Business brush off for congestion charge

5 September 2003

Businesses in the Royal Borough of Kensington and Chelsea have given the brush-off to the Mayor of London's plans to extend the congestion charging zone. And the charge is already costing businesses with branches in the existing zone money and customers, according to a survey by the Council.

Although of a small scale, the survey gives a clear indication that retailers in the Royal Borough of Kensington and Chelsea do not want to see the charging zone extended and calls into question the findings of a Greater London Assembly report claiming that congestion charging is having a negligible impact on retail trade.

The findings follow concerns over the economic impact of the congestion charge already expressed by the Federation of Small Business (FSB), and the Confederation of British Industry (CBI). The survey also comes hot on the heels of a Chamber of Commerce survey of companies in which 50 per cent of businesses blamed the charge for a downturn in takings.

Yesterday the John Lewis department store chain revealed that sales at its Oxford Street store had dropped by more than seven per cent since the congestion charge was introduced, and claimed that the charge was penalising shoppers more than commuters.

Questionnaires were sent by the Council to businesses in the Royal Borough that also have branches in the congestion charging zone. These are businesses which are already dealing with the effects of the charge and which would be directly affected by the extension to the charging zone. The sample also reflected the quality and range of shops found in the Borough's shopping areas.

More than eight out of ten companies responding (84 per cent) didn't want to see the charge extended to Kensington and Chelsea, with almost nine out of ten (87 per cent) saying that the charge had had an effect on their business. Some 83 per cent said that since the charge was introduced the number of customers coming through their door had dropped and retail outlets within the zone reported a considerable effect on their business, quoting an average drop in takings of some 15 per cent.

Leader of the Council Merrick Cockell said: "The message from retailers is clear - the proposed extension to the scheme is unwelcome and will have a negative effect on their business, despite the Greater London Assembly's claims that the charge is making no impact on trade. To expand the charge before proper consideration of its economic effects is premature and could inflict significant damage on the area's prosperous economy."

Councillor Cockell continued: "Greater consideration needs to be given to the plans to ensure that the welfare of the Borough's residents and businesses is protected. We do not understand the Mayor of London's impatience to extend the zone, especially as despite the initial relief following the introduction of the charge, business is tough for everyone. The last thing business needs at the moment is an extra burden such as this."

Notes for Editors: Questionnaires were sent to 60 businesses and responses were received from 27 different companies.

For a copy of the results contact Media and Communications.