Draft Clean Air Zones Central Services (Fees) (England) (Amendment) Regulations 2026
(Limited Text - Ministerial Extracts only)
Read Full debateThe Committee divided: - Ayes: 10 / Noes: 4 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)
I beg to move,
That the Committee has considered the draft Clean Air Zones Central Services (Fees) (England) (Amendment) Regulations 2026.
It is a pleasure to serve with you in the Chair, Mr Wishart. The draft regulations make two amendments to the Clean Air Zones Central Services (Fees) (England) Regulations 2020. First, they extend the period during which local authorities may be charged for using the clean air zones central services website from 31 March 2027 to 31 March 2031. Secondly, they increase the fee that local authorities pay to use the services from £2 to £4 per transaction, as a step towards full cost recovery. The regulations are due to take effect from 1 September 2026.
It may benefit hon. Members if I provide some context. As many are already aware, clean air zones encourage green travel by charging older, more polluting vehicles a fee to enter the zone. They have been introduced selectively, only where evidence shows that they are the quickest way to reduce nitrogen dioxide concentrations in a local area, and where other options would not deliver the same results as quickly. Seven clean air zones are currently operated by local authorities in England: Bath and North East Somerset; Birmingham; Bradford; Bristol; Portsmouth; Sheffield and Rotherham; and Tyneside.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
My understanding is that there are no plans to introduce such zones in either Middlesbrough or Redcar and Cleveland, but is the Minister able to confirm that for the record?
Simon Lightwood
At this time, the Government have no plans to introduce further clean air zones to additional cities. Our focus is to work with local authorities to support them in meeting their legally binding obligations to improve air quality in their localities.
Let me be clear that these clean air zones are working. Between 2019 and 2024, in the city areas that have clean air zones, annual average concentrations of nitrogen dioxide reduced by between 18% and 46%. They dropped by about a third in Bristol, by 40% in Bath and North East Somerset, and by more than 40% in Tyneside. However, it is more than just lines on a graph; these results matter. In the UK, it is estimated that exposure to air pollution has an annual impact by shortening lifespans equivalent to 29,000 to 43,000 deaths.
The impact of air pollution is felt most acutely by the most vulnerable in our society, including older people and younger children. This is about children breathing cleaner air, building healthier communities, preventing illness and protecting our NHS. As a Government, it is one of the most important things that we can do for the public, and it is the least that they deserve. In 2021, the then Government built the “drive in a clean air zone” central services website to support local authorities to introduce and operate clean air zones. The website lets drivers check whether their vehicle meets the air-quality standards for a particular clean air zone and, if not, pay a daily charge to drive in it. A call centre supports people who do not use digital channels to make payments, and it helps local authorities with enforcement.
The 2020 regulations support the implementation of clean air zones. They establish a legal framework for the Transport Secretary to charge local authorities a fee of £2 for each proposed payment through the central services website. The regulations ensured that the £2 fee was payable until 31 March 2027, which is the date by which it was estimated that all local authorities with a clean air zone would have achieved compliance with air quality requirements and exited the central services. The previous Government were not able to achieve that, and some areas are now not expected to meet their air quality target until the early 2030s. Therefore, clean air zones will need to remain in place for longer than envisaged by the 2020 regulations. This instrument, which extends the charging period, is necessary to continue operating the central services.
The legal framework supporting the 2020 regulations has also changed following the UK’s exit from the European Union. As a result, it is no longer possible to rely on the same powers to amend the original regulations. The draft regulations presented to the Committee are therefore made under updated powers introduced by the European Union (Withdrawal) Act 2018.
These draft regulations are an important step to ensuring that the costs of providing the central services are recovered fairly and transparently, rather than falling to the taxpayer. I make it clear that raising the fee to £4 will increase cost recovery to an estimated 90% of the lifetime of CAZ central services from financial year 2020-21 to financial year 2030-31. That is higher than the 69% cost recovery we estimate for the period if the £2 fee were to remain unchanged. It leaves the Government subsidising transactions at 10% of the overall cost, as opposed to 31%. It is a sensible move towards full cost recovery.
