GOING WEST – - London Chamber of Commerce and Industry

GOING WEST –Recommendations based on interviews with the directorsof 200 companies in the Western Extension Zonephoto © Nigel HowardPress & Public AffairsLondon Chamber of Commerce and IndustryFebruary 2006

Going West -Recommendations based on interviews with the directors of200 companies in the Western Extension ZonePress & Public AffairsLondon Chamber of Commerce and IndustryFebruary 20061

The London Chamber of Commerce has 10,000 business customers across thecapital, ranging in size from multi-national companies such as BT and Thames Waterto sole traders.Without exception, our policies are always informed by the experiences of ourmember companies. The objective is to ensure that the private sector in London,which is the principal engine of the national economy, is able to operate on a levelplaying field, free from unnecessary hindrance from bureaucrats and politicians alike.It is only by putting London’s businesses first that the capital can maintain itsoutstanding record for creating well-paid jobs, leading the world in service provisionand being Europe’s favourite location for foreign direct investment.For further information or to discuss this report, please contact:Dan Bridgett, director of press & public affairsLondon Chamber of Commerce and Industry, 33 Queen Street, London EC4R 1AP(T: 020 7203 1897 or email: dbridgett@londonchamber.co.uk)This report was researched and compiled by:James Heal, press & public affairs executive (T: 020 7203 1829 or e-mail:jheal@londonchamber.co.uk)Christiane Bruening, press & public affairs executive (T: 020 7203 1882 or e-mail:cbruening@londonchamber.co.uk)James Ford, senior press & public affairs executive (T: 020 7203 1889 or e-mail:jford@londonchamber.co.uk)Linda Palmer, senior press & public affairs executive (T: 0207 7203 1911 or e-mail:lpalmer@londonchamber.co.uk)2

IndexExecutive Summary 6Introduction 8Views on the WEZ 10Value for money?Heading in the wrong direction: why the West?ConsultationConcessionsThe Impact on business 15Concurrence of evidence, conflict of conclusionsThe retail sector: bearing the bruntPredicting the impact in the WEZImpact on employmentTowards a better congestion charge 20Payment optionsOperating hoursMonitoring and assessmentNational road pricing: a smarter alternative?Conclusion 24Companies which contributed to the report 26Appendix: statistical responses to the interview questions 293

Trotters (King’s Road, SW3), Richard Ross, proprietor“I am not against the congestion charge. But it needs to be clear, fair and haveproper aims. Pre-pay, like the Oyster card, would be easier to use. It would be betterto have the congestion charge only in the morning to stop commuting. [National roadpricing] would be one option, but it would have to apply to the whole area within theM25. To single out certain areas is totally unacceptable.”Harrods (Knightsbridge, SW1), Peter Willasey, corporate communications director“Due to certain events that have occurred and in the run-up to the Olympics, we needto be given leg-ups to do better, not more stiles to climb over.”King’s Road Trade Association (King’s Road, SW3), Hazel Smith, chair“[Paying up to 24 hours later] is an improvement, but not good enough. It is stillcriminalising people. I can pay any other bill at a lesser stage than 24hours…[national road pricing} is a much fairer system.”Agius Scooters (Edgware Road, W2), Brian Backman, consultant“[The congestion charge] has helped us as a business because our product,scooters, don’t pay the charge.”Peter Jones (Sloane Square, SW1), Nigel Brotherton, corporate affairs director,John Lewis Partnership“Serious congestion in the WEZ is limited to a few specific hotspots. These could betackled through careful traffic management instead of introducing the WEZ.”Harvey Nichols (Brompton Road, SW3), Joseph Wan, group chief executive“We are unsure whether there has been total transparency to the public at largeabout operating costs compared to revenue generation.”Bourbon Hanby Antiques Centre (Sydney Street, SW3), Les Barrett, proprietor“Do it like in Greece: three days a week only cars with even numbers are allowed onthe road, during the other three days it’s cars with odd numbers. This is very effectivein reducing traffic. At the same time it does not harm business and doesn’t costanything.”Major retailer, Head of public affairs“[The current congestion charging scheme] has had an impact in terms of reducedcongestion but it has come at a price. Certain sectors have suffered. We should pushfor a postponement [of WEZ] until we have overcome difficulties in the retail sector.”Chelsea Potter (King’s Road, SW3), Jason Wadsworth, manager“The proposal to allow payments to be made until midnight the day after you enteredthe zone is more user-friendly but will not improve trading conditions in the WEZ.”Janet Reger International (Beauchamp Place, SW3), Janet Reger, chief executive“People will think twice about driving into the zone, especially now that the price hasbeen increased to £8.”4

Major high street retailer, Public Policy Manager“The Mayor’s position is that business is only marginally affected. We shouldremember that for a 1 per cent loss of sales we lose about 2 per cent in profit. So a‘marginal’ or ‘negligible’ loss of 5 per cent in sales could be a 10-12 per cent loss inprofit, which is significant.”“Its like using a hammer to break a nut. If you want to drive business out of the urbancentre, this is a step in the right direction. We will go where public policy drives us.There will be a movement of investment and employment away from the traditionalcentre.”Hotspur Ltd (Lowndes Street, SW3), Robin Kern, director“Traffic is the lifeblood of the city and if you take the traffic away, the city dies.”TM Lewin (King’s Road, SW3), Fiona Vanda, corporate manager“The WEZ is a predominantly residential area with mainly small shops wherecongestion is not a major problem. I cannot see how the congestion charge willimprove the area in one way or the other. It will be disastrous.”Percy Bass Furnishing (Walton Street, SW3), Jane Morris, proprietor“We should improve water transport and improve transport to schools. Simply useother measures to decrease congestion.”After Noah Retail (King’s Road, SW3), Simon Tarr, general manager“[A charge-free window] is an improvement. But the danger is that the schemebecomes too complicated. Instead the congestion charge should end at 11am. Thiswould stop commuting and allow trade. Also, the charge should be takenautomatically – like they do at the moment with companies that have more than 20vehicles.”C Lidgate, (Holland Park, W11), David Lidgate, proprietor“We are currently using something crude and very damaging with obsoletetechnology. We need a sophisticated system which is flexible to all circumstances.”Guinevere Antiques (King’s Road, SW6), Mark Weaver, director“Some sort of uniform scheme would be better than penalising central London andcentral London businesses.”5

Executive Summary• February 2006 is not just the third birthday of the central London congestioncharge it also marks the start of the countdown to the expansion of thecharging zone when the Western Extension Zone (WEZ) goes live inFebruary 2007. To mark this anniversary the London Chamber of Commerceand Industry (LCCI) conducted detailed telephone interviews with more than200 company directors operating businesses within the proposed WEZ.• Some 82 per cent of those surveyed said that they expected the WEZ to havea negative impact on their business and 90 per cent felt they would see nobenefit from a reduction of congestion in the WEZ. Just 4 per cent anticipateda positive impact on their business and just under 10 per cent felt that thereduction in congestion would improve their company’s performance.• Some 77 per cent of company directors said they expected the WEZ toimpact negatively upon employment levels in the zone and some 36 per centfelt they could have to reduce their own staff levels.• Just under a quarter of those surveyed said they would consider relocating orclosing their business as a result of the WEZ.• Some 96 per cent of respondents said they believed that the Mayor hadignored both public consultations into the WEZ.• In order to gauge accurately the impact of the WEZ on local firms the LCCIpropose to survey the same businesses again two months after theintroduction of the WEZ. This report will serve as a base for comparison withfuture surveys because one of the major criticisms of previous researchconducted in the central London zone was that there was insufficienteconomic data on business performance in the period to the start of thecharge to compare subsequent research against.• Some 77 per cent of those surveyed said that, since its introduction threeyears ago, the current congestion charge scheme had had a negative impactupon business in London whilst just 4 per cent felt the charge’s impact hadbeen positive. Just under a fifth of respondents agreed with TfL’s officialposition, that the charge’s impact had been neutral.• However, the survey found that people were more positive about thecongestion charge’s impact on traffic levels. Some 35 per cent of thosesurveyed said the charge had reduced congestion in the central zone. Justunder two-fifths, however, felt the charge had had a neutral effect on trafficand 26 per cent felt that the charge had not succeeded in reducingcongestion.• The LCCI survey not only aimed to gauge company directors’ opinions on theWEZ but also sought to encourage the business community to suggest waysto improve the scheme and make it more business friendly.6

