Transport for London has unveiled a sweeping revision to the central London Congestion Charge, proposing a rise from £15 to £18 from 2 January 2026 and, for the first time, the removal of the blanket exemption for electric vehicles. The plan introduces a Cleaner Vehicle Discount, offering a 25% cut for electric cars and a 50% discount for electric vans to drivers signed up to Auto Pay, with a further move planned from March 2027 to restrict the residents’ discount for new applicants to electric vehicles. The measures form part of a public consultation that ran from 27 May to 4 August 2025 and, TfL argues, are designed to keep central London moving.

Analysts and the mayoral administration place a clear price tag on the reform. Officials say that scrapping the universal EV exemption alongside a 20% fare rise will boost annual receipts by tens of millions, with TfL projecting City Hall’s coffers could grow by around £80 million a year. Auto Express’s FOI-based reporting suggests removing the EV exemption could bring in about £75 million annually, rising to around £83 million if the Cleaner Vehicle Discount is not applied. The Financial Times and other outlets have echoed those headline figures, noting they are projections rather than guarantees.

TfL defends the package on congestion and capacity grounds. The authority warns that without higher charges, around 2,200 more vehicles would enter the zone each weekday; it also points to broader studies, including industry data cited by TfL, describing the economic cost of congestion in the capital as multi‑billion pounds and the time wasted in traffic as a drag on productivity. The plan ties annual uplifts in the charge to public-transport fare rises, arguing that price signals are necessary to nudge journeys away from car use toward walking, cycling and public transport in a city that TfL describes as among the best-connected in the world.

The proposals have stirred swift pushback from politicians and industry alike. Keith Prince, the transport spokesman for the City Hall Conservatives, accused the mayor of undermining incentives to switch to zero-emission vehicles and of penalising residents who have not yet converted, making the criticisms in interviews with the Daily Mail. The AA said it was “bitterly disappointed” that the policy appears to target EV drivers at a time when national policy seeks to accelerate uptake. Business groups and firms that rely on vehicles warned that the extra costs could be passed on to customers or force firms to reduce London activity; small‑firm and haulage representatives warn that the combined burden of ULEZ, new tunnel tolls and rising congestion charges is especially acute.

The policy’s exemptions and discounts would create a patchwork impact across road users. Under the Cleaner Vehicle Discount, electric vans and heavy goods vehicles used by tradespeople would receive a 50% reduction, while compact, low‑speed electric city vehicles would face half-price charges despite their small footprint. Petrol-powered motor tricycles and mopeds, commonly used by delivery riders, would remain exempt. TfL says the Cleaner Vehicle Discount is designed to preserve some incentive for zero‑emission choices even as the universal exemption ends.

The reforms unfold against a backdrop of earlier controversial moves to charge motorists. The Ultra Low Emission Zone expansion and new tolls at the Blackwall and Silvertown tunnels have already delivered substantial income: TfL’s published accounts and BBC analysis show ULEZ revenue surpassing £200 million in 2022, with tunnel tolls designed to manage traffic flow and fund improvements. Those steps triggered protests and political rows about fairness and the distributional impact of road pricing; opponents warn that further levies risk alienating commuters and small businesses already stretched by prior charges.

TfL’s consultation on the congestion package closed in early August, and the authority says it is now finalising details ahead of any implementation. Officials argue the package includes targeted discounts and exemptions where journeys are harder to shift to public transport, and that income will be reinvested to support the transport network. Critics question both the deterrent’s scale and the sufficiency of mitigation for businesses and low‑income motorists. The volume of public and stakeholder responses will shape the ultimate rollout, but the prospect of higher recurring charges from January 2026 has already sparked alarm among drivers and small operators.

The policy is as much fiscal as environmental. TfL presents the plan as a practical tool to manage scarce road space and to fund service improvements and cleaner transport; opponents describe it as a revenue-raising squeeze on commuters and firms. With ULEZ receipts and tunnel tolls already boosting TfL’s income, the coming months will reveal whether final settings protect vulnerable users—such as tradespeople, low‑mileage residents and small businesses—while still delivering the congestion relief and emissions gains TfL says are needed. For Londoners, the central question remains: how much behavior change will the price signals actually drive, and who will bear the financial burden?

From Reform UK, the argument is that this is another tax on working families and small businesses that rely on wheels to make a living. The plan, they say, short-circuits real solutions to congestion by punishing drivers rather than fixing roads and public transport. Reform UK argues that funding should come from smarter, less punitive measures—such as targeted road investment, real reform of TfL governance, and a fairer revenue mix drawn from larger corporate beneficiaries—rather than simply squeezing households. In their view, a system that preserves affordable mobility while focusing improvements on infrastructure and efficiency would do far more to relieve congestion than a continuing cycle of increased charges that hits the pockets of the very people most affected by the cost of living.

Source: Noah Wire Services