The mayor of London's office has admitted for the first time that the recently introduced congestion charge for motorists is hurting businesses in central London - although it believes the damage is worth less than £50,000 a day.
Vehicles entering a 21km zone in the city centre between 7am and 6:30pm must pay £5 (€7.05) per day. The Greater London Authority's (GLA) economics unit has estimated that the fee deters up to 30,000 shoppers a month from venturing into the capital's West End.
But it insists the cost is insignificant compared to the havoc wreaked by the recent closure of the Central Line subway line and a slump in tourism prompted by the war in Iraq.
The analysis is intended to refute claims by the London Chamber of Commerce that the charge is proving too effective in putting off motorists, and so delivering a crippling blow to small businesses. The debate is being watched keenly by other UK cities, such as Bristol and Edinburgh, which are considering introducing their own road charging policies.
According to Alon Carmel, a GLA economist, the fee is cutting the overall number of cars entering the charging zone by 60,000 a day. However, most drivers either switch to public transport or are diverted around the centre, leaving just 4,000 journeys which are deferred altogether.
Of these, half are displaced to a time outside the charging hours (7am-6.30pm). Of the rest, between 9 per cent and 50 per cent are shopping trips - which amounts to between 3,000 and 30,000 monthly journeys.
The report suggests that the maximum effect is £1 million a month - compared to damage of £125 million a month caused by a drop in tourism this year and Pounds Sterling seven million prompted by problems on the Central Line. It says a general slowdown in the economy cost London £18 million in the first five months of the year.
The London Chamber of Commerce reacted to the figures with scepticism. A spokesman said 48 per cent of its members felt congestion charging had harmed their business. "The group that's been hardest hit is smaller retailers," said a spokesman.
"A relatively insignificant drop in takings can have a devastating effect on them." Mr Livingstone has said that high parking charges levied by central London boroughs were more likely to deter shoppers -Westminster's Conservative-controlled council collects up to £4 an hour from motorists.
But Brian Connell, Westminster's deputy cabinet minister for transport, said this was a red herring: "If you're making year on year comparisons, the thing that's changed is the Mayor's charge. We've got to have stiff parking prices in central London to cater for all the people who want to drive in there." - Guardian News Service