• A proposal to end the congestion charge at 1pm each day was supported by71 per cent of respondents whilst the creation of a daily charge-free windowbetween 11am and 2pm attracted the support of 55 per cent of thosesurveyed.• Some 51 per cent of those surveyed supported the idea of a national roadpricing scheme whilst 43 per cent were opposed.• As a result of this research, the London Chamber of Commerce is making fivepolicy recommendations to improve the congestion charge:oooooFirstly, that the daily congestion charging period should end at 1pm.We believe that this change will offer a vital life-line to many businesseswithin the WEZ and existing c-zone, especially retailers andrestaurateurs, whilst still deterring drivers from bringing their cars intocentral London during the morning rush hour. By proposing to end thecongestion charge half an hour earlier, (at 6pm) as a concession topushing ahead with the WEZ scheme, we believe that the Mayor hasimplicitly conceded the principle that ending the charge earlier is goodfor business.Secondly, that TfL should be more flexible and proactive in operatingcharge-free periods to stimulate the London economy at key timesduring the business year. In particular, the LCCI calls on TfL tosuspend the charge during the final full week before Christmas – themost important trading week of the year – each and every year.Thirdly, that TfL should consider the introduction of a flexiblecongestion charge Oyster-style pre-payment scheme for the benefitof those drivers who only travel into or through the WEZ or existing c-zone periodically, but not often enough to derive benefit from theweekly, monthly or annual payment options. Pre-pay accounts could betopped up by telephone or online using an adapted form of the currentpayment technology.Fourthly, that TfL agree to support and pay for ongoing independentmonitoring and assessment of the impact of the congestion charge onbusinesses in and around the zone leading to the publication of anannual report. It is vital that business has a role in commissioning andshaping this research and that both TfL and the Mayor’s Office agree toendorse its findings.Finally, if a national road pricing scheme was introduced then TfLshould guarantee it will suspend the congestion charge and,ultimately, incorporate London into the national scheme. Operating thecongestion charge as a stand alone cost means it serves as a tax ondoing business in a specific area. In the meantime, the LCCI expecttechnology to be a key consideration before adopting a nationalscheme. The LCCI is yet to take a formal position on National RoadPricing but believes it to be imperative that the evolution of congestioncharging in London be viewed in the context of the wider debate on roadpricing.7

1. IntroductionThe purpose of this report is to examine the concerns of company directors runningbusinesses in the Western Extension Zone (WEZ); determine how they expect theirbusiness and the wider economy to look once the charge has been implemented;and to determine what modifications to c-charging need to be made if the Mayor is toimplement the extension of the charge with some business support rather than littleor none.It is important to state that unless changes are urgently made, the Mayor’s flagshippolicy will be implemented with the outright opposition of one of his key stakeholders- the business community.This February is the third anniversary of the central London congestion chargingscheme. In one year from now, congestion charging is scheduled to be extendedwest to cover much of Kensington, Chelsea and Notting Hill. The London Chamber ofCommerce (LCCI) has monitored the congestion scheme closely and has kept incontinuous contact with those affected within the area. Maintaining our principle oflistening to businesses, we have conducted detailed interviews with 201 companiessituated in the WEZ. Interviews were conducted with a variety of businesses rangingfrom large high-street chain retailers to small independent traders. As well asretailers and restaurateurs, company directors from a broad range of companieswere consulted including, wholesalers, transportation companies, consultancies,hoteliers, manufacturing and financial services companies.The information and opinions gained from these businesses form the basis of thisreport which aims to assess the potential impact of congestion charging on businessin the WEZ.From these discussions with company directors, the LCCI has gathered a largevolume of feedback which could be used as a basis for reforming the planned WEZand minimising damage to the area’s economy. We have made a number of policyrecommendations based on the information received from businesses in the WEZ,which are set out in the Executive Summary.The LCCI accepts that traffic congestion has an adverse effect on business and wewelcome attempts to tackle the problem. Before the introduction of the originalscheme in central London, the LCCI listed three conditions which it felt should be metbefore the charge was introduced.These conditions were:a) That there was a clear and measurable improvement in public transport before thescheme was introduced.b) That we were satisfied that the practical details of the scheme were workable.c) That there was no significant damage to business as a result.The LCCI remains unconvinced that conditions a) and b) have been met and fromour surveys and interviews with businesses affected by the charge, it is clear that thecurrent system of congestion charging has had a significant and generally negativeimpact on business.8

London’s economy has suffered some serious blows in recent months. The generalslowdown in the retail and manufacturing sectors has been exacerbated by the falloutfrom the terrorist attacks and the continued and significant threat of terrorism inthe capital. The LCCI’s London Monitor survey of 441 companies in and around thecapital in the final quarter of 2005 showed that business confidence in London’seconomy is in its third consecutive quarter of being negative. This is the longest runof negative confidence since the survey started seven years ago. 1 Fears about rawmaterial prices, an unspectacular Christmas for retailers, a depressed tourist sector,flat house prices and concerns over debt and pensions all contribute to the gloomyoutlook. It is on these foundations that the GLA is looking to extend a chargingscheme which businesses in the current zone have claimed has a negative impact ontheir turnover.9

2. Views on the WEZValue for money?The Mayor claims that the Western Extension will raise extra money that can beinvested in public transport. Despite these claims, there is evidence to suggest thatthe extension is barely financially sustainable, let alone profitable. Concerns aboutthe financial viability of the congestion charge have also been raised by interviewees.Joseph Wan, group chief executive of Harvey Nichols, is ‘unsure whether there hasbeen total transparency to the public at large about operating costs compared to therevenue generated’.The installation of what Simon Burnett, proprietor of Pure Parking, called the ‘terriblyinefficient scheme’, will cost £118 million, yet it is forecast that it will generate only£25 to £40 million of additional operating profit a year. Consequently the WesternExtension is assumed to operate at a deficit until 2010. This has also beenrecognised by the Department of Transport (DfT) which rated the scheme as havinga ‘low’ or ‘poor’ overall benefit. 2 Kate Drafter, proprietor of Portobello Wholefoods,said; “public transport in London is badly served. I cannot see that the money madeby the congestion charge has been reinvested in public transport. As the system wasso expensive to set up in the first place the money has been used to cover thosecosts.” Other interviewees, like Anne Diego, store manager of Pepe Jeans, evensuggested that, ‘the level of service decreased after the introduction of thecongestion charge. The money raised is not reinvested in public transport’.Not only do high installation and administration costs undermine financial viability butadditional yield is diminished because a significantly higher number of motorists willbe entitled to the 90 per cent residents’ discount.The government is currently discussing the introduction of more flexible and costeffective road pricing schemes like the ‘tag and beacon’ system which would makethe congestion charge programme obsolete as soon as 2009. ‘Tag and beacon’technology functions through a vehicle tag responding to radio waves from roadsidebeacons. Early trials showed that this technology is 99.8 per cent accurate in taggingpassing vehicles compared with the 70 per cent accuracy rate from the currentcamera system. 3 The LCCI therefore believes that the very costly introduction of theWEZ is an unjustifiable, short term investment of public money.Heading in the wrong direction: Why the West?Our research has shown that businesses in the WEZ are concerned as to why awestward route was chosen for extension and are anxious about possible negativeimpact on their business as a result of the charge. Those legitimate concerns are ofgreat importance especially when considering that businesses are alreadyperforming with low levels of growth. The LCCI conducted research on howbusinesses in the WEZ rate the current performance of the London economy ascompared to how their own business is performing. The results show that on a scaleof 1 (very bad) to 10 (very good), respondents on average (mean) rated theirbusiness performance at only 5.7. The mean rate for the London economy wasranked slightly lower at 4.8. Considering the current low levels of consumer10

