The London Congestion Charge .

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. 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.

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.

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.