Sadiq Khan and leaders from all five of the London Assembly's political parties have urged the transport secretary to allow Transport for London (TfL) to retain the £500m it raises every year in Vehicle Excise Duty (VED).

Led by the Mayor of London, the Assembly has shown a united front in calling for the government to give London its "fair share" of the funding, with the option even proposed as alternative to the Greater London Boundary Charge.

In a letter, the leaders of all London Assembly political parties say that approximately £500m of VED is collected from owners of vehicles in London annually yet the capital does not receive any of these funds.

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They say the money can go towards fixing TfL’s battered finances, but Shapps has already expressed doubt about the proposal, saying it would not be fair on the rest of the country.

The transport minister said this morning (February 10) that Sadiq Khan cannot "just raid the national budget" to fix TfL's ailing finances.

Speaking to the Transport Select Committee, Shapps said it wouldn't be fair on taxpayers to fund services not available outside London

“We’ve got to make sure that we’re not funding things for London that our own constituents don’t enjoy”, Shapps said.

Among Sadiq Khan's financial stability plan for TfL, if he is elected as Mayor once again, would be a possible boundary charge for those entering London from neighbouring areas, such as Dartford, Kent.

Those with vehicles registered outside the capital would be charged £3.50 to enter, a plan which has proved controversial, although the changes would not come into effect immediately.

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Responding to the VED suggestions, Shapps said: "I don’t think he can simply raid the national budget and say ‘Well if I had a bit of that I’d be okay’. I’m sure he would, but it’s not the way forward.

“It’s very easy to charge people who are not your electorate. Boundary charges would be a challenge the principle of no taxation without representation.”

A spokesperson for the Mayor said: “Ministers have failed to play fair by Londoners when it comes to financing our world-renowned transport system, and as the Transport Secretary is well aware, the Mayor has repeatedly urged Ministers to allow London to retain the £500m of Vehicle Excise Duty paid by Londoners every year but which is currently spent almost exclusively on maintaining roads outside the capital.

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“If the Government do not agree, other ways of raising money to overcome the unprecedented financial challenges TfL faces as a result of Covid may be needed – such as asking people who live outside the capital and make journeys into Greater London by car to pay a modest charge, which would be reinvested in London’s transport network.

“It is not fair on London that our drivers should subsidise the rest of the country’s roads and get nothing in return.”