confidence and the fragile state of the London economy in general, the LCCI isunsurprised by this response. When the survey is repeated in the Spring 2007, theLCCI would expect to see a cyclical improvement in business confidence to havetaken place. If this is not the case, then the role of the WEZ will need to be examinedclosely.According to the Mayor, the reason for extending the congestion charging zonewestwards is ‘simply because the north and the south have no decisive boundariesbefore you get to the circular roads, and the west has more congestion’. 4How strong is the case for a westward extension of the congestion charging zone?Reducing heavy congestion is important to business development and the LCCIwelcomes attempts to achieve this. We believe that under certain conditions (seeintroduction), a congestion charge scheme in the heavily congested, non-residentialWest End can be beneficial. The LCCI believes that a western extension of thecongestion charging zone is not a good way of achieving the goal of fosteringbusiness development for a number of reasons. Similar concerns have been raisedby many interviewees. The retail marketing manager of an interior design store,believes that the ‘central charging zone is more suitable for congestion charging thanthe residential west’. LCCI research has shown that an overwhelming majority ofbusinesses are against the WEZ, and many feel that there is no valid reason toextend the zone. As Peter Willasey, corporate communications director of Harrods,said: “We should properly debate why we are doing this in the first place.”Firstly, heavy congestion is not a major problem in the WEZ as a whole, andaccording to Nigel Brotherton, corporate affairs director of John Lewis, ‘seriouscongestion … is limited to a few specific hotspots’. TfL argues that the WEZ is thesecond largest congestion zone in London. However, many retailers like RupertOtten, managing director of Wolseley Fine Arts Ltd, believe that ‘it is a nonsense tocall this area congested’. TfL base their argument for the western extension on motorvehicle based speed surveys, which only consider main roads. However, theseaccount for only about 10 per cent of roads in the extension zone; small residentialroads tend not to be severely affected by congestion. 5 Despite the fact that there arefour times more residents’ cars in the WEZ than in the central zone, none of the mostcongested routes in London are located in the proposed western extension zone. 6Businesses in the WEZ do not believe that the extension of the congestion charge toWest London can be justified by referring to heavy traffic. According to the storemanager of a clothing shop ‘we do not need congestion charging in the WEZbecause congestion is not a major problem here’. Greg Sherwood, marketingmanager of Handford Wines Ltd, believes that ‘congestion is a lot lower in this areasince the original zone was put into place’ and that therefore further congestioncharging is unnecessary.To compound the fact that the western extension will play no role in tackling ‘traffichotspots’, it has several adverse effects. By some calculations, extending thecongestion charge westwards will serve to increase congestion in the existing zoneby 5 per cent as 70 000 drivers currently deterred from driving into the zone by the£8 a day charge would now be entitled to the 90 per cent residents discount. 7Therefore the western extension does not contribute to easing the wider problem ofcongestion in areas where it is really needed. Business opinion would clearly bebetter disposed to a more targeted, flexible and cost efficient scheme like the tag andbeacon system as proposed by the Transport Secretary (see ‘Recommendations’).11

Secondly, as Annie McDonald, manager of Andea Jewellery, points out: “there are ahuge amount of small businesses … here which is different from the City.” Unlike thecentral zone, the WEZ is dominated by small and medium-sized businesses whichare, due to a smaller profit margin, much more vulnerable to drops in footfall and thusprofit than big retail stores in the West End. Consequently Terry Seraphim, storemanager of Suede, believes that ‘only big stores will survive if the WEZ comes intooperation. Small businesses do not have the necessary financial backing’. Previousresearch by the LCCI found that in the existing c-zone 84 per cent of retailersreported a fall in takings during the first 18 months of the scheme. 8 If the WEZ has asimilar impact on SMEs, it is very likely that that many of them will face closure. Thecorporate communications manager of one department store was ‘anxious that thereis little or no credible evidence about the impact. There is a real difference betweenthe two areas. The retail sector is probably more important to the western area thancentral London’.Finally, as compared with the existing c-zone, the WEZ is primarily a residential area,with 230 000 residents compared with 150 000 in the current zone. 9 LCCI researchhas shown that many directors in the WEZ, such as Balram Puri, director ofPomodoro Clothing Company Ltd, believes that, ‘it is very unreasonable to includesuch an area,, because people most affected are those reliant on driving for theireveryday life. Many interviewees who supported the scheme in the existing c-zone,however, believe that it is unfair to punish residents with a congestion charge.According to Fiona Vanda, corporate manager of T.M. Lewin: “The WEZ is apredominantly residential area with mainly small shops where congestion is not amajor problem. I cannot see how the congestion charge will improve the area in oneway or the other way. It will be disastrous.”Those factors clearly challenge the need and justification to extend the congestioncharging zone. In addition, there is less public transport provision in the WEZ ascompared to the central zone. Richard Ross, proprietor of Trotters Children’s Wear,argues that: “it is a residential area, and therefore not very well served, except formajor routes. Public transport is fantastic in the central zone and that is why thescheme is working there.” Many interviewees, like Hazel Smith from the Kings RoadTrade Association, believe that ‘people receive mixed messages from [Mayor]Livingstone. He wants people out of their cars whilst offering no alternative. Publictransport is generally too expensive and massively overcrowded’. Congestioncharging is almost certainly not needed in the WEZ for the aforementioned reasons.This is exacerbated by the prospect that the introduction of the scheme would have agreater impact on businesses based in the WEZ than companies in the existingcentral zone because west London public transport provision does not represent analternative to using the car. Greg Sherwood, marketing manager of Handford WinesLtd, feels businesses in the WEZ will suffer severely from the congestion chargebecause ‘it is no good penalising motorists if it’s not practical for people to take publictransport’.ConsultationOne of the most contentious issues about the proposed western extension are thetwo public consultations. Despite the overwhelming opposition towards the WEZ theMayor approved plans to extend the congestion charging zone. The Greater LondonAssembly itself passed a resolution saying they believe ‘that the Mayor’s process ofconsultation on his proposed Western Extension of the Congestion Charging Zonehas yet again been a flawed process’.12

Some 52 per cent of interviewees said they had participated in the consultation. But96 per cent said the consultation had no impact on the Mayor’s plans. According toAlison Bearhop, partner of Dinny Hall, ‘the Mayor goes ahead with his plansirrespective of what the people say’. Richard Weininger, financial adviser of City andCounties, feels the consultation ‘was a waste of time and money. They spendmillions on it, but it did not make the slightest bit of difference’.Business’ perception is voiced by Nigel Brotherton, corporate affairs director of JohnLewis, when he said that the Mayor, ‘quite clearly ignored’ the consultation. MichaelSchneiderman, of the kitchen shop Divertimenti, like many other intervieweessuggested that ‘there is no point in consulting people if the outcomes are not takeninto account. The consultation was a complete waste of time’. Similarly Joseph Wan,group chief executive of Harvey Nichols, felt that the Mayor, ‘wasn’t interested inlistening’.ConcessionsIn recognition of the overwhelming opposition that has been expressed in theconsultation, the Mayor’s Office made a number of changes to the original proposalsfor the western extension which, according to the director of one major Londonretailer, are generally ‘trivial when compared to the damage’.Changes included:Earlier charging end time: 6pmThe Mayor agreed that once the western extension zone is operational, the chargingperiod would end half an hour earlier, at 6pm instead of 6.30pm.We believe that the concession of bringing the charge-free period forward by only 30minutes is not sufficient to secure the vitality and viability of businesses in the WEZ.Marcus Wilson, proprietor of 47 Degrees, argues that bringing the end time of thecharge forward by 30 minutes ‘does not change the fact that the congestion chargeinhibits customers who come into the city’.LCCI’s interview-based research has shown that the concession is mostly judged tobe irrelevant: 75 per cent of businesses in the WEZ think that bringing the end time ofthe charge forward by 30 minutes would have no positive effect on trading conditionsand is, according to one clothing retailer, ‘simply trying to win people’s support’.Interviewees who did support the concession, such as Zah Sakthiseelan, storemanager of Oliver Sweeny, mostly suggested that it will ‘only make a slightdifference’. The director of one department store said: “it is a small plus, and shouldbe done for the central zone without going ahead with the WEZ.”Some 75 per cent of interviewees dismiss the concession because the WEZ is aresidential area with mainly small and medium-sized businesses which closebetween 6pm and 6.30pm. Consequently the marketing director of a grocery shop,suggests like many other interviewees that bringing the charging end time forward to6pm ‘is irrelevant, because most businesses do not trade after 6pm’. According toGail Steele, director of Auerbach and Steele Opticians, ‘for retailers the busiest timeis during the day’ and therefore the concession will do little to improve tradingconditions. Jane Morris, like many other retailers, is critical of the concessionbecause ‘it is no help to retailers but only to the catering and entertainment industry’.13

