The Mayor of London and a cross-party group of London Assembly members have written to the Transport Secretary to request that London keep its share of money raised through road tax.

The letter, which was signed by the group leaders of all parties represented in the Assembly, urges Grant Shapps to allow London to keep its share of Vehicle Excise Duty “to help fund its transport network and support a green recovery from the pandemic”.

Londoners contribute around £500 million a year through Vehicle Excise Duty, but Sadiq Khan insists that most of this is often spent maintaining roads “primarily outside London” and that it could be spent maintaining London’s roads and contributing to the running costs of TfL.

Mr Khan has long been calling on the Government to “play fair” by allowing London to keep its share of the money and has proposed a controversial Greater London boundary charge that could raise money if the Government decides not to devolve road tax to the capital.

The proposed charge, which would see drivers paying between £3.50 and £5.50 a day to drive into the city from outside London, has been heavily criticised by London Conservatives.

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Susan Hall, leader of the GLA Conservatives and signatory of today’s letter, said she hoped that the Government will “seriously consider” allowing London to keep its share of road tax and that Sadiq Khan would “drop his boundary charge threat”.

Ms Hall said: “It is unfair that Londoners pay £500 million in Vehicle Excise Duty but very little is spent improving our city’s roads. However, it is equally unjustifiable for the Mayor to impose a boundary charge for non-Londoners entering our city. Sadiq Khan’s entry tax threat is deeply unhelpful and will no doubt undermine efforts to devolve VED, which would require the widespread agreement across the entire country.

“We encourage the Government to seriously consider devolving Vehicle Excise Duty and call on Sadiq Khan to drop his boundary charge threat as a sign of good will. Otherwise, London will end up in the worst of all worlds – no VED funding and a ludicrous boundary charge that will unfairly hammer outer London and our neighbours.”

Sadiq Khan’s Conservative rival in the upcoming mayoral election, Shaun Bailey, this week wrote to residents of outer London boroughs to outline his plans to scrap what he calls the “Outer London Tax” if he becomes Mayor of London.

Mr Bailey said that the boundary charge, which would cost £5.50 for the most polluting vehicles, “will significantly increase the cost of living” for many Londoners.

Any boundary charge would be subject to a “full public consultation, including with non-Londoners” before being introduced, a spokesperson for the Mayor of London said earlier this week.