House of Lords Approves Doubling Clean Air Zone Processing Fees from September 2026

The House of Lords approved regulations that double the transaction fee local authorities pay for Clean Air Zone processing from £2 to £4 beginning in September 2026. A Conservative peer tabled a regret amendment arguing the increase would add costs for drivers facing high fuel prices, but the motion did not pass.

Minister Lord Hendy of Richmond Hill said the change moves the central payment service toward full cost recovery. He stated that the £4 fee is projected to recover an estimated 90 percent of costs from 2020-21 to 2030-31, with the remaining 10 percent covered by general taxation.

The minister noted that the previous £2 fee had not been adjusted since 2020, leaving taxpayers to cover the shortfall.

The regulations extend the charging period from March 2027 to March 2031. Officials said the extension was required because earlier projections that areas would meet air pollution targets by 2027 had proved too optimistic. Seven Clean Air Zones currently operate in England, covering Bath, Birmingham, Bradford, Bristol, Portsmouth, Sheffield, and Tyneside.

He argued that local authorities use Clean Air Zone surpluses for transport improvements rather than holding reserves. Earl Russell, speaking for the Liberal Democrats, supported the zones in principle but said the Secondary Legislation Scrutiny Committee had to intervene because the original explanatory memorandum lacked data on cost recovery and impacts on councils.

Lord Hendy said the government had written to local authorities stating its expectation that the higher fee would not be passed on to drivers. He identified four councils currently generating surpluses from zone operations.