C-charge rise from July

Drivers in London will be hit by an £8 congestion charge from this summer.

The 60 per cent increase from the current £5-a-day rate was confirmed by Mayor Ken Livingstone today.

The new levy, which may start as soon as July, could raise an extra £50 million to reinvest in public transport, on top of the current £79 million-a-year revenue.

But it is certain to trigger outrage from motorists and businesses, particularly those already suffering the impact of the original charge.

Fifty major businesses, including Tesco, Boots and Pricewaterhouse Coopers, have already told the Mayor that such a steep rise is unjustified. They say congestion-cutting targets have already been exceeded and the effect of the charge on the economy is unknown.

The £8 levy is the latest in a series of financial demands from the Mayor. Today his share of council tax bills goes up 5.5 per cent. Tomorrow black taxi fares will jump by 5.4 per cent. In January bus fares rose by 13 per cent and Tube tickets by four per cent.

The toll is expected to be accompaniedby a series of sweeteners to reduce the "hassle factor" of paying the charge, which has cut congestion by 30 per cent. Some 70,000 cars a day no longer enter the zone during the 7am to 6.30pm charging hours.

These could include:

Mr Livingstone says concerns that the amount of traffic inside the eight-square-mile zone is creeping back to pre-charge levels has driven the rise and it should generate between an extra five and 13 per cent fall in congestion within the zone.

This does not take into account separate plans to expand the zone into west London by early 2007, which will increase traffic because thousands more drivers will qualify for the 90 per cent residents' discount.

Mr Livingstone's officials refused to discuss the changes, which he first proposed last December, with the Evening Standard.

But Angie Bray, the Conservatives' congestion charge spokeswoman on the London Assembly, said: "Any increase is a rise too far but a 60 per cent increase is ridiculous. Gordon Brown will go spare when he sees such a massive tax hike just weeks before an expected general election."

"Mr Livingstone always promised this was not a revenue-raising scheme. He also promised not to increase the charge for a decade. Yet again we are seeing our promise-breaking Mayor at his best."

Colin Barrow, cabinet member for transport at Westminster Council, said: "This is an enormous blow to businesses and to residents, particularly those in the half of Westminster that is outside the congestion zone who are going to have to pay a fortune just to get to their local shops."

The Federation of Small Businesses said the rise would "badly damage" hundreds of its member firms and the Freight Transport Association, which represents hauliers delivering goods into central London, said it was "appalled".

Even normally sympathetic business organisat ion London First said: " Businesses will be angry at this proposed rise, especially as improvements to the system that we have been calling for have not been made at the current ?5 level."

The AA Motoring Trust said: "The mayor is turning the scheme into a pure money- making exercise. Where will the increases end?" A recent poll of retailers in central London found that two thirds feared an £8 charge would have a negative impact on trade. Another survey found businesses planned to leave the charge zone.