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The Government offered Manchester £1.5 billion worth of funding for improved public transport today it if agrees to become the first provincial city to follow London in introducing a congestion charge.
Ruth Kelly, the Transport Secretary, wielded the carrot as she delivered a statement to Parliament giving the green light to a scheme under which commuters entering and leaving the city at rush hour could pay up to £5 a day.
Unlike the London scheme, shoppers or other road users entering central Manchester outside peak hours would not have to pay.
The charge will not be introduced until 2013 and will be accompanied by £2.8 billion investment in public transport services including up to 22 miles of extensions to the Metrolink tram, extra buses and 120 American-style yellow school buses.

"This is about creating a world class transport system for a world class city. Thriving cities are those where people have access to education and jobs, and where businesses can flourish," Ms Kelly said.
"Manchester’s economic renaissance is a major British success story. It is one of the fastest growing economies in the UK, but congestion has become an increasing brake on its future prosperity, with the potential to cost the city as many as one in seven of future jobs."
But her Conservative shadow, Teresa Villiers, accused Ms Kelly of "bullying" local people into accepting the scheme by threatening to withhold investment funds if it is not accepted.
There remains significant public opposition to the scheme, which could cost many motorists in Greater Manchester more than £1,000 a year, and Manchester Tories say that the most likely victim of any backlash is likely to be Ms Kelly herself, who has a slim majority of just over 2,000 in her Bolton West constituency.
Graham Stringer, the Labour MP for Blackley, predicted just such a backlash from disgruntled motorists in marginal seats.
He told BBC1’s The Politics Show: "To have a Labour Government, you have to have an alliance not only of core Labour voters but of people who before 1997 in constituencies like Bury North and Bolton West didn’t vote Labour.
"The congestion tax is another pressure on that coalition. It is another wedge that will break that coalition up and make it much more difficult to deliver a Labour Government."
Susan Williams, the Conservative leader of Trafford Council, predicted that the scheme would be disastrous for Labour. "To bring in the congestion charge at a time when the roads of Greater Manchester and the country have been blockaded by truck drivers and motorcyclists protesting about taxes on the motorist seems to be an act of political suicide," said Cllr Williams, who is hoping to win the Bolton West seat at the next election.
But Sir Richard Leese, the leader of Manchester City Council, said: "My belief is that if the politicians of Greater Manchester have the strength and confidence to do what is very clearly in the long-term interests of this conurbation and all its people, we won’t be punished at the ballot box, we will be rewarded for that strength of purpose."
Under the Manchester congestion charge plan, drivers will have to install electronic tags in their cars that will be detected by roadside beacons positioned in two rings around the city.
Charges will be deducted automatically from prepaid accounts. The Manchester scheme differs from the London congestion charge by only charging drivers travelling with the main flow of traffic into the city between 7am and 9.30am and those travelling out between 4pm and 6.30pm. London’s £8 charge applies to any vehicle that moves inside the zone between 7am and 6pm, regardless of the direction of travel.
The Greater Manchester Passenger Transport Authority (GMPTA) claims that its scheme will be much fairer because it will target roads only when they are busiest. People driving out of Manchester in the morning or into the city after 9.30am will pay nothing.
The scheme needs to be endorsed by at least seven of the ten councils in Greater Manchester for it to go ahead.
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Extra funding improve public transport? if it was a viable option the bus companies should be paying for these improvements not bleeding the motorist (again)?
We dont want it; will anybody listen? It'll get pushed through anyway and the data will be manipulated to justify it - New Labour again.
John Halloran, Manchester, United Kingdom
Labour have spent many years harping on about discrimination.
Discrimination is the prejudicial treatment of a person or a group of people based on certain characteristics.
So why is it ok to deny the right of the less well off in society to use the roads they have already paid through the nose for
Ron, Manchester, DisUnited Kingdom
Once the Manchester Mandarins get addicted to this cash-cow what exactly will be their incentive to reduce their coffers by improving transport? Think Speed Cameras. Think Traffic Wardens.
Does anybody actually believe that these idiots will spend the money wisely? Vote the clowns out now
Kevin, Heaton Chapel,
This government keeps saying they will people what they want. We want a vote on this matter
bob, Birmingham, uk
After the congestion charge comes into force just how long it will take until this charge is raised and becomes an all day tariff. I am guessing not too long.
They say they are investing in public transport too, but if this happens the cost of using public transport will increase also!
David, m/c,
100 Billion to save MPs in Newcastle, 2.7 Billion to save Crewe and nantwich, but only 250 million to save Ruth Kellys seat in Manchester. It's either getting cheaper, or Labour have fianlly worked out that they can't save themselves.
David Leslie, Perth, Scotland
These so called congestion charge schemes are all for money raising and have nothing to do with congestion. If they realy wanted to reduce congestion pay people to drive out of the charge zone. The Manchester scheme is talking of charging you to go in and to go out of the zone. This just proves it.
Mike Trowsdale, Chessington,
Tony Blair knew the risk of this war in Iraq, he knew it would mess up the economy. While Iraq was not producing due to the war,forced prices up, & there is nothing that ever comes down. The Arab world is taking revenge on the west. Bush family did the same during the 2nd world war & got RICH.
daphne kenward, cambridge, uk
Smell a rat? You can have yet another tax and have to agree to that before you get the carrot which may appear in 5 years' time when of course this government wil be history. Absolutely pathetic. Why not invest NOW in the public transport infrastructure then see if a tax is required.
JohnM, Perth, Scotland, UK
other than congestion charge what else did they think of to cut down traffic around the rush hour.they have just seen a big pot of money from the goverment and thats it they have to have it. they will then pat each other on the back and tell us how good it is working. how often will the cost go up.
mark, wigan,
The cost of implementing the scheme will rise significantly as it always does with publicly driven grand projects and income will be less than expected.
And we, the people, will have to pick up the bill when it all goes pear-shaped.
doug, Manchester,
Moan, Moan, Moan. Forget the politics for a minute and think for yourselves. It's about freedom of choice - get the tram, or the better trains, or the better buses and enjoy your hassle & CO2 free journey into work or sit in a queue spewing out CO2. Oh, and there is no charge after 9.30am. Think on!
john, Manchester, UK
How is Manchester a world class city?
What other world class city has this C Charge other than London?
Jose, Galicia, Spain
More money to keep those gold-plated pensions of the council staff nice and high, and the freebies assured. Absolutely nothing in it for Joe Public though, except pay more out, get nothing back.
Paul Downes, Milton Keynes, Bucks, UK
"...scheme which would make Manchester the first provincial city to follow London in introducing a congestion charge...". Technically accurate as it will be the first city to follow London. Of course Durham was the first "provincial city" to introduce a C-charge in 2002 with London following it.
Jon, London,
This will mostly be a gigantic payday for contractors and consultants (I'd love to know how many contribute to Labour). What we need is existing services to be cheaper, more reliable, cleaner, and safer for the travelling public. Why invest in services to be run by the same incompetents as now?
Jamie, Manchester, UK
My belief is that if the politicians of Greater Manchester have the strength and confidence to do what is very clearly in the long-term interests of this conurbation and all its people, we wont be punished at the ballot box, we will be rewarded for that strength of purpose.
ER............ NO
Simon, newbury, uk
Why not give the people of Manchester a chance to say if they want the congestion charge... I think it is called democracy.
Andrew brown, derby, UK
How dare they charge motorists even more money when they are already suffering higher fuel bills?
Rowan, Oxford,
Leese sounds like a military dictator from China.
People of Manchester are being taxed for living and working in there own City but people who want to shop are welcome.He thinks votes will not be lost sums up how far away from reality he is.
Watch the bus lanes go once he can tax more cars!!!!
Philip Hare, Stockport, UK
The area within the M60 is a huge conurbation with both football stadiums, Tafford Park Industrial area, the university, golf courses and many other suburban amenities and you can bet your life that very few of the proposed inprovements to public transport will occur.
John Tomlinson, Brentwood (ex-Manchester), UK
They might make more money if they charged people who wanted to LEAVE Manchester.
Frank Upton, Solihull,
Why wait till 2013? Public transport users have endured high fares and often mediocre service (partly due to traffic congestion) for years - everyone forgets them in these debates. And Laura forgets that the proceeds in London have been used to make improvements for the 6m-plus a day bus users.
Barry, Wallington, UK
As I understand it, the investment in metrolink (extensions inc. Worsley & Bolton) was withdrawn 3 years ago without a definitive reason.
We know now!
Steve, Bury, UK
Democracy has died in the UK.
This appalling socialist government has bought Stazi style control to our society.
We are monitored,overcharged,overruled and have lost our power to the unelected in Brussels.
The former eastern bloc totalitarians would be proud of new labour.
James, London, UK
All that will happen is manchest city center will become a no go zone every one will move out, but not before they vote for conservative or even BMP to punish labour, O what wounders will they think of next?
Mr W Jones, Liverpool, England
Improving public transport is one thing but taxing just the motorist to pay for it is despicable descrimination! To be fair all residents and all people working in the area (regarless as to how they get to work) should pay for the improved public transport, stop ripping off the motorist!
Jonathan, Preston, UK
Great, another nail in Labour's coffin! Anyway why should people that go to work be penalised?
marion marchant, Reigate,
What about all the small businesses based in and around Manchester? I've spoken to one lady in particular who is based in Chorlton (outside the zone) and also has a shop insude the congestion zone. Smaller firms will struggle to compete as they make deliveries, etc across town.
Jane Bennett, Forum of Private Business, Manchester, UK
The simple point is we DO NOT WANT this charge in Manchester.
It will kill the city centre!
Steve, Manchester, UK
I drive into Manchester (just inside the M60) about 6 times a year, and spend money there. Now I'm going to have to pay for the installation of an electronic tag in my car for a very occasional journey. Guess how many times I'll make the trip in future?
Ecgbert, Sheffield,
How do people who don't live in Manchester; so don't have an electronic tag, get charged? Will drivers without tags be unable to enter the town?
Phil, Warrington, England
The majority of people don't work in the city centre - they work within the M60. Crossing the city on public transport mostly isn't viable.
People won't have to pay the charge - as businesses will relocate.
Great for the city - watch all those new appartments sit empty.
W Smith, Manchester,
Disaster. The congestion charge in London is a complete and utter failure resulting in negligible increase in speed, no reduction in congestion jams and an increase in traffic in the surrounding areas.
But it's earned lots and lots of money, and that's what this is all about.
Legalised theft.
Laura Roberts, London, United Kingdom