I reassure the Committee on the potential concerns that the fee increase will be passed on to motorists. Our expectation is that that will not be the case. Ministers wrote to councils in December last year, strongly urging them not to pass the transaction fee on to motorists through increased clean air zone charges. Tackling the cost of living is this Government’s top priority, and we are ensuring that this change does not add to the challenges that many people are now facing.
To be clear, this is not a war on motorists. This Government are backing drivers and businesses through a range of measures, including extending the 5p fuel duty cut and introducing a 12-month road tax holiday for hauliers. The extension to the 5p duty cut is keeping taxes at a 16-year low and saving the average driver £120.
We are making record levels of investment in our road network, including a £7 billion commitment to tackle potholes and improve local maintenance. Alongside that, we are supporting the transition to cleaner transport, including through the £2 billion electric car grant, which is helping drivers move to zero emission vehicles. It has already helped 120,000 UK drivers to do that since July 2025.
Returning to the statutory instrument, the Government’s understanding is that the fee increase to £4 is manageable, as most of the schemes are currently running in surplus. It is not right that taxpayers across the country should be subsidising surpluses in these few authorities, generated from a scheme that is designed to clean up our air, not generate income.
For example, from the information published by Bristol city council, we understand that its clean air zone surplus has been running to several million pounds a year. This fee increase could reduce that by between £400,000 and £1 million a year in each of the coming three financial years. Should any local authority fall into a shortfall with its clean air zone operating costs, that will be covered by the Government under new burdens rules.
When clean air zones were established, the Government informed local authorities that the transaction fee would be reviewed once costs and income were clearer. Clean air zones have been in operation for several years, and we now have the necessary data from the past 12 to 18 months on costs, revenues and the expected duration of clean air zones to review and amend the fee.
Local authorities are expecting this fee change from 1 September, and officials continue to help them prepare. The Department for Transport will work closely with its delivery partner, the Driver and Vehicle Licensing Agency, to ensure that the new fee is reflected when the regulations come into effect on 1 September.
The regulations will ensure that central services continue to operate effectively in a sustainable and transparent way, while supporting ongoing improvements to air quality. I commend these regulations to the Committee.
Simon Lightwood
I have heard that a couple of drops of olive oil is quite good for temporary hearing loss, so let me reiterate once again that this is not a tax on motorists. We do not expect local authorities to raise their charges to motorists on account of it, and we have expressly asked them not to do so.
Greg Smith
If local authorities pass on the fee, what will be the Government’s response?
Simon Lightwood
We have said, very clearly, that if this results in a shortfall, we will top it up through the new burdens assessment.
This is about good governance. The previous Government said they would review the costs when the data became clear. Good governance means that the Government provide a service that aligns with managing public money to ensure full cost recovery. We are doing this now because the last Government failed to increase the central services fee, which is designed to cover the cost of administering the services since they introduced clean air zones in 2020.
Most motorists entering a clean air zone will pay no charge at all because their vehicle is compliant, and the proportion is likely to continue to increase. The Government’s £2 billion electric car grant has helped 120,000 UK drivers move to zero emission vehicles since July 2025.
Clean air zones are designed to clean up air and should not be used as a revenue raiser for any organisation. I can assure hon. Members that clean air zones are not a revenue raiser for the DFT. By moving the fee to £4, we are still subsidising central services to the tune of 10%. Under the new burdens doctrine, the Department will pay for local authority deficits that arise in their CAZ operations.
The Government have worked closely with local authorities to prepare them for the fee increase and to understand the impacts. Local authorities that currently generate a surplus from their clean air zone will see some reduction in revenue following the fee increase, but no local authority will be left in deficit.
To answer the question from my hon. Friend the Member for Shipley, any move to scrap a clean air zone before there is clear and sustained evidence of improved air quality would be both premature and reckless. Clean air zones were introduced to deliver compliance with legally binding air quality limits. Authorities are required to retain them until compliance has been achieved and maintained.
I hope I have reassured Members that these regulations will ensure that clean air zones continue to operate effectively and fairly. I therefore commend the regulations to the Committee.
Question put.