According to the store manager of one book shop on the King’s Road, bringing thecharging end time forward will also not serve businesses that tend to open latebecause their busiest time is in the afternoon, not in the evening. The change ofcharging times will not, therefore, have a major impact on trading conditions forretailers because, as Caroline Jones, store manager of Joseph, points out: “retailerssuffered for the day, 30 minutes will not make up for that.” LCCI research has shownthat this concession finds greater support amongst restaurateurs whose mainbusiness takes place in the evening. According to a restaurateur on the King’s Road,‘anything will improve the old proposal. This concession will especially help theatresand restaurants’.Extra day to payIntroduction of a ‘pay next day facility’: from September 2006, payments will beaccepted until midnight on the next charging day after a vehicle has entered thezone. Crucially, however, the cost of paying next day is £10. Therefore, those doingso will effectively have been fined two pounds for the extra day’s grace.With 59 per cent of interviewees in favour of allowing more time to pay congestionfees, however, this concession has been rated positively. Michael Conitzer,proprietor of Sports Club, believes the concession is a major improvement ‘becauseit makes it easier to pay, which is most people’s concern’. The adjustment has beenconsidered by interviewees to slightly improve the scheme. The corporatecommunications director of a major retailer said the concession helps by ‘making itmore palatable to people who have been caught out. People will be better disposedto the bureaucracy around the scheme’. One fashion store manager supports themore flexible approach to paying congestion fees because ‘it would give someleeway’. However, many businesses, including the marketing director of one grocerystore, consider the concession to be only a ‘meagre offering’. The proprietor of onefood shop on Portobello Road suggests that the concession ‘makes the schemefairer and more user-friendly. But it will not make people drive into the zone’.14

3. The Impact on businessConcurrence of evidence, conflict of conclusionsIt is reasonable to assume that many of the impacts of the scheme on business in thecurrent area will also be felt by businesses situated in the WEZ. The LCCI hasconducted two retail surveys and one survey of restaurateurs over the past threeyears to gauge the impact of congestion charging on businesses that are locatedwithin central London. The results have consistently shown that businesses basedwithin the congestion charging zone have suffered. Research produced by TfL hasreturned many similar results to the LCCI and yet the conclusions they draw are verydifferent.The company directors interviewed by the LCCI for this report were asked for theirimpressions of the existing c-zone. Some 77 per cent of respondents felt that thecurrent scheme has had a negative impact on business, with 19 per cent perceiving aneutral impact and only 4 per cent feeling that the congestion charge has been goodfor business. Simon Tarr, general manager of After Noah Retail, said: “Thecongestion charge scheme is badly administered, had no major impact on traffic butdid impact negatively on business.”The research conducted by TfL themselves also clearly shows that businesses havenot benefited from the charge. The most positive result concerning business impactthat TfL were able to extrapolate was that 31 per cent of businesses they surveyedreported that it was easier to get to business meetings. 10 As the CEBR points out,this leaves the clear majority - of 69 per cent - who have found that it is no easier toget to business meetings. Furthermore, 73 per cent of TfL respondents found that itwas no easier for employees to travel to work. 11The John Lewis Partnership published sales data that demonstrated the impact ofthe congestion charge on their flagship store on Oxford Street (in the existing c-zone). This data, analysed by Professor Bell of Imperial College, compared resultsfrom before and after the scheme was introduced. Changes in sales patterns wereanalysed by comparing results from the Oxford Street store with its sister stores inother areas of London. This research led to conclusions that the Oxford Street storehad seen a reduction in sales of 7-11 per cent. 12 With small businesses dependenton narrow profit margins, it is clear that many independent shops would suffergravely from a similar downturn in sales and profits as John Lewis recorded. Onestore manager in the WEZ said: “Only big stores will survive if the WEZ comes intooperation, small businesses do not have the financial backing.”The retail sector: bearing the bruntAccording to the CEBR there are 10 per cent more retailers as a proportion of thetotal business numbers in the WEZ than in the existing central zone. The WEZ isheavily dependant on the retail sector and it is almost certain that retail will suffer asa sector more than others. It for this reason that so many retailers have beenapproached for the compilation of this report. Results from surveys of retailers withinthe existing charging zone illustrate the damage to retail that is inflicted by thescheme: some 84 per cent reported a fall in takings since the charge wasintroduced. 13 Of those who reported a fall in sales or customer numbers, a significant15

62 per cent attributed this fall to the introduction of the congestion charge which is sixtimes higher than the proportion of those who attributed the drop in sales orcustomers to the general economic slowdown (the next highest factor).Despite a slight up-turn in sales figures over the Christmas period, consumerconfidence has been low for a significant amount of time. Ed Stansfield, of CapitalEconomics, has said: “With unsecured debt servicing costs at a record high, weexpect households to remain reluctant to pay for spending by borrowing, helping toensure that household spending shows little recovery this year.” 14 This was borne outby comments made in our survey. Sophie Oliver, director of Coco Ribbon Ltd, said:“The retail economy is already pretty bad… with the congestion charge, you aresaying, ‘don’t come into the area’.” Ms Oliver illustrates how a traffic measure whichparticularly affects the retail sector is seriously unhelpful at a time when the sector isalready suffering.The WEZ economy also relies heavily on the restaurant sector with 10 per cent morerestaurants proportionately in the WEZ than in the central zone. 15 Some of the mostdramatic findings in our previous surveys on the impact of charging on the existingzone have come from restaurants. From our surveys of restaurants, 75 per cent ofrespondents reported that they had suffered a fall in takings since the introduction ofthe original congestion charge. 16 Some 43 per cent of restaurants had reduced staffsince the introduction and 35 per cent had considered re-locating. A total of 79 percent of those surveyed did not support the extension of the congestion charge in theWest. Boris Radanovic, manager of My Old Dutch restaurant, stated that: “I don’t seeany positive aspect at all [of the charge moving west].” Another King’s Roadrestaurateur who had already reduced staff in his restaurant in the central zonepredicts a 15 per cent drop in lunchtime takings and the possibility of having toreduce staff numbers further.Predicting the impact in the WEZInterviewees were also asked how they expected the western extension of thecharge to affect their business. The response was unambiguous with some 82 percent believing that the charge would have a negative impact on their business. JamieGraham, director of Graham and Green Ltd, explained how he viewed the charge:“We’re going to be fined for doing business basically.” Many company directors thatwe spoke to saw the charge as being fundamentally and intrinsically damaging to thebusiness community. Robin Kern, director of Hotspur Ltd, voiced a common concern:“Traffic is the lifeblood of the city and if you take the traffic away, the city dies.”Predictions about how business will be damaged were varied. Andrew Madley,assistant store manager at Bang and Olufsen, believes that the impact has two mainforms: “not only will the number of clients decrease, but we will also have increasedexpenses through delivery.”Whilst the overwhelming majority of businesses predicted a negative impact from theextension of the charge, 14 per cent opined that the charge should have little or noimpact on their business whilst just 4 per cent forecast a positive change to theirtakings. Some sectors and businesses will obviously be affected less than otherswhich was neatly shown by Helen Johnston, marketing manager of Altergraphics Ltd,who said: “I can’t see it affecting our business too much as we are an online greetingcard company.” Representing one of the few companies who feels the charge hasimproved - and will continue to improve – business, Brian Backman, consultant for16

