Boris Johnson has pledged to “carry on” working to convince embassies to pay the Congestion Charge and “fulfil their obligations to their host city”.
The Mayor’s comments were made in a letter London Assembly Chair Darren Johnson after Assembly Members passed a resolution in December calling for action to secure unpaid Congestion Charge fees and fines.
The motion called on the Mayor “to write to the Head of State of every nation with Congestion Charge payments and fines outstanding, demanding payment and to publish the responses of each country. We also call on the Mayor to use every available opportunity to ‘name and shame’ those countries refusing to pay the congestion charge, and invite each Ambassador of those countries to explain to Londoners why they refuse to and agree to publish those explanations on the GLA website”
However in his letter Mr Johnson says such action “would simply provide a highly visible way for these embassies to promote their spurious case”.
As of December more than £31m was outstanding in unpaid charges and Penalty Charge Notices with the US Embassy alone accounting for more than £3.5m. Although the Embassy paid the charge until July 2005 it now refuses to do so claiming it is a “tax” from which diplomats are exempt.
In September Mayor Johnson said Transport for London continues to chase embassies who are withholding Congestion Charge fees and penalties.
The full text of December’s motion reads:
“The London Assembly notes that there is currently at least £28million outstanding in unpaid congestion charge fees and fines by foreign embassies in London, and this figure is growing by the month.
The Assembly congratulates the 70% of diplomatic missions that do pay the congestion charge on time, but regrets that some of the worst offenders include the embassies of the United States, Russia, Germany and Japan.
The Assembly notes that the United States Embassy paid the Congestion Charge between February 2003 and July 2005, further notes that the US government has not asked for a refund of the charges paid at that time, and the Assembly would point out to the US government, and other diplomatic missions, that the Congestion Charge is not a tax, but a specific charge for a specific purpose, the money raised solely being allocated to transport projects.
The Assembly further regrets that Transport for London have given up on chasing the embassies that don’t pay the congestion charge and left it in the hands of the Foreign and Commonwealth Office to do so.
We therefore call on the Mayor to write to the Head of State of every nation with Congestion Charge payments and fines outstanding, demanding payment and to publish the responses of each country. We also call on the Mayor to use every available opportunity to ‘name and shame’ those countries refusing to pay the congestion charge, and invite each Ambassador of those countries to explain to Londoners why they refuse to and agree to publish those explanations on the GLA website”
Well indeed, representations from the Mayor would give the embassies the public opportunity to remind us all that the Congestion Charge is a tax. As indeed the Russian ambassador forcefully did at the time the motion was passed. Whether you support charging or not, it is the definition of a tax that needs to be addressed, not easy shots at diplomats and those who can claim exemption. When Sweden introduced the ‘Congestion Charge’, the Swedish government took legal advice and was told by lawyers that it was a tax. Indeed, following consultations with the EU which has advised member countries that the London scheme is a tax, the lawyers advised the Swedish government to change the name actually to “Congestion Tax”…which it is now called there. When I challenged the then Mayor four years ago to take legal advice here on the basis of the tax status of the London Congestion Charge, he sidestepped the issue. I was not surprised – it was easier to attack the representatives of nations of which you do not approve than establish that they might be acting within both the spirit and letter of the law. Better surely to construct a system which WOULD embrace all if you support the Congestion Charge. But as New York is finding out, it is very difficult. Although the scheme in New York was rejected, lots of time is still being spent on trying to refine a possible charge. Every time they look into it and try to fine tune their plans and say ‘OK we think we’ve got it”, lawyers tell them, “er, no”. They would laugh at the Mayor’s tongue in cheek description of the embassies excuses as ‘spurious’. He cannot mean it. Maybe someone should ask…
Surely it would be easier if the congestion charge was re-named Entry Fee. No tax at all.
Ah Dean, you can call it what you like but the definition of a tax in law sidesteps your own terminology or clever wordings! That is the heart of the problem here – UK bodies can call something a “charge” which is in fact a tax…but it doesn’t alter the fact that it is a tax. Lewis Carroll was good on this sort of thing – “When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean – neither more nor less.’”. On entry fees, there has to be a supposition that someone can be refused entry even if he/she is prepared to pay…now there’s an idea…
Damian -
Please excuse the delay in commenting on your interesting comments.
The British Treasury defined a “tax” in the 1993 “System of National Accounts” as follows:
“7.48 Taxes are compulsory, unrequited payments, in cash or in kind … They are described as ‘unrequited’ because the government provides nothing in return to the individual unit making the payment, although governments may use the funds raised in taxes to provide goods or services to other units, either individually or collectively, or to the community as a whole”.
Why is this important issue not settled in the courts? The fact that the London authorities have not sued suggests that they are dubious about the merits of their case. Or have they sued?
I am no lawyer, but think a case can be made that the original £5 charge was a fee, because those who paid it got in return some relief from congestion. But I am not sure whether the same can be said of the subsequent increase by £3 to £8.
If the roads were commercially operated (as I have argued that they should be, in my 1996 book “Roads in a Market Economy”) could there be any doubt that the charge could be a “fee” and not a “tax”?
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