Embassies refuse to pay capital's congestion charge

Since early summer, staff at both embassies have been amassing fines, believed to run into thousands of pounds, because of their refusal to pay the £8 daily charge - claiming it is a tax, from which diplomats are exempt.

Although all other embassies are believed to be paying the charge, many might now decide to follow the lead of America - which has the most embassy staff - and Germany.

Both embassies are likely to figure prominently on the Foreign Office's next "list of shame" of parking fines and other infringements by diplomats - to be published later this year.

The £8 charge - which has been criticised by many businesses and residents - applies to all cars entering the central London area during office hours from Monday to Friday. However, residents, who would include many diplomats, qualify for a 90 per cent discount.

A spokesman for the US embassy said its diplomats always paid parking charges and fines but it had received advice from the State Department in July that the charge was a tax and, under the 1961 Vienna convention on diplomatic relations, was not enforceable on diplomats. "We consider it a tax and it is the view of the US government that all direct taxes on diplomats, including this one, are prohibited by the Vienna convention."

A German embassy spokesman said: "We received a memo from Berlin several months ago which explained the congestion charge is considered to be a tax and therefore diplomats are exempt."

Transport for London said that so far as it could establish, the two were the only embassies refusing to pay the charge; the US has formerly been a subscriber to its fleet payment system but had withdrawn in July. Fines of up to £150 could be levied for non-payment, but could not be enforced against accredited diplomats. Cars which were clamped for repeated non-payment would be released if diplomats asserted their status.

As with parking fines, the unpaid charges would be passed on to the Foreign Office for action through diplomatic channels, said the spokesman.

The spokesman added: "The congestion charging scheme gives no privileges to any VIPs, including the Mayor, MPs, Assembly members or councillors, therefore, we believe diplomats should pay."

The Foreign Office said: "All diplomatic missions are expected to pay the charge, as they are expected to pay parking fines for which they cannot claim immunity. However we cannot enforce these charges against those enjoying diplomatic status, but we do publish a list of the worst offenders. It is likely the US and Germany will now figure on the list."

Graham Tope, leader of the Liberal Democrat group at the London Assembly said: "This is not Baghdad, this is London, and they should respect the rules of the country they are guests in." But Angie Bray, a Conservative member of the Assembly said: "I agree with the US that the congestion charge is a tax. It is a regressive tax having a devastating effect on business in London.

"Most of us have been making this point for some time. The Americans may only just be waking up to the reality of having Ken Livingstone for Mayor."