Agius Scooters said of the charge in general: “it has helped us as a businessbecause our product, scooters, don’t pay the charge.”The reduction in congestion is supposed to have a beneficial impact on business but,as was highlighted earlier, businesses in the current zone have seen few benefits.Some 90 per cent of company directors felt there would be no beneficial change totrading through the reduction of congestion. The chief executive of one departmentstore felt that the possibility of any improvement to business was illogical: “unless weassumed all of our customers were coming from within the area”. There are alsoconsiderable fears that the extension of the charge will increase congestion throughthe large number of residents who will gain the discount to be able to drive intocentral London and also through shifting congestion to other areas. The manager ofa manufacturing company in the WEZ said: “we feel it [the extension of the charge]will make matters worse as drivers will try to avoid the zone, causing problems onroutes immediately outside the zone.”It should be noted that GLA Economics and TfL themselves have produced much ofthe data indicating the negative impact congestion charging has upon business. TheLondon Retail Consortium (LRC) have pointed to this fact and further shown thedanger to businesses in the WEZ: “GLA Economics have identified that 48 per centof those who use their cars to travel to the Western Extension would change theirshopping habits. This would account for about a 4 per cent drop in sales, which couldimpact profits by 8 per cent in the extension, dwarfing any economic benefit thatreduced congestion might deliver.” 17 Peter Willasey, corporate communicationsdirector at Harrods, explained how any potential gains through reduced journey timeswould be dwarfed by the loss of customers: “Harrods sits on a major thoroughfare,the A4. It is inevitable that there will be less traffic passing our store so it will beeasier for vehicles to get through but any incentive gained will be lost by the fact thatpeople will be put off using the roads because of the expense of the charge andparking.”Impacting employmentA representative from a major high-street retail chain claimed that the charge was afurther step towards driving business out of the urban centre, stating that: “We will gowhere public policy drives us; there will be a movement of investment andemployment away from the traditional centre.” This raises the possibility that theextension of the charge will not only have a negative impact on sales and profits, butthat it could discourage fresh investment and even drive out some existingbusinesses from the area altogether. The partner of one retailing and manufacturingcompany put the matter succinctly when she stated that: “This will kill another area inLondon.”The CEBR have made estimates on the economic impact of the charge in the WEZ.The figures used are taken from GLA Economics statistics but based upon the reinterpretationof the terms used by GLA Economics and TfL where they haveassociated the terms ‘neutral’ and ‘marginal’ with the figures they have gleaned oneconomic impact. The CEBR have taken these ‘marginal’ figures and translated themback into absolute figures and percentages. The results are predicted to beconservative because of the level of estimation involved yet the conclusions are quiteshocking. Their calculations put the figure at a loss of £236 million in output to localbusinesses with a loss of almost £100 million to the area’s retailers and the samefigure in losses to hoteliers and restaurateurs. Further interpretation of TfL data has17

shown that ‘the combined impact of lower output and higher productivity across thesectors would imply 14,000 fewer jobs in the area if the congestion charge isextended’. 18Douglas Berry, store manager of shoe shop R.Soles, predicts that: “The WEZ willbecome an unattractive location for shopping because of the congestion charge andbecause of the Shepherd’s Bush shopping centre.” Out-of-town shopping centressuch as Bluewater and Brent Cross offer shoppers many of the same high-streetshops but with easy access free parking and the benefit of travelling there withoutpaying a congestion charge. The public policy manager of a major high-street retailersuggests that parts of London will soon be unable to compete with out of townshopping areas: “If you want to drive business out of the urban centre, this is a stepin the right direction. We will go where public policy drives us. There will be amovement of investment and employment away from the traditional centre.”Ironically, a policy designed to get people out of their cars and encourage them touse public transport could actually lead to consumers driving more often and furtherto do their shopping.Mark Weaver, director of Guinevere Antiques on the King’s Road, said that if theimpact from the congestion charge gets worse then ‘I would consider closing thebusiness and renting the property out’. The ‘neutral’ or ‘marginal’ economic impact tothe area quoted by the TfL presumably doesn’t take into account the possibility oflarge numbers of businesses relocating or closing. A worrying 25 per cent ofbusinesses interviewed said that they would consider re-locating or closing if thecharge has a negative impact on profits as they predicted. Whilst it is safe to assumethat not all of those who would consider re-locating or closing would actually take thisdrastic action, it is also reasonable to assume that some businesses which had notpredicted the need for such action could be taken unawares by the degree of impacton their profits. Any closures or relocations will have obvious repercussions for theemployment levels in the area and the London economy more generally. SinceLondon suffers from some of the highest rates of unemployment in the countryalready, it seems particularly unfair that measures are being taken which willundoubtedly impact further on the employment levels of the capital.As well as the possibility that staff numbers would be reduced due to the loss ofprofits or businesses re-locating or closing, there are also other factors involved.Alanafhir Khan, store manager of Jubilee Printers, stresses the potential double blowto employment: “[the charge] will impact twice on employment levels. Firstly the WEZbecomes an unattractive location to work in. Secondly, shops will have to cut theirstaffing levels.” A representative from the luxury Capital Hotel in Knightsbridge pointsout the difficulty that businesses will face recruiting and keeping staff that have totravel into the zone to work. The spokesperson pointed out that shift-working staffwho leave work late at night cannot (because of the late time of their departure orstart time) travel to work by public transport. Employees on the lower end of the payscale will undoubtedly be more likely to suffer.Businesses predicted a negative impact on the employment figures in the WEZ fromthe charge. Some 77 per cent of those interviewed felt the charge would impactnegatively on the employment in the area. Perhaps even more worryingly was thefact that 36 per cent predicted facing the possibility of having to reduce staff numbersin their own business. A further 9 per cent said the issue of staffing levels was‘uncertain’ due to the scheduled introduction of the charge. The effect onemployment from the charge is also predicted to damage the WEZ more than the18

current central zone: “We expect the impact on our staffing levels to be greater inextent in the WEZ than in the central area” (high-street retailer).In the view of the overwhelming majority of company directors interviewed, the WEZis expected to reduce profits and cause relocations and business closures. Theseoutcomes would cause unemployment and make the area less attractive to potentialemployees and therefore eventually to new employers as well. Business will continueto move to out-of-town shopping centres and away from traditional high-streets.Another potential shift is explained by Joanna Booth, proprietor of Joanna BoothAntiques, who said: “I’ve already got rid of two staff, I’ve scaled down and will doantique sales on the internet.” The movement of business to online sales and out-oftownshopping centres will have a profound affect on the area and, in the words of astore manager in the zone, ‘West London will lose its face’.19

