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For whom the road tolls

By / 6 months ago / Comment / No Comments

The subject of road user pricing has been back in the headlines following a new report from Centre for London. Natalie Middleton wonders if such a system could work on a UK-wide basis.

motorway uk

This year marks the 55th anniversary of the so-called Smeed Report that recommended the Conservative government at the time introduce nationwide road pricing to cut congestion

Reports outlining how road user pricing could tackle issues in the UK are nothing new – this year marks the 55th anniversary of the so-called Smeed Report that recommended the Conservative government at the time introduce nationwide road pricing to cut congestion.

But they do seem to be coming with increasing alacrity as concerns mount not only over rising traffic but also on how to fill the gap from declining fuel duty and vehicle excise duty as drivers switch to ultra-low emission or fully electric cars; just last month, at the ICFM conference, Harvey Perkins, director of fleet consultancy firm HRUX, warned that we will see some form of UK-wide road charging if revenues do decline.

Recent solutions mooted include from transport planner Gergely Raccuja who won the 2017 Wolfson Economics Prize for his idea of a pay-per-mile road tax that would be collected through the insurance industry and based on rates dependent on the vehicle’s weight and its tailpipe emissions. The tax would replace VED and fuel duty and the money raised would be used to boost investment in roads and improve air quality. Meanwhile AA president Edmund King and his wife, the economist Deirdre King, were shortlisted for the prize with their idea of Road Miles, where drivers benefit from at least 3,000 free Road Miles each year with a small charge thereafter of less than 1p per mile and fuel duty discounts are deducted. The scheme would see fuel duty drop 20% within five years to 47p/litre and drivers would be compensated for excessive roadwork delays and closures while the Government would get £2bn extra per year.

The latest report comes from think-tank Centre for London, which has called for the capital to switch to a single road user charging system, which would charge drivers on a per-mile basis with charges varying by vehicle emissions, local levels of congestion and pollution and availability of public transport alternatives. It would also be integrated with London’s wider transport system via a new app and digital platform that would open up mobility options.

Such schemes, which tend to be supported by both economist and environmentalists, are showing increasing sophistication in resolving issues with previously mooted solutions, not least by eliminating most, if not all, other charges on drivers and by helping to ensure a balanced approach that makes drivers think about their alternatives, not just switch to driving on cheaper roads. And they could also eliminate concerns over other per-mile schemes and their impact on where businesses locate and where people live as they look to avoid higher-priced roads.

Rapid advances in technology mean that supporting such schemes no longer need be an issue either. In 2004 the Labour Government’s work on A Feasibility Study of Road Pricing in the UK found that A Feasibility Study of Road Pricing in the UK found that a national road pricing scheme would probably become technologically feasible in 10 years’ time from the report date.

But the main issue, as always, lies with the public. Despite the potential for less congested roads, road user pricing remains a hot potato explored and dropped by a number of governments, due to negative reactions from drivers and concerns over invasions over civil liberties.

Distance based road user charging – the future for UK roads?

Anthony Alicastro, chief executive officer of emovis – the UK’s largest operator of toll roads, was part of the discussion panel at the launch of the Centre for London report. He outlines the considerations.

Distance based road user charging – a national ‘pay as you drive’ system for the UK. Will it happen? It’s politically challenging but there is a major financial driver – as electric vehicles become the norm in ten years’ time that is a lot of lost fuel duty. HM Treasury will need to recoup its revenue from somewhere and the roads will still need maintaining. Opinion in London is gathering momentum in favour of this as a simpler, greener and fairer alternative than six separate charging schemes around the capital, but how would distance based charging work at a national level in the UK?

Here’s five guiding principles to get you thinking.

  • A replacement for road tax and fuel duty – a ‘pay as you drive’ scheme will be more progressive than a flat tax and the replacement of fuel duty would be critical to a fair system
  • Simplicity and interoperability – at the very least different schemes will need to talk to each other (like E-Z Pass in the eastern USA) but one simple scheme would be best for customers, particularly for fleet drivers
  • Transparency – an app will show you a fixed cost and journey time as well as public transport options and time savings
  • Repayments for delays – a major change from what we have in the UK today but we do it with trains and planes – why not automobiles.
  • A clear link to infrastructure investment – where does the money go? Government will need to be very transparent about its investment plans and priorities for the money raised.

There are lots of different implementation options. Whether the UK has a series of city-based schemes or one national network that includes motorways is for policymakers to decide. But we could have a road user charging system that is simple to use, fair for motorists, enables healthy living and has real green credentials.

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.