Fight Ken’s development tax

Building does not oppose the charge. With average speeds in London the same as they were 100 years ago, something had to be done. The congestion charge, which cut traffic by 25% in the first week, might be the answer. But it is not fair to make contractors’ lorries and vans pay because that will stymie development and damage the capital’s economy. Nor is this just an issue for central London. Ken is already planning to extend the zone to Chelsea and Canary Wharf, and cities such as Edinburgh and Nottingham are poised to follow suit.

So, why shouldn’t contractors pay? After all, lorries clog up roads and pollute the air. Perhaps a measly £5 will force them to improve logistics and cut the number of trucks they use. Construction Confederation president John Gains certainly isn’t too fussed. He thinks contractors will simply pass on the charge to clients, although he’s asking members what they think.

Building disagrees with this laissez-faire approach. We think the industry is missing a vital opportunity to establish its right to an exemption from this unintended tax on development. As Skanska’s Keith Clarke points out, such a tax will hit land values and undermine government plans to concentrate development in city centres – a view supported by skyscraper-loving Ken. And what a time to hit construction in London, with the office market on its knees!

The size of the charge is deceptive. Concrete specialists estimate that the annual bill might be as high as £6.4m a firm. Anyone who failed to register their lorries as a fleet by 26 January might have to process 50 bills a day, plus any number of fines. Then there are the hidden costs, such as the charge for vans delivering lunchtime sarnies. Will clients really pay for all this? While the majors might be able to lose some of the cost in their contorted supply chains, small builders won’t have that luxury. No wonder Barry Stephens, head of the National Federation of Builders, part of the Construction Confederation, disagrees with his president and supports an exemption.

Quite frankly, the industry has only itself to blame for its predicament. Even the Corporation of London couldn’t understand why it didn’t lobby for the kind of exemption that cabbies won. But it’s not too late – yet. West End actors are pressing their case, and retailers will no doubt follow suit. The opportunity to force Ken to think again arises because he will have to rectify the charge’s teething troubles – so why not re-examine who pays, too? Building favours a blanket exemption, but a good alternative is Stephens’ idea of a permit for the duration of each project in the zone. First, though, we must establish the right not to pay. Contractors, specialists, unions, and clients such as strategic forum chief Peter Rogers back the call. Please add your voice to the campaign by faxing us the form on page 13, or emailing chopthecharge@buildergroup.co.uk. We’ll deliver your verdict to Ken. The message is: for all our sakes, chop the charge.