4. Towards a better congestion chargeThe congestion charge is one of the most contentious issues in London politics. Thepublic debate over the charge is heated and is often depicted as an argumentbetween those who want the charge scrapped because it is damaging businessesand those in City Hall who consider the scheme a success in reducing trafficcongestion. But the two need not be mutually exclusive. To address this, the LondonChamber of Commerce used this survey as a means of encouraging businesses toengage more constructively with the issue of congestion charging and generate ideasto make the scheme less damaging and more business friendly.The LCCI firmly believes that the scheme needs to be radically re-thought. In itscurrent format, congestion charging is neither practicable nor effective and itsimplications range from damaging to disastrous with regards to the impact onbusinesses in and around the area. One high-street retailer reasoned that it is ‘likeusing a hammer to break a nut’, while David Lidgate, proprietor of C Lidgate said:“We are currently using something crude and very damaging with obsoletetechnology. We need a sophisticated system which is flexible to all circumstances.”Payment OptionsThe difficulty of paying the congestion charge, and the punitive measures that can betaken if you fail to do so, remains one of the biggest criticisms of the scheme. The AAMotoring Trust, a road transport think-tank, has stated that: “The current paymentand penalty processing system is just not fit for the purpose and it could becomeeven worse if the scheme is enlarged.” This conclusion was supported by the LiberalDemocrat group in the London Assembly, which has calculated that Capita paid £4.5million in fines to Transport for London between February 2003 and February 2005for failure to meet targets and in the cost of failed appeals. Considering that thecongestion charge was in operation for 608 days during this period (not countingweekends and public holidays when the charge does not apply), that means thatCapita has been fined just over £7,400 for each day that the congestion charge hasoperated. 19Retailers in particular are concerned about the lack of flexibility in paying the charge.One retail chief executive said he would welcome ‘any movement towards easierpayment’. This view was shared by the head of public affairs of a retail chain, whosaid he would support ‘anything that helps on flexibility’. A previous survey in thecurrent congestion charging zone found that 46 per cent of retailers reported thatthey had experienced administrative problems with the scheme. 20One children’s wear retailer suggested that there should be a pre-pay scheme for thecharge ‘like an Oyster card. That would be easier to use’. The general manager of ashop on the King’s Road, expressed a similar view: “the charge should be takenautomatically – like they do at the moment with companies that have more than 20vehicles.” Christopher Claxton Stephens, director of Norman R Adams Ltd, evensuggested that ‘there should be a reduced rate for business traffic’ whilst anotherinterviewee argued that ‘delivery vans should be exempt’.20

Operating HoursAs discussed earlier in this report, company directors were dismissive of the benefitsthat would derive from ending the charge half an hour earlier, at 6pm rather than6.30pm. However, while this proposal was derided there was widespread support forthe idea of more significant changes to the congestion charge’s hours of operation.The manager of an optician on the King’s Road said that the congestion chargeshould only operate during rush hour ‘because during the day there is no congestionproblem here’.The LCCI survey suggested two different proposals for changing the operating hoursof the charge: creating a charge free window between 11am and 2pm each day orsimply ending the charge at 1pm daily. The proposition that the charge should beterminated at 1pm is based upon the logic that much rush hour traffic at both ends ofthe day would be curtailed by the morning charge and then deliveries and shopperscould be allowed to travel into the zone free of charge in the afternoon. Thealternative suggestion, that of creating a charge-free window in the middle of the day,would allow a delivery window for trade and perhaps the possibility that people couldcome into the city and have lunch and do some shopping.Both ideas were endorsed by the majority of respondents though support wasmarkedly higher for ending the charge at 1pm, which was backed by 71 per cent ofthose surveyed compared with the 55 per cent who supported the charge freewindow proposal.The proprietor of a furnishing shop, said that ending the charge at 1pm ‘woulddecrease commuting whilst allowing businesses to trade’. The proprietor of theBourbon Hanby Antiques Centre said a charge free window ‘is sensible because atthat time of the day there is not much traffic anyway’. Some businesses liked the ideaof the charge free window but felt that it could be longer or should cover a differentperiod. According the partner of a retailing and manufacturing company: “11am to4pm would be better to allow parents to pick up their children.” One restaurateur feltthe charge free window should be four hours not three.However, these ideas were not without their critics. Joseph Wan of Harvey Nicholssaid: “[the charge-free window] was part of our recommendations, but is still notideal.” Yvonne Sakthiseelan, store manager of One Nation, was concerned that thecharge free window scheme ‘would lead to heavy congestion in those hours’, asentiment echoed by the store manager of a King’s Road store, who said: “it wouldonly worsen the lunch hour rush.” Colin Thorpe, manager of Animal Fair, said it was‘too complicated’. The marketing manager of a grocery shop said of the proposal: “itmay have some benefits but, from a staffing point of view, it seems impractical.” Thedirector of corporate communications of a department store puts across theargument held by many of those interviewed when he labelled the idea of a chargefree window ‘confusing’. Fears that a time window would encourage congestion andthat people could get caught in the zone whilst trying to leave in time were alsoamong the concerns raised by interviewees.One director of a retail company said that: “the removal [of the charge] on key dayssuch as around Christmas is helpful.” This echoes the finding of a previous report bythe London Chamber of Commerce, based on interviews with company directors inthe retail, hospitality and leisure sectors in December 2005, which called for the21

suspension of the congestion charge for the whole of the final full week beforeChristmas each year. 21Monitoring and AssessmentTfL has paid for extensive reports analysing the impacts of the congestion charge onbusiness. The obvious problem with this state of affairs is that the organisationcommissioning the analysis clearly has a vested interest in the scheme beingperceived as a success.Objective analysis by independent experts is now accepted policy in a number ofother areas where the actions of government have serious economic consequences.For example, the creation of the Monetary Policy Committee of the Bank of Englandin 1997 and, more recently, proposals by HM Treasury to make the Office of NationalStatistics independent of government. In both cases the moves have sought torebuild public confidence in the integrity and transparency of economic decisionmaking.These sentiments are echoed by the business community surveyed regarding thetransparency of the congestion charge. According to one major high-street retailer,‘to expect TfL to conduct an independent investigation is ludicrous’. The proprietor ofa clothing shop said: “I am not against the congestion charge. But it needs to beclear, fair and have proper aims.” Rebecca Salt, director of communications at EarlsCourt Olympia, said: “I would rather see the whole charge given a review from anindependent body to look at the results and impact on business.”National Road Pricing: A Smarter Alternative?A modern and flexible road pricing system could be more equitable in ensuring themost heavily congested roads really were cleared. The system could be far moreconvenient and easier to pay, it would be more responsive to actual real-time trafficflows, have less of a damaging impact on business in a specific area and it could bemore likely to raise revenue for the capital. If the system was applied nationally, noarea would be specifically penalised and businesses could once again compete on amore equitable grounding.Road pricing had its supporters amongst the company directors surveyed. Some 51per cent of respondents said they considered a national road pricing scheme to be agood idea. Hazel Smith, chair of the King’s Road Trade Association, said such ascheme would be ‘much fairer’. George Khachfe, director of Poliform UK Ltd, said itwould be an improvement if it was instead of the congestion charge. Alan MacKay,general manager of Bill Amberg Ltd, said he had ‘no problem with the idea that heavyroad users pay more than low road users’. The proprietor of a retailer in the zonesaid: “It’s a much fairer system. Why should we have to pay [the congestion charge]to drive in our residential area?” She also added that one solution to congestionwould be to ‘charge the M1 - people coming into London instead of those livingthere’.The proprietor of one furnishing shop said: “It is very unfair to single out one area.We will be isolated from the rest of the city…[national road pricing] is a fairer system.But it must apply to a greater area and mustn’t single out certain areas.” Thissentiment was shared by the director of an antique shop who said: “Some sort of22

uniform scheme would be better than penalising central London and central Londonbusinesses.”The store manager of a clothing shop said he supported road pricing, ‘but thecharges must be minimal’. The proprietor of a London based property trustcommented: “whether the National Road Pricing Scheme is a good idea depends onthe intention: If it is meant to raise revenue it is a bad idea. If it is financiallycompensated and serves to improve roads, it is a good idea.” He was echoed byPaul Brother, store manager of AteSeta who said: “road pricing needs to becompensated. Road tax should be decreased, for example.”National road pricing was not without its critics. Mouloud Hameurlain, store managerof Sloane Health Shop, said road pricing would only ‘relocate the problem withoutsolving it’. Connor O’Callaghan, store manager of Kew, argued that ‘national roadpricing should only apply to new roads, otherwise it is unfair’. The store manager of aprinting shop had a simpler solution: “Increase tax on petrol. That would be fairer.”Interviewees also suggested a number of other changes or alternatives that could beadopted, most of which involved better traffic management rather than charging.Rodney Baldwin, director of Green and Stone, suggested that the King’s RoadFulham Road and Brompton Road could be made into a one-way system. YannisAlexiou, store manager of Carphone Warehouse, said the Mayor should‘pedestrianise King’s Road on Saturdays’ while Barry Black, store manager ofRymans, said that ‘more and cheaper parking places would compensate for thecongestion charge’. Christian Kleibon, store manager of J D Sports, suggested ‘weneed more traffic lights instead of pedestrian crossings’.Katio Bocchetti, store manager of opticians David Clulow, suggested: “We shouldlook at schemes that work in Europe and the ones that are best for the people anddon’t damage business.” The proprietor of a furnishing shop said: “We shouldimprove water transport and improve school transport. We should simply use othermeasures to reduce congestion.”23

