Road Pricing

What is road pricing

Road pricing is a system of charging drivers to reflect car usage, with frequent drivers paying more than infrequent drivers. Normally, schemes are skewed to encourage drivers to use less congested routes or drive at less busy times. In this way supporters of road pricing claim it can reduce congestion and is a fairer way of charging drivers than an indiscriminate road tax.

Background

Congestion is a growing problem across the UK and on current trends is set to get 25 per cent worse over the next decade. This is despite a planned £140 billion investment over the ten years to 2015.

Sir Rod Eddington reported to the previous Labour government that road pricing could help tackle congestion and in 2005 launched a 'national debate' on road pricing, in order that it could be considered as one possible remedy.

A government feasibility study in 2004 set recommendations for a sliding scale of charges. Drivers would pay a maximum of £1.34 a mile for the most congested roads, falling to two pence a mile. The government insisted these figures were highly speculative until further research was completed.

The Department for Transport worked with local authorities across England on road pricing pilot schemes, the intention being to use evidence from these as the basis of any national decision.

The government said it would not adopt a road pricing scheme unless the evidence warranted it and the public could be persuaded of its value.

Initially more than £14 million was awarded to ten areas for initial pilot schemes; Bristol, Cambridge, Durham, Manchester, Shrewsbury, Tyne and Wear and the West Midlands. In 2006 further support was announced for Reading, Norwich and Nottingham, Leicester and Derby. The projects were set to begin in late 2007 and last for two years.

A survey published by the Department for Transport on 'Public attitudes towards road congestion', which was carried out between November 2009 and February 2010, found that over half of adults agreed that the current system of paying for road use should change so that the amount people paid was based on how often, when and where they used the roads. However, under a quarter thought that people driving on busy roads should pay more and a similar proportion said that people driving at busy times should pay more.

The present Coalition government has pledged not to introduce road pricing for the duration of this Parliament.

Controversies

Road pricing has proved to be hugely controversial. Some 1.7 million people signed a Downing Street petition in 2007 protesting against road pricing, despite no firm proposals being put forward.

The petition noted: "The idea of tracking every vehicle at all times is sinister and wrong. Road pricing is already here with the high level of taxation on fuel. The more you travel - the more tax you pay. It will be an unfair tax on those who live apart from families and poorer people who will not be able to afford the high monthly costs."

The government maintained that road charging would be purely designed to tackle congestion, not act as a 'stealth tax' to raise revenue or track drivers via in-car technology. Nevertheless, the public remained sceptical on both these counts.

Supporters claimed road pricing could potentially be a fairer alternative to car tax because it reflected actual road usage. However, critics claimed people in rural areas or other people who have trouble accessing public transport have no choice but to drive. In turn supporters claimed the roads most commonly used by these groups would be subject to reduced rates.

The government further insisted that any road pricing scheme would be accompanied by improved public transport to reduce congestion.

Concerns were also raised about the potential for a 'big brother' state and invasion of privacy. Road pricing would require drivers to install a tracking device in their car, prompting claims of an invasion of privacy. The government maintained it would not be used to track drivers, nor would data from tracking boxes be used to prosecute speeding drivers.

Some motoring groups questioned why the Department for Transport could not build new roads or widen existing routes, as happens on sections of the M1. The department maintained increasing the road network's capacity was not enough, and instead motorists needed incentives to drive less. It also pointed out that road building was highly expensive, with one mile of motorway costing £30 million.

In July 2010 a report by RAC Foundation director Professor Stephen Glaister warned that a radical change in the way roads in England are managed and funded was vital if traffic gridlock was to be avoided in future years. The report, 'Governing and Paying for England's Roads', concluded that some form of 'pay as you go' system was "inevitable".

The report coincided with an Ipsos MORI survey carried out for the RAC Foundation which found that the majority of those asked were opposed to a 'pay as you go' scheme. However, when it was explained that a charging system would be accompanied by a range of benefits, such as the abolition of VED and a cut in fuel duty, opposition to the scheme fell away markedly.

A further report by the Institute for Fiscal Studies, also funded by the RAC Foundation, published in May 2012, said the economic rationale for road pricing was "compelling" and recommended a move to a widespread system of road pricing.  The IFS also cautioned against signing long-term leases to let private firms manage key roads, saying the Government should consider carefully whether this would compromise the ability to implement national road pricing in the future.

Charges paid by HGV hauliers for using the roads is another area of controversy. UK hauliers have to pay to use many roads abroad, but foreign hauliers do not have to pay to use the UK road network.

The Government is now seeking to remedy this imbalance through the HGV Road User Levy Bill currently progressing through Parliament.  The bill will introduce charges for all HGVs that weigh 12 tonnes or over for using any category of public road in the UK.

There will be associated reductions in vehicle excise duty for UK-registered HGVs which should mean that most UK-based hauliers will pay no more than at present.
 

Statistics

There is little support for charging for road use; just one in five people thinks people who drive on busy roads (19%) or at the busiest times (18%) should pay more.
But more than half (57%) agree that those who drive cars that are better for the environment should pay less to use the roads than others.

NatCen social research; attitudes and behaviour towards roads and road travel - 2012
 

Quotes

"We will work towards the introduction of a new system of HGV road user charging to ensure a fairer arrangement for UK hauliers."

The Coalition: Our programme for government.


"We recommend a move to a widespread system of road pricing. The revenues raised could be used to reduce other motoring taxes. Such a move would generate substantial economic efficiency gains from reduced congestion, reduce the tax levied on the majority of miles driven, leave many (particularly rural) motorists better off, and provide a stable long-term footing for motoring taxes without necessarily raising net additional revenue from drivers."

IFS report for the RAC Foundation - May 2012