City drivers face tolls `in 15 months'

Cars: Prescott unveils plans to charge urban motorists, but loses battle to spend revenue exclusively on public transport

JOHN PRESCOTT, the Deputy Prime Minister, has lost his battle with the Chancellor of the Exchequer over ploughing the money raised from charges on drivers back into public transport, it was claimed yesterday.

Not all the money raised by charging motorists to drive into urban centres will be used for local public transport schemes. The consultation document, published yesterday, revealed that some of the money raised would be returned to the Treasury and after 10 years the cash can be used for non-transport schemes.

The Government's plans call for a charge on driving into urban centres, parking at work and using trunk roads and motorways. Mr Prescott hailed the schemes as a "radical" approach and said the Government deserved credit for the "unique" decision to allow all the money raised to be used for transport schemes - an idea known as hypothecation.

He said charging systems could be in place within 15 months and that pounds 1bn could be raised annually.

"It's a ground-breaking financial agreement to give local authorities the means to tackle local traffic problems.

"Local authorities in approved pilot schemes will be able to keep all of the money raised to spend on worthwhile local transport improvements - for at least 10 years."

But the consultation document, called Breaking the Logjam, said primary legislation would include powers to require a "proportion of the revenue to be paid to central Government". The document also made clear that the legislation would "not restrict expenditure entirely to transport-related matters".

Both Mr Prescott and John Reid, the Transport Minister, said councils would retain 100 per cent of the revenue for at least 10 years, and that all the money would go into transport schemes. Dr Reid said the reference to expenditure on non-transport matters related to fresh legislation after 10 years.

The Conservatives said Mr Prescott had failed to deliver on his promises. Tory transport spokesman, Bernard Jenkin, said: "Mr Prescott has constantly claimed to have won the battle with the Treasury. However the document gives the lie to his claims."

Unveiling the details of the document, Mr Prescott said the proposed charging regime was not compulsory.

The Government's view is that urban road-users should either be charged to enter a designated area or for keeping or driving a vehicle within a certain area. The plan calls for parking at offices, factories and warehouses to be charged but rules out charging for non-workplace parking such as at shopping centres.

The Freight Transport Association called on the Government to exclude lorriesdelivering to town centres. A spokesman said:

"You cannot deliver 10 tons of groceries using a basket on the front of a bike."