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Evaluate the success (or otherwise) of the congestion charge now in operation in London? In the light of your evaluation and relevant economic arguments discuss the case for introducing congestion charges in other congested areas.

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Evaluate the success (or otherwise) of the congestion charge now in operation in London? In the light of your evaluation and relevant economic arguments discuss the case for introducing congestion charges in other congested areas. The Congestion Charge is a transport strategy to reduce traffic congestion that has been put in to operation in Central London by the current mayor of London, Ken Livingstone. The way it works is that there is a five pound daily charge from Mondays to Friday between 7am to 6.30pm for vehicles that wish to travel in 8 square miles of central London. The program has been has highly rewarding to government revenue. It is expected to raise revenue between a hundred and thirty and a hundred and fifty million pounds per annum, this figure excludes a further thirty million that could be made from penalty charges. 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. ...read more.


The 'Footfall Index', a measure of people visiting retail centers, 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. 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. ...read more.


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. 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. 1150 words ?? ?? ?? ?? ECN 117: Economics in the News 030150498 Mehul Kishor Somani 1 ...read more.

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