Mayor Sadiq Khan will formally confirm on Friday that he has decided to take the radical option off the table for good after a study found it would not have been financially viable.
The idea was first proposed in December 2020 as one way of generating £500m a year in additional income for Transport for London
But it was dubbed “Checkpoint Chigwell” by Tory critics and Transport Secretary Grant Shapps made clear his opposition to the “undemocratic” nature of the mayor seeking to impose a tax on people living outside London who could not remove him at the ballot box
The levy was even proposed to reach £5.50 a day for drivers of more polluting vehicles.
At the time, Mr Khan was urging the Government to devolve to City Hall the £500m a year paid in vehicle excise duty, or VED “car tax”, by the capital’s motorists. He threatened to impose the boundary charge if he did not get his wish.
But after research by TfL into the feasibility of imposing the levy, Mr Khan has ditched the plan and will instead press ahead with other options – with a major announcement expected later on Friday morning.
A well-placed source told the Standard: “After seeing the modelled impacts versus the costs, the mayor is understood to have rejected the Greater London boundary charge.”
Susan Hall, leader of the GLA Conservatives, said the boundary charge had been a “ridiculous idea from the beginning”.
Mr Khan now has to decide whether to impose a levy of about £2 a day on all petrol and diesel cars to drive in the capital, or extend the ultra-low emission zone for a second time – or do both.
These options were floated by Mr Khan in January as he set out his ambition to reduce road emissions by 27 per cent by the end of the decade.
A clean air charge would affect more than two million Londoners and prove especially controversial as motorists who recently upgraded their petrol or diesel vehicle to comply with last October’s Ulez expansion to the suburbs would still have to pay – as only electric and hybrid vehicles would be exempt.
TfL cannot impose motoring levies with the sole purpose of generating cash, but this is allowed if it is “incidental” to measures introduced to tackle gridlock, such as the congestion charge, or pollution, such as the Ulez.
Mr Khan was ordered to accelerate his plans under the terms of TfL’s latest Government bailout, which awarded it £200m last Friday .
Mr Shapps told the mayor to put income-raising plans out to consultation by the end of June – effectively accelerating the timeframe for another big change to the cost of driving in London.