ConclusionThe attitude of businesses in west London towards the WEZ remains resolutelyhostile. In fact, if anything, hostility has grown since the major public consultationexercise in summer 2005 with 82 per cent of firms now expecting the charge to havea negative impact upon their business and 90 per cent unconvinced that even areduction in congestion would improve overall trading conditions for their firm. Theincreased hostility can probably be explained by three factors: scepticism that thebenefits of congestion charging outweigh the cost to doing business; anger that theoverwhelmingly negative consultation response was ignored by the Mayor; and aworsening of the prevailing economic and trading conditions within the WEZ.When asked about their impressions of the current congestion charging scheme, just35 per cent of company directors felt that it had been successful in reducingcongestion despite the considerable weight of statistical evidence on traffic flows andjourney times produced by TfL since the introduction of the charge in 2003. Bycontrast, however, 77 per cent of respondents felt the existing scheme hadnegatively impacted upon business in London and only 4 per cent felt the charge hadbeen beneficial. It was notable that business perceptions of the congestion chargediffered greatly from the official position at City Hall despite the considerable effortsmade by both TfL and the Mayor to promote the positive benefits of the scheme witha number of those surveyed calling for independent monitoring and assessment.Over half of those surveyed by the LCCI had contributed to the previous WEZconsultations and 96 per cent of firms said they felt the consultation had no impactupon the Mayor’s decision making. Questions about the results of the consultationoften elicited the most hostile, and emotive, comments from survey respondents.Those surveyed were also dismissive of the time change concession offered by TfLand the Mayor when they decided to press ahead with the scheme. Three quarters ofrespondents said that ending the charge half an hour earlier would have no effect.(The concession on paying the charge up to 24 hours after incurring it was muchmore popular by contrast).The survey also showed that businesses lacked confidence in the London economy,with company directors giving current economic performance in the capital anaverage rating of 4.8 out of ten. Several retailers commented that the timing of theWEZ was all wrong and urged delay to allow business to improve. Just under aquarter of those surveyed said they would consider closing or relocating theirbusiness as a result of the WEZ. Some 77 per cent of respondents expected theextension of congestion charging to impact upon employment levels within the zone,though only 36 per cent of directors said they thought they would have to changestaffing levels in their own store.However, despite the widespread hostility to the idea of the WEZ in its current form,those surveyed were eager to discuss ways of making the charge more businessfriendlyas well as to consider alternative measures of traffic management. Togetherwith a popular proposal to end the charge at 1pm rather than 6pm, respondents alsoconsidered the creation a charge-free window in the middle of the day and the meritsof incorporating the congestion charge into a national road pricing scheme. The lattertwo proposals received mixed support with a number of respondents concernedabout the details of a road pricing scheme and other concerned that charge-free24

window would be ‘too complicated’. There was widespread support for the idea ofmaking payment more flexible, especially amongst the retailers surveyed. Manybusinesses felt that better traffic management, such as one-way systems, trafficlights and even pedestrianisation, offered more practical solutions to congestion inthe WEZ area.Based on these detailed interviews with business leaders, the London Chamber ofCommerce is making five policy recommendations:oooooFirstly, that the daily congestion charging period should end at 1pm.We believe that this change will offer a vital life-line to many businesseswithin the zone, especially retailers and restaurateurs, whilst still deterringdrivers from bringing their cars into central London during the morningrush hour. By proposing to end the congestion charge half an hour earlier,(at 6pm) as a concession to pushing ahead with the WEZ scheme, webelieve that Mayor has implicitly conceded the principle that ending thecharge earlier is good for business. We no longer believe that a chargefree window in the middle of the day is ideal because there is clearconcern that it would increase the already considerable confusion aboutthe congestion charge.Secondly, that TfL should be more flexible and proactive in operatingcharge-free periods to stimulate the London economy at key timesduring the business year. In particular, the LCCI calls on TfL to suspendthe charge during the final full week before Christmas – the mostimportant trading week of the year – each and every year. Again, webelieve that TfL and the Mayor have implicitly conceded this point bysuspending the charge in the period between Christmas and New Year,thereby establishing a precedent.Thirdly, that TfL should consider the introduction of a flexible congestioncharge Oyster-style pre-payment scheme for the benefit of thosedrivers who only travel into or through the zone periodically, but not oftenenough to derive benefit from the weekly, monthly or annual paymentoptions. Pre-pay accounts could be topped up by telephone or onlineusing an adapted form of the current payment technology.Fourthly, that TfL agree to support and pay for ongoing independentmonitoring and assessment of the impact of the congestion charge onbusinesses in and around the zone leading to the publication of an annualreport. It is vital that business has a role in commissioning and shapingthis research and that both TfL and the Mayor’s Office agree to endorseits findings.Finally, if a national road pricing scheme was introduced then TfLshould guarantee it will suspend the congestion charge and,ultimately, incorporate London into the national scheme. Operating thecongestion charge as a stand alone cost means it serves as a tax ondoing business in a specific area. In the meantime, the LCCI expecttechnology to be a key consideration before adopting a national scheme.The LCCI is yet to take a formal position on National Road Pricing butbelieves it to be imperative that the evolution of congestion charging inLondon be viewed in the context of the wider debate on road pricing.25

The LCCI would like to thank the following companies which made on therecord contributions to this report& London Ltd., Retailer, SW347 Degrees, Retailer, SW6A1 Express (London) Ltd., Transportation, W2A.P. Vino Italiano Ltd., Retailer, W10Adel Roostein Display Mannequins Ltd., Retailer, SW3After Noah Retail, Retailer, SW3Agius Scooters, Retailer, W2Alec Drew Picture Framers Ltd., Retailer, SW3All Care Cleaning, Cleaning, NW6Altergraphics Ltd., Retailer, SW10Andea Jewellery, Retailer, W11Andrew Martin International Ltd., Retailer, SW3Animal Fair, Retailer, W11Anthony James & Son Ltd., Retailer, SW3Antiquarius, Retailer, SW3Architectural Components Ltd., Retailer, SW7AteSeta, Retailer, SW3Auerbach and Steele Opticians, Opticians, SW3Austique, Retailer, SW3B & T Antiques, Retailer, W11Bang & Olufsen of Chelsea, Retailer, SW3Beaumont & Fletcher, Retailer, SW6Benihana, Restaurateur, SW3Bill Amberg Ltd., Wholesaler, W10Bourbon Hanby Antique Centre, Retailer, SW3Buchanan Computing, IT supplier, W11Butler and Wilson Ltd., Retailer, W1C. Lidgate, Retailer, W11Cabban and Gaselee Ltd., Estate Agency, SW15Calvin Klein, Retailer, SW3Capital Hotel, Hotelier, SW3City and Counties, Financial Consultancy, W3City Car Club, Transport Services, N7The Carphone Warehouse, Retailer, SW3Chelsea Cinema, Cinema, SW3The Chelsea Fishmonger, Retailer, SW3Chelsea Potter, Restaurateur, SW3Chelsea Sports Centre, Leisure, SW3Claire Mee Designs, Retailer, SW6Coco Ribbon, Ltd., Retailer, W11Cologne & Cotton, Retailer, SW6Costerwise Ltd., Wholesaler, W11Creative Canapés, Outside Catering, Surrey KT9David Clulow, Retailer, SW3De Winter Ltd., Retailer, W8Diagnostic Social & Market Research Ltd., Market Research, SW7Diesel, Retailer, SW3Dinny Hall, Retailer and Manufacturer, W11Divertimenti, Retailer, W10Doucereux, Retailer, W226

