Saturday, March 03, 2007

The beginning, not the end of the road...

It recently occurred to LibertyCat and I that we had completely failed to blog about the much discussed e-petition on road pricing and Tony Blair's subsequent letter to the signatories. I started blogging about the Social Market Foundation's February paper on road pricing [click to download], and Mr Ladyman's speech at that event. Then it occurred to me... why road pricing?

Vehicle Excise Duty and petrol duty already take into account the emissions of the vehicle and the distance travelled. This approach has problems - petrol tax is unfair to the rural poor and VED discriminates against people who own high emissions vehicles and barely use them. However, the importance of these groups is probably underestimated. Only 20% of the UK population live in rural areas and less than 5% in very sparsely populated rural areas. In addition, people who own and rarely use high emissions cars will pay less in fuel tax than those who use them for their daily commute.

So why road pricing? The SMF report justifies this as follows:

Traditionally taxation mechanisms, such as the fuel tax and the vehicle excise duty (VED), have been the main levers used to constrain growth in traffic levels and emissions. Yet these have had a limited impact. Despite a rise in the real price of
petrol since 1990, road traffic increased by 14% between 1990 and 2000 and is predicted to rise another 25% by 2010. In addition, road transport’s share of total UK carbon emissions is set to rise by just under a third by 2010...

...The limited impact of the fuel tax and VED in reducing traffic and emissions may in part be due to the fact that, despite the real rise in petrol prices, the costs of motoring have fallen relative to the costs of public transport and to the level of average earnings...

...As car travel has become relatively cheap compared to both earnings and alternative modes of transport, more and more people have chosen to travel by car.

Although fuel duty is a form of distance-based road pricing, its primary effect has actually been to encourage fuel efficiency rather than reduce car use...

... There is little political appetite for further increases in fuel duty - which has not risen with inflation since the fuel duty escalator was abandoned in the 1999 Pre-Budget Report. This is unsurprising given public attitudes...

..Since the necessary increases in fuel duty to reduce congestion are unlikely, road pricing is the only feasible alternative mechanism to help motorists face the full cost of their road journeys.

To summarise this long passage "The government are too scared of men in lorries to put up fuel tax enough to change behaviour. So they're going to go for a really complicated, expensive computer system [an approach that has been so much of a success in the past]. This may involve funky futuristic black boxes and satellites, or they may just try scaling up the London congestion charging system from around 42 sq km (double the previous area of 21 sq km ) right across the 244820 sq km of the United Kingdom. Bear in mind that the London system is one of the largest and most complicated congestion charging systems in the world".

This doesn't seem a particularly strong argument for road pricing.

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  • At 3:13 pm , Blogger James said...

    There are I think a large number of good arguments for road pricing, starting with the fact that public subsidy for road travel has long disguised the true cost to the motorist. To illustrate this you only have to consider what would have happened if the construction of the motorway network (like the railways or the tube) had been left to private companies: They would have certainly charged pretty high toll rates to motorists who wished to use them - thus ensuring that commercial or essential journeys made up the greater proportion of a lesser flow of traffic. Making roads 'free at point of access' has lead to very inefficient usage.

  • At 4:03 pm , Blogger Femme de Resistance said...

    There are several good arguments for road pricing.

    However, many of them also apply to petrol tax. For example, the true cost of road-building could be met as part of an increased petrol tax (after all, most people using petrol are also using it on-road).

    My concern is that road pricing is a very technologically complex and possibly expensive solution to something that could be solved with petrol tax...

    And I'm not sure about the political viability reasons either - a poorly implemented road pricing policