiencing now and all of them got much worse before they got any better. It would be madness to ignore the mistakes of others when we can learn from them. (www.telegraph.co.uk)

The scheme itself has many benefits along with few drawbacks to road users, residents, businesses motorists and the environment. All of these will be affected and care and consideration has been taken when considering the significance of the charge on the various groups. The largest and foremost benefit of the scheme would be the reduced amounts of congestion in the key zone, Central London. Even though there are many motorists who consider their trips through central London vital, there will be a number of motorists who will avoid the zone during the charging hours, because they do not need to make that trip. The estimated level of reduction in vehicles passing inside the zone would be 10-15%, with a 30% reduction in the in the levels of congestion surely things can only get better form here onwards think how much traffic could potentially be cut if the zones were extended. (www.skynews.com)

Congestion charging thus far has been on the whole a positive an effective weapon in reducing traffic in and around London since it was introduced on February 17th contrary what certain tabloids would have you believe it has reduced a massive 34% of traffic on London roads in its first day in comparison with the pervious year. However, there’s still along way to go; now I have the financial means to improve transport in London, which I didn’t have before I hope to increase the number of busses and trains and trams in operation hence less cars on the road. (www.bbc.co.uk)

A general look at congestion

Over the past 40 years, there has been a huge increase in the number of privately owned cars, and today most families have two or more cars creating an excess of 21 million cars in the UK today. This increase in available transport has meant that housing has been able to be built further out of the city leading to counter-urbanisation which has caused greater commuting between home and work. There has also been a huge reduction in the amount of people using public transport as the general reputation of public transport is that it is dirty, unreliable and very expensive. (www.obsever.co.uk)

These factors therefore have meant that private transport has become ever more appealing, but has brought with it environmental, economic and social problems. The environmental issue of air pollution leading to the green-house effect and harmful exhaust emissions leading to human illnesses as serious as brain damage has caused high costs to the car manufacturers to reduce car emissions and has also cost the government and tax payers, as more and more people enter hospitals with car related illnesses as well as car accidents. (www.bbc.co.uk)

Economic losses are also massive to all businesses, as congestion delays deliveries forcing delivery charges to increase. Also, the employee’s time is wasted in the traffic jams, which amounts to millions of pounds of working time wasted each day. Road building and maintenance is also very costly and is an area to which a lot of the tax payers money is located each year. Fuel is also very costly, especially in the UK where taxes on fuel are massive compared to other countries such as the USA or most other European countries.

Social problems are a regular occurrence each day too, as congestion slows down the progress of emergency vehicles and there is an increased danger of road rage and car accidents as traffic levels rise. (www.bbc.co.uk)

All these problems are ever-more increasing in cities in both MEDC’s and LEDC’s. However, traffic management in Worcester has employed some strategies to try and combat this congestion. The most recent attempted solution being the ‘Park and Ride’ system that was setup in 2001, which operates every 10 mins from Mon-Sat. (www.london.gov.uk) This has attempted to stop so many cars entering Worcester and therefore trying to keep congestion out of the city centre.

This has been a main attempt by many cities, as most cities within the UK have been very erratic in the situation of roads within the city, simply due to the fact that the roads have had to have been built round what was already there, which has meant a noodle pattern of roads weaving between the city. However, this strategy hasn’t been too successful, as not many people use this facility due to the fact that public transport still has a bad reputation anden cheaper for people to drive all the way into town and park in company car parks than have to pay £2 to catch a bus in. Bus priority lanes have also been introduced down some roads to allow quicker access to the city by bus, in an attempt to make it seem quicker to take the bus into the city, but again this strategy has only been part successful as few roads have these priority lanes introduced. Bus shelters are also being improved to make people’s perceptions of the public transport change. (www.bbc.co.uk)

Another city which has faced massive congestion problems is Mexico City, which produces 12,000 tonnes of gases and pollutants from the 40,000 factories and 3.5 million vehicles. This gives the city the world’s highest ozone level from December to March. 2 million people suffer from diseases caused by air pollution (placing yet more pressure on medical facilities) and 98% of the northern sector of the city suffers from cell deformation and inflammation of the nasal passage. (wwwbmj.com) The pollution is so bad that the WHO (World Health Organisation) declared that air quality in Mexico City was only acceptable on 20 days in the year. All of this pollution is due to the fact that many cars are not serviced properly and therefore respire more than the legal amount of toxic fumes. Also, many of the cars on the roads in Mexico City are very old due to the fact that most of the population is very poor, which means that some of the cars are run without the use of a catalytic converter. The congestion problems are so bad that the average speed of cars moving through the city is an estimated 12 mph, which contributes to the increasing amount of harmful fumes released. www.bbc.co.uk)

However, the Mexican government is now trying to tackle these problems with strategies that are now working their way into the laws. One of the most inventive strategies has been to restrict private cars to not be allowed to be driven on one day of the week. This has been a good of way of trying to cut down on the level of traffic, but has not worked in some ways. For instance, the wealthy population of Mexico City can simply afford to own two cars each which enables them to use the alternative car on the day which their other car is not permitted.  (www.itv.co.uk)

The government is also now replacing old taxis to ensure that they cut down on emissions, which has been a great success, as taxi drivers now have cleaner and more efficient vehicles to drive. Petrol stations are also only open fro restricted periods of time, which has been good in the sense that people are now buying less fuel and therefore cannot drive as much, but it also means that the taxes received from the population buying this fuel has decreased, which is quite a dramatic effect as the economy of Mexico is in a bas state due to the amount of demand for new facilities and housing, so by cutting the taxes they cut the funds for these new facilities. (www.ealing.gov.uk)

 Overall, traffic congestion is a major problem to all countries throughout the world, due to the favourite phrase “time equals money”, which means that while people are driving to work they are not being productive. Also the effect on the environment is quite drastic, as the green-house effect is a global issue that all countries must think about.

The strategies to reduce these effects have been quite successful in easing the problems that congestion has on society, but they still have a long way to go before these strategies can actually start making a big impact on the problems. I think the main area for the government to look at is trying to make public transport more appealing to the average commuter. Perhaps this could be done by lowering the prices for fares or maybe introducing cash penalties for entering the city such as in London, where it now costs people £5 to enter the city. Drastic strategies like this must be made in order to be able to start seriously reducing the effects that traffic congestion has on the economic situation of a country the social aspects and especially the environmental threat. (www.bbc.co.uk)

Other British cities

Problems of congestion aren’t just confined to London. Other large cities such as Birmingham, Leeds, Manchester and Sheffield have faced congestion in recent years. Norwich is no exception either. In the centre of the Norwich, the problem is more than obvious.

In order to reduce traffic congestion in the centre of Norwich, the city council can adopt many different measures. Some of them are more effective and some require some changes in the area of Norwich before they can actually function while others can be put into effect immediately. However, they all aim to reduce the traffic congestion. The question that arises is which measures are the most appropriate for Norwich. (www.bbc.co.uk)

The easiest solution to congestion, according to laymen is to build new highways and add more lanes to existing ones. This notion is very superficial and can not be taken seriously into account. Norwich is a town with many old buildings and a style that does not create a modern city. Most of the houses are private houses, not higher than three flours, with their own gardens. An attempt to build new highways would spoil the beauty of the town and would make it like an ordinary city without any speciality.  (www.dft.gov.uk)

Before examining the measures that can be adopted, the different types of costs that result from the operation of a road system must be identified.

Operating costs are the costs of running motor vehicles. (E.g., fuel, tyres etc). Track costs comprise the costs of providing the road system (E.g., maintenance, depreciation, and administration). Congestion costs are the costs that road users impose on other road users (E.g., delay, and higher operating costs). Other intangible costs. These are losses imposed on the community by road users (E.g., fumes, noise, and accident risk). (university of east Anglia)

Alternatively, costs may be arranged according to the persons or firms on whom they fall and by whom they are paid, either by a money payment or in some other way. Such a classification however, raises the problem of the discrimination between private and social cost. (www.dft.gov.uk) Social cost is the total cost resulting from any economic operation whether it is borne by the person or firm undertaking the operation or by other persons or firms in the community who suffer losses for which they are not compensated. Thus private cost may occasionally be equal to social cost but only when there are no community costs as well. Private costs refer to those costs borne by the person undertaking the operation and public costs to the total costs of the operation. (norwich city council)

