Most of the people refer to VED as “road tax”, it’s usually followed by some sort of condescending comment about how non-drivers should “get off the roads”, and often used as an excuse for engaging in deliberate acts of violence. I’ve personally had people explain to me how being hospitalised for a week, and being given a permanent spinal injury by driver deliberately hitting me while cycling to work, is an acceptable cost to society, and that because I don’t pay “road tax” means I have no right to demand safer cycling conditions on the roads. So I make a point of not calling it “road tax”, because it’s a misleading name. A better name would be a “car pollution tax”, or just a “pollution tax”.

With regards to VED collected in London. Only about £0.5 billion is collected annually from London. Fuel duty does seem to be broken down by region, so it’s hard know how much is collected in London. But across the UK £24 billion of fuel duty is collected annually, so it could be possible to fund a significant chunk of London’s transit by increasing fuel duty by 30-40% across the entire UK. But such an increase would likely also cause riots or similar. Additionally if you were to increase fuel duty like this, you would presumably need to provide free transit across the entire of the UK, which would require a significantly higher fuel duty increase. Of course that tax increase plus free transit, would result in a huge modal shift away from cars, and thus drive down the collected revenue.

In all, there doesn’t seem to be a viable way to provide free transit to all. At least not without significant tax increases across the board, and maybe that’s a viable approach. But there certainly isn’t an easy and obvious no-brainer way to get rid of the “bureaucracy” and use the savings for free transit, as was originally suggested.