Every penny will be used to improve transport for London

Ken Livingstone

"If we get, as we anticipate, a reduction in congestion of up to 15%... this will be the first time we have started to see congestion come down and an easier ability to get around on our streets."

The announcement follows news of other long-term plans to tax motorists around the UK according to the distance they drive.

Under those charges motorists could have to pay up to 45p a mile to use the busiest routes.

London's congestion charge

Area: Eight sq mile stretch of central London �5 daily charge from 7am-6.30pm 130 cameras scan number plates �80 fine Vehicles can be registered on internet 90% discount for people living in charging zone 100% discount for disabled and essential services Start date: 17 Feb 2003

Introducing the tolls was a key element of Mr Livingstone's mayoral election campaign.

A cordon will be set up around central London with around 230 video cameras able to read car number plates.

These will be checked against a central database to check fees have been paid.

Mr Livingstone hopes the scheme will raise �150m a year which will go towards improving public transport.

"We now go into a long period of debate with the public to see how best to spend the money raised," he said.

"Every penny will be used to improve transport for London."

'Cost of congestion'

Transport Commissioner Bob Kiley welcomed the scheme.

If firms are not to be driven out of London, they will need to see a clear benefit from the revenue

Jane Calvert-Lee CBI

"London needs action to tackle congestion now," he said. "It's time to get London moving and reduce the traffic jams that are crippling our capital."

Confederation of British Industry London director Jane Calvert-Lee agreed, saying: "Congestion inflicts huge costs on business."

But she added: "If firms are not to be driven out of London, they will need to see a clear benefit from the revenue."

She said businesses would now expect improvements for public transport and deliveries into London, and better traffic management around the charging area.

'Flawed'

But the chairman of the London policy unit of the Federation of Small Businesses, Richard Morse, said the scheme would be an "annual �1,200 'poll tax'" on London's businesses.

All this scheme will do is force motorists on to roads previously unaffected by congestion

Angie Bray GLA

"It makes no allowance for essential deliveries to businesses and will particularly hit smaller firms since the charge will be proportionately higher for them," he said.

Angie Bray, the Greater London Assembly's Conservative transport spokesman, said the scheme was flawed, with "the most ill-suited roads selected as boundaries".

Tory transport secretary Eric Pickles has written to transport minister John Spellar, demanding government action to block the new charge.

He said: "It will not cut congestion as traffic will increase around the tax zone border."

 Click here to return