The city council is following a series of co-ordinated policies covering all aspects of travel in the Norwich area. The focus of the strategy, which is called NATSb is to encourage people to depend less on their cars in the city by making alternative forms of transport more attractive. Making it less convenient to use cars for commuting by controlling long stay parking provision; and making streets safer by slowing traffic down in residential areas. The strategy builds on the existing high levels of cycling and walking and the success of park and ride. It only promotes road improvements if there are safety and economic benefits and no significant environmental problems. (www.dft.gov.uk)

According to statistics every weekday over half a million-vehicle trips are made in and around Norwich. Thirty per cent of these trips are concentrated into just hours, the rush hours, between 7:30 and 9:30 a.m. and 4:30 and 6:30 p.m. These are the hours when people go to and leave work. In order to reduce traffic congestion and allow for some increases in leisure and business trips for which there is no alternative, a reduction in trips to work by car will have to be achieved. (Norwich evening news)

To do so the city council must have alternative solutions to offer. These are buses, cycling and walking. As far as buses are concerned, it is essential to improve local bus services by introducing bus priority measures such as bus lanes to help reduce delays to bus services and improve their reliability. It also must introduce simpler ticketing arrangements – particularly on journeys that involve a change of bus or a change between bus and train. (www.norwich.gov.uk)

These measures will improve the travel by bus but they are not enough. Three more factors can be improved. First, the capacity of each bus. To achieve this, new buses must replace the small one’s that are in use. Second, the ticketing system needs to be changed. Instead of paying the ticket in the bus, passengers can buy their tickets before getting into the bus and just validate them when they get in. The advantage of this system is that makes the route faster. Passengers can get in the bus without queuing and validate their ticket without the interference of the driver. Inspectors would check at any time, by getting onto buses, that everybody has a ticket. Heavy penalties for those who do not have tickets will be imposed. Finally the price of the ticket should be decreased, in order to be the cheapest mean of transport and attract more people. (www.dft.gov.uk)

There are many cycling facilities that can be improved to make cycling more attractive. The most important issues that concern the cyclists are their safety when they cycle and the safety of their bike when they leave it unattended. The NATS aims to improve cycling facilities by continuing to develop a comprehensive network of on and off road routes. Furthermore, it can create more parking places for bikes.

Another measure that can be adopted is to close some roads to traffic during the shopping hours, or even pedestrianize them. Streets like St. Stephan Street (A-Z Norwich) are very crowded especially during the shopping hours because most of the shops in Norwich are in that street. By not permitting entrance to vehicles, it helps the pedestrians to walk without the fear of the cars. (www.norwich.gov.uk. a-z)

A measure that is already in use but needs to be completed is the park and ride measure. Park and ride is a system which enables journeys to be completed using a combination of private and public transport. By providing convenient car parks on the edge of an urban area, with good public transport links to the city centre motorists can drive to these car parks and continue their journey by either bus or train. Park and ride schemes already operate in a number of English cities and towns including Cambridge, Oxford and Nottingham.When all the park and ride sites are constructed so that each area is served by one site this measure will help to reduce the traffic congestion in the city centre even more. The first purpose built terminal opened at the airport in 1994 and, together with the park and ride service from the Harford Livestock Market, on average the two services accommodate over 1000 cars a day which may have otherwise driven to the city centre. (Norwich evening news)

However, a very effective and easily adopted measure is to specify an area in the city centre where the cars access will be selective. This can be done by allowing entrance to this specified area, the «ring», at even days to cars which last number is an even number and at odd days to cars which last number is an odd number. With this measure, the traffic is reduced to half in the «ring». Penalties will be imposed to drivers who enter the «ring» when they are not allowed. An important advantage of this measure is that it can be put into effect immediately without special costs. (Norwich evening news)

A variation of the previous measure is to allow entrance at the «ring» only to buses and taxis and not at any private cars or motorbikes. The advantage of this variation is that reduces the traffic even more by excluding private cars. Taxis can be allowed access to the «ring» to serve people who do not want to take the bus for some reason. (tfl)

