Road pricing
The Queensway Tunnel in Liverpool was one of the UK's first road tolls.
23 January 2022 12:00 AM

Road pricing

23 January 2022

What is road pricing?

Road pricing is a system of charging drivers for their use of the roads, whereby frequent drivers pay 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 traffic congestion and is a fairer way of charging drivers than an indiscriminate road tax.

Road pricing

The Queensway Tunnel in Liverpool was one of the UK’s first road tolls.

Why is road pricing becoming more topical?

Despite historically attracting widespread opposition, the question of road pricing is gaining greater traction as a potential policy option.

The UK was the first country in the world to legislate on reaching net-zero carbon emissions by 2050. Achieving this target will necessarily entail a transition away from petrol and diesel vehicles and towards electrical transport. To incentivise the purchase of lower-emission cars, the government announced has made fully electric vehicles exempt from benefit-in-kind (BIK) tax and road tax.

The Institute for Fiscal Studies commented that the combination of electrification and higher fuel-efficiency would cost the government £28 billion in lost fuel duty. The think tank envisages a long-term requirement for road charges on the grounds that, even if electric cars reduce pollution rates, the issue of congestion will likely worsen on account of sustained population growth.

To compensate for the perceived tax shortfall from petrol duty and road tax as a result of electric cars, the government is considering a number of road charge options, including the introduction of a national road-pricing scheme. Without road pricing, in February 2022, the Commons transport select committee suggesed the blackhole in its public finances would soon equate to £35 billion.

The Case for road pricing

Proponents of road pricing frame it as a fairer alternative to a flat tax. Existing and proposed road charging schemes reflect actual road usage, thus dis-incentivising superfluous travel and limiting congestion in particular areas. They also suggest that those who use the roads the most, would in practice pay the most for doing so.

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