Earls Court & Olympia Ltd., Exhibition Centre, SW7Essence Design, Design and Software Supplier, W11European Advanced Radio Systems PLC, Radio Communication, W10Every Body’s Display Ltd. Creative Industry, W10Farley & Co, Property Business, SW7G.F. Electrical, Retailer, W2G.P. & J. Baker, Retailer, SW10Graham & Greene Ltd., Retailer, W11The Grain Store, Retailer, W11Green & Stone, Retailer, SW3Guinevere Antiques, Retailer, SW6Halpen Marketing Management Ltd., Marketing Management, SW3Handman & Collis Ltd., Engineering, W2Hanford Wines Ltd., Retailer, W11Hansens Kitchen Equipment Ltd., Retailer, SW10Harrods, Retailer, SW1Harvey Nichols, Retailer, SW3Henry J. Bean’s Bar & Grill, Restaurateur, SW3Hogg and Son (Chemists), Retailer, W2Hotspur Ltd, Retailer, SW1Hunt & Keal, Retailer, W8The Holding Company, Retailer, SW3Inkerman Ltd., Retailer, W8Interiors of South Kensington, Retailer, SW3J. J. Williams, Retailer, SW3Jack Wills, Retailer, SW3JD Sports, Retailer, SW3Jaeger, Retailer, SW3Jane Shilton, Retailer, SW3Janet Reger International, Retailer, SW3Joanna Booth, Retailer, SW3John Goslett & Co Ltd, Retailer, W10Joseph, Retailer, SW3Jubilee Printers, Retailer, W2Kings Road Trade Association, Retailer, SW3Kew, Retailer, SW3Korres Natural Products – Satiris, Retailer, SW3Lachasse, Retailer, SW7Lee Associates Design Consultants, Design Consultant, SW10Lewis Wayne Dry Cleaning Ltd., Dry Cleaner, SW3Lidgate’s, Retailer, W11The Listening Rooms Ltd., Retailer, SW5Martin’s Properties, Retailer, SW3Monochrome Body and Soul, Retailer, SW3My Old Dutch, Restaurateur, SW3Norman R. Adams Ltd., Retailer, SW3Oliver Sweeney, Retailer, SW3One Nation, Retailer, SW3The Original Levi Store, Retailer, SW3Orthodontics, Dental Studio, SW1Osborne & Little PLC, Retailer, SW3P.P.M. Properties, Property Business, SW527

Pantalon Chameleon, Retailer, SW6Paper Passions, Retailer, SW15Patisserie Valerie, Retailer, SW3Pepe Jeans, Retailer, SW3Percy Bass Furnishings, Retailer, SW3Peter Jones, Retailer, SW1Poliform UK Ltd., Retailer, SW3Pomodoro Clothing Company, Retailer and Wholesaler, W2Portobello Wholefoods, Retailer, W10Portobello Properties, W11Pure Parking, Car Parking, SE11R. Soles, Retailer, SW3Reiss, Retailer, SW3Richard Ward Hair & Beauty, Hairdresser, SW3Rob Harris Productions, W10Ryman, Retailer, SW3Second Nature Ltd., Wholesaler, W10Slick Willies Ltd., Retailer, SW7Sloane Cars, Transportation, SW3Sloane Health Shop, Retailer, SW3Speedlight Ltd., Transportation, W10Sports Club, Entertainment, SW3Strada Shoes, Retailer, SW6Submex Ltd., Consultancy, SW7Suede, Retailer, SW3T.M. Lewin Shirts, Retailer, SW3Theo Fennell, Retailer, SW3Tower Structures Marketing Co Ltd, W2Tribeca New Media, New Media Communications, W12Trotters Childrens Wear, Retailer, SW6Tyre & Wheel Co., Garage, W10The Vestry, Retailer, SW3William Yeoward, Retailer, SW3Villeroy & Boch Ltd., Retailer, SW3Watch Gallery Ltd., Retailer, London SW3Whistles Ltd., Retailer, SW3Wolseley Fine Arts Ltd., Retailer, W11Yves Delorme Boutiques Shop, Retailer, SW328

Appendix: Statistical responses to the interview questions1. On a scale of 1-10 (with 1 being extremely bad and 10 being extremely good), howwould you say the London economy is performing at present?4.8 (mean average)2. On a scale of 1-10, how would you say your business is performing at present?5.7 (mean average)3. This is the 3 year anniversary of the Congestion Charge (as it stands at themoment). What are your impressions of the scheme thus far?A) Regarding impact on congestion: Positive 35% Negative 26% Neutral 39%B) Regarding impact on business: Positive 4% Negative 77% Neutral 19%4. How do you expect your business to be affected (positively or negatively) by theWestern extension of the congestion charge?Positive 4% Negative 82% Neutral 14%5. Will WEZ improve your business through the shortening of journey times/ reducingof congestion?Yes 10% No 90%6. What is your opinion on the current condition of the public transport system in yourarea?Good 38% Bad 52% Neutral 10%7. Do you expect the WEZ to have an impact upon employment levels in the zone?Yes 77% No 23%8. Do you expect the WEZ to have an impact upon your business’ staffing levels?Yes 36% No 53% Unsure 10%9. Would you consider relocating or closing your business as a result of the WEZ?Yes 25% No 67% Unsure 9%10. Did you participate in any consultation about the WEZ?Yes 53% No 47%11. Do you think the consultation had an impact on the Mayor’s plans?Yes 4% No 96%29

12. Will the Mayor’s proposal to bring the ‘end-time’ of the charge forward from6.30pm to 6.00pm make a difference?Yes 26% No 75%13. Will the proposal to allow payments to be made until midnight on the nextcharging day after a vehicle has entered the zone make a difference?Yes 59% No 40%14. Would the scheme be improved if it finished at 1pm?Yes 71% No 29%15. Would the scheme be improved by introducing a charge-free window during thehours of 11.30am and 1.30pm?Yes 55% No 45%16. The Transport Secretary has proposed a National Road Pricing Scheme. Do youthink this proposal is a good idea?Yes 51% No 43% Undecided 6%Note: Due to the fact that percentages are given as whole numbers and thus rounded up or down, thetotal figure may not always equal exactly 100. The margin of error for each question is a maximum of 1per cent.1 LCCI, London Monitor Q4 2005, January 20062 Evening Standard, ‘The C Charge charade’, September 20053 The Guardian, ‘A beacon method for charging’, June 20054 Evening Standard, Charge extension is all up to me, says Ken, September 20055 West London Residents’ Association, Blunder on the Western Front, November 2005 and BBC News,‘Where next for the congestion charge?’ http://news.bbc.co.uk/1/hi/england/london/3493723.stm6 West London Resident Association, Blunder on the western Front, November 2005 and Evening Standard,‘London's 10 worst traffic snarl-ups’, February 20057 The Times, ‘Livingstone takes charge zone farther west despite opposition’, October 20058 LCCI, The Third Retail Survey: The Impact of Congestion Charging on the Central London Retail Sector –Eighteen Months On, January 20059 BBC News, ‘Where next for the congestion charge?’ http://news.bbc.co.uk/1/hi/england/london/3493723.stm10 Transport for London, Congestion charging: Third annual monitoring report, April 200511 CEBR, Will tackling congestion empty west London’s tills? July 200512 Ibid.13 Op. Cit.14 The Times, ‘Shoppers rein in their borrowing’, 5/1/200615 CEBR, Op. Cit.16 LCCI, The Restaurant Survey: The impact of congestion charging on the central London, September 200417 LRC, Proposed Western Extension to the Congestion Charge: LRC Key Messages, June 200518 CEBR, Op. Cit.19 London Assembly Liberal Democrat Group, Capita fined £4.5 million for missing c-charge targets, March200520 LCCI, Retail Survey, Op. Cit.21 LCCI, London’s Christmas Economy: A business perspective on the retail and hospitality sectors, December200530