A factor that causes traffic congestion is the commercial vehicles. The congestion caused by the incidence of commercial vehicles in traffic flows can in economic terms, be viewed either as a user cost the additional costs to other vehicle operators caused by the presence of such a vehicle or as a capital cost the cost of the extra road space that would be required to accommodate the commercial vehicle traffic without altering costs in existing traffic. Besides the important congestion implication commercial vehicles also figure large in the environmental or amenity cost aspects of traffic flows. (www.traffic.co.uk)

Finally, the answer that economists have for auto congestion and pollution problems is road pricing. This system charges people for using roads based on what roads they use, what time of day and year they use those roads, and the degree to which pollution problems exists at the time they are using those roads. Sets prices at the levels that yield the optimal amounts of usage. Using bar codes and debit cards, a city can install bar code readers at different points around the city. As any car goes by each point a certain amount is deducted from the driver’s debit card account depending upon weather time of day and location. Inside the car, the driver has a meter that tells him how much he has been charged and how much remains in his debit card account.

Many people would argue that this system allows the rich to drive more than it allows the poor. The answer to those people by Lester Thurow is that in this case “each auto can be given a specified debit card balance every year and those who are willing to drive less can sell their unused balances to those that want to drive more.(Norwich evening news)

Another policy that reduces traffic congestion is the tax on gasoline. Gasoline is a complementary good to driving. An increase in the price of gasoline tends to reduce the quantity of driving demanded. Therefore, a gasoline tax reduces traffic congestion.

It must be noted at this point, that the city council alone can not put into effect some of these measures without the approval of the Norfolk county council.

The most appropriate measures for Norwich would be to complete the park and ride network, to improve local bus services, pedestrianize some streets and apply the measure of the «ring». In addition to these measures, improvements can be made by having big screens in certain points of the city, which will provide information about traffic in the city centre. These are the most appropriate measures because they do not require many alterations to the city centre and they are the least expensive

If these measures are put into effect the traffic in the centre of Norwich will be reduced, there will be environmental benefits and the noise and accidents will be reduced. (www.dft.gov.uk)


To conclude this dissertation I think it’s fair to say that traffic congestion in London being at its worst ever is also costing industry in and around greater London millions of pounds every year. In a study Alan Griffiths & Stuart Wall (2001), estimate that if traffic were reduced then London’s economy would be better off by £1m a day. This would be a major boost for a city that at the moment looks unattractive and is sometimes over looked in favour of other cities because of the traffic congestion and the additional costs to business because of it. The scheme would also improve business efficiency and reduce the time employees and deliverers spend on the roads, and would spend less on fuel consumption (Greens on the GLA, 2001).

The TfL expect the scheme to raise around £130 million a year, with a ten year investment plan to plough it all in to transport improvements. This would no doubt improve public transport, namely buses and the underground, in many areas with improved and new routes planned and an increase in the number of buses and trains. There are investments planned in all areas in public transport, including implementing more safety regulations (TfL, 2001, Congestion Charging: Public Transport Improvements). This all has to occur fairly swiftly as the demand for the use of public transport will be stretched.

The government does not have things all their own way. The congestion charging scheme also has many consequences to it. With the reduction in congestion in the charging zone, there will be an obvious increase in traffic around the surrounding areas of the zone. The TfL are expecting there to be a 5% increase in traffic levels on orbital routes.

There is also an issue of this being like just another tax and being regressive in its cause, therefore benefiting the rich and adversely affecting the poor. The rich will be able to pay the tax with no qualms, and will actually benefit from paying it as the people less able to pay the tax will be forced, not to drive in the zone.  Just to sum things up it’s quite evident that the London congestion charge has helped the city’s economy a great deal. Millions of pounds are entering the treasury. At the same time the government is making an attempt to tackle congestion but as people seem to say the government main aim was to raise revenue and improve its economy and that objective seems to have been achieved. Not only does the congestion charge help the city of London but it also helps the economy of the United Kingdom as a whole. If indeed this scheme is spread to other cities and it’s perfectly right to assume that Great Britain will one day become an economic world power. We shall have to wait and see.







The telegraph newspaper

The sun newspaper

Norwich evening news

The observer newspaper










UK Commission for Integrated Transport Congestion Charging

The London Congestion Charging Scheme (CCS)

London Chamber of Industry and Commerce

The London New Writing Anthology




University of East Anglia website

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