Clean Air Zones Central Services (Fees) (England) (Amendment) Regulations 2026

Earl Russell Excerpts

Tuesday 9th June 2026 Lords Chamber

[Earl Russell (LD)]

My Lords, I thank the noble Lord, Lord Moylan, for tabling this Motion to Regret. We are broadly supportive of most of it, but we have one central reservation about the framing.

There are seven clean air zones—CAZs—in England using the central service, as set out by the Minister. All of them will be affected by this instrument, with fees doubling from £2 to £4 per transaction from 1 September 2026 and extending for an additional four more years to 2031.

We support clean air zones. As the Minister set out, they are working and are delivering measurable and meaningful public health benefits. In Birmingham, the number of non-compliant vehicles has fallen from over 15% at launch to below 4%, and Bristol now sees close to 90% compliance. Nitrogen dioxide levels in Birmingham are down by 29% compared to 2019. That means fewer hospital admissions, fewer children growing up with impaired lung development and fewer premature deaths. Clean air is not only an environmental issue; it is a public health issue and an issue of inequality.

Our support for the policy is, however, separate from any contentedness with the quality of the instrument. The instrument has fallen short. The Secondary Legislation Scrutiny Committee once again had to step in. I recognise that that is partly because of the work of the previous Government.

The Explanatory Memorandum, as originally laid, contained no information on cost recovery and transaction data and no assessment of the impact on individual local authorities. The committee had to ask for that information and publish it, so that this House could properly scrutinise the measure. That is not how this process should work.

The lack of an impact assessment is also troubling. The Government say that there will be no impact on business, charities or the voluntary sector. While that is technically correct, it is not a complete picture. The cost falls on local authorities, which are responsible for delivering local transport strategies, and the law requires that net revenues from CAZs be reinvested in those strategies. While I recognise that CAZs were not set up to raise revenue and local authorities have known that fees would be subject to review, the committee was right to highlight the real-world consequences: where authorities fund these schemes from CAZ revenues, doubling the central service fee directly reduces the resources available for local transport investment. These changes mean less funding for buses, cycling infrastructure and sustainable transport alternatives.

The scale of that impact is also uneven. Birmingham and Bristol, with the largest volumes of chargeable transactions, are likely to face additional costs in the hundreds of thousands of pounds. Mid-sized schemes, such as Bradford, Sheffield and Tyneside, will face smaller but still material increases. For Bath and Portsmouth, the impact will be more modest. I understand that four local authorities are expected to absorb the increased fee from within their own revenues. Can the Minister say which four those are and what assessment has been made of the impact on their transport investment plans? For the authorities that will instead be supported by central government, what is the expected cost?

I will address the issue of timing. The fee has remained at £2 since 2020 and is now set to double. The department describes this as a timely change. The committee observed that charges should be reviewed more regularly, and we agree with it. If updated for inflation, the fee would be closer to £2.70. Instead, we are seeing it double in a single step, not a routine adjustment.

Since the policy aim is to achieve full cost recovery over the lifetime of the service, are fees being set higher than they might have been had they been previously reviewed? Can the Minister also confirm what the review cycle will be going forward? The period during which these fees are charged is now extended to 2031, but transaction volumes are beginning to fall as these policies are working and we have greater compliance. That raises an obvious question: has the department adequately modelled cost recovery on the shrinking transaction base? If the number of operating zones declines over time, what does that mean for the long-term viability and cost structure of the central service?

I turn to my reservation about the amendment itself. The amendment expresses concern about costs being passed on to motorists. As far as we can tell, there is no evidence for that happening at all in practice. Instead, the evidence suggests that these costs will not be passed on through any higher charges for motorists. The more credible risk is that they will be absorbed within local authority budgets, reducing investment in sustainable transport.

We support the concerns raised by the Secondary Legislation Scrutiny Committee. I press the Government for greater transparency, better analysis and a clearer account of who ultimately pays. To that end, will the department commit to publishing annual data on cost recovery for the central service, so that Parliament is not in the same position again?

Finally, I thank the Minister for his letter to the committee, his engagement with me ahead of this debate, and the words and reassurances that he has already given to the House.