Tweet
US stages revolt against the British
LONDON — A tax revolt is pitting the government of a former colony famed for dumping tea in Boston Harbor against a British mayor intent on ending gridlock.
On July 1, the U.S. Embassy in Grosvenor Square — in London's congestion-charge zone — stopped paying the 8 pounds (about $14) daily charge that Mayor Ken Livingstone has imposed on motorists who drive into the city center. Diplomats are exempt from taxes by international law, the embassy says.
Livingstone doesn't see it that way. The combative mayor already faces battles with businesses over the commercial impact of the congestion charge and with residents of west London over plans to extend the zone in 2007. Even so, he has opened a new front with the American diplomatic mission.
"The charge is not a tax," he says. "When British diplomats are in America and they go on a toll road, they have to pay the tolls."
The congestion charge, inaugurated in 2003 at 5 pounds and increased to 8 pounds in July, applies to a 13.6-square-mile area of central London. It is enforced by cameras that check license-plate numbers to see whether cars have registered and paid to enter the zone. Those who fail to pay are subject to penalties starting at 50 pounds. Taxis, emergency vehicles and disabled drivers are among those who are exempt.
Tony Travers, urban expert at the London School of Economics, says the 60% increase in the charge in July buttresses the embassy's argument.
"By putting it up to raise money, it looks much more like a good old-fashioned tax," he says. But he says the U.S. revolt is still surprising. "You might think this was something they could grit their teeth and pay. I can't believe it's preying on the Federal Reserve or Alan Greenspan's mind."
At a recent session with foreign media, the mayor suggested that the U.S. Embassy's stance was linked to the arrival of Ambassador Robert Holmes Tuttle, who presented his credentials at the Court of St. James on July 14. Tuttle is certainly no foe of cars; he is co-managing partner of Irvine, Calif.-based Tuttle-Click Automotive Group, one of the largest car dealerships in the USA.
"The new American ambassador, having appeared in London, has decided his staff shouldn't pay any charge," says Livingstone, an advocate of public transit who takes the subway to his City Hall office.
Embassy spokeswoman Susan Domowitz says the dispute predates Tuttle's arrival. "After multiple attempts to work out a solution with UK authorities, we decided to cease paying the tax in spring of 2005," she said in an e-mail. Non-payment began July 1. She didn't specify how many embassy vehicles are affected.
"It's the view of the United States government that all direct taxes on diplomats and diplomatic operations, including this one, are prohibited by the Vienna Convention," she said.
The Vienna Convention on Consular Relations, adopted in 1963, exempts diplomats from paying national, regional and local taxes.
The British Foreign Office says diplomatic immunity does not apply to parking charges or the congestion charges.
Other major embassies apparently are toeing the line. The Japanese Embassy, located in Piccadilly in the heart of the zone, says every embassy employee is supposed to pay the congestion charge.
Though Livingstone says the matter will have to be resolved in court, diplomacy seems a more likely route to settlement. Domowitz says the U.S. government plans to have discussions with British authorities in November on the congestion charge and other tax issues.
Some British business groups opposed to the charge agree with the embassy analysis that it's really a tax.
Rex Garratt, spokesman for the Forum of Private Business, calls the pending extension of the charging zone to Knightsbridge, Kensington and Chelsea "a cynical move by Ken Livingstone to impose a stealth tax on visitors and shoppers."
The forum plans to stage a mock funeral for London businesses down Kings Road, Chelsea's main shopping street, this month.
"The evidence is that the impact on business is broadly neutral," responds Richard Dodd, a spokesman for Transport for London, the mayor's transit unit.
He adds that the charge is not a tax because it's optional. "If you don't drive into the zone, you don't have to pay. The whole point of the congestion charge is to encourage people to use public transport."
On July 1, the U.S. Embassy in Grosvenor Square — in London's congestion-charge zone — stopped paying the 8 pounds (about $14) daily charge that Mayor Ken Livingstone has imposed on motorists who drive into the city center. Diplomats are exempt from taxes by international law, the embassy says.
Livingstone doesn't see it that way. The combative mayor already faces battles with businesses over the commercial impact of the congestion charge and with residents of west London over plans to extend the zone in 2007. Even so, he has opened a new front with the American diplomatic mission.
"The charge is not a tax," he says. "When British diplomats are in America and they go on a toll road, they have to pay the tolls."
The congestion charge, inaugurated in 2003 at 5 pounds and increased to 8 pounds in July, applies to a 13.6-square-mile area of central London. It is enforced by cameras that check license-plate numbers to see whether cars have registered and paid to enter the zone. Those who fail to pay are subject to penalties starting at 50 pounds. Taxis, emergency vehicles and disabled drivers are among those who are exempt.
Tony Travers, urban expert at the London School of Economics, says the 60% increase in the charge in July buttresses the embassy's argument.
"By putting it up to raise money, it looks much more like a good old-fashioned tax," he says. But he says the U.S. revolt is still surprising. "You might think this was something they could grit their teeth and pay. I can't believe it's preying on the Federal Reserve or Alan Greenspan's mind."
At a recent session with foreign media, the mayor suggested that the U.S. Embassy's stance was linked to the arrival of Ambassador Robert Holmes Tuttle, who presented his credentials at the Court of St. James on July 14. Tuttle is certainly no foe of cars; he is co-managing partner of Irvine, Calif.-based Tuttle-Click Automotive Group, one of the largest car dealerships in the USA.
"The new American ambassador, having appeared in London, has decided his staff shouldn't pay any charge," says Livingstone, an advocate of public transit who takes the subway to his City Hall office.
Embassy spokeswoman Susan Domowitz says the dispute predates Tuttle's arrival. "After multiple attempts to work out a solution with UK authorities, we decided to cease paying the tax in spring of 2005," she said in an e-mail. Non-payment began July 1. She didn't specify how many embassy vehicles are affected.
"It's the view of the United States government that all direct taxes on diplomats and diplomatic operations, including this one, are prohibited by the Vienna Convention," she said.
The Vienna Convention on Consular Relations, adopted in 1963, exempts diplomats from paying national, regional and local taxes.
The British Foreign Office says diplomatic immunity does not apply to parking charges or the congestion charges.
Other major embassies apparently are toeing the line. The Japanese Embassy, located in Piccadilly in the heart of the zone, says every embassy employee is supposed to pay the congestion charge.
Though Livingstone says the matter will have to be resolved in court, diplomacy seems a more likely route to settlement. Domowitz says the U.S. government plans to have discussions with British authorities in November on the congestion charge and other tax issues.
Some British business groups opposed to the charge agree with the embassy analysis that it's really a tax.
Rex Garratt, spokesman for the Forum of Private Business, calls the pending extension of the charging zone to Knightsbridge, Kensington and Chelsea "a cynical move by Ken Livingstone to impose a stealth tax on visitors and shoppers."
The forum plans to stage a mock funeral for London businesses down Kings Road, Chelsea's main shopping street, this month.
"The evidence is that the impact on business is broadly neutral," responds Richard Dodd, a spokesman for Transport for London, the mayor's transit unit.
He adds that the charge is not a tax because it's optional. "If you don't drive into the zone, you don't have to pay. The whole point of the congestion charge is to encourage people to use public transport."
Suprised that I haven't seen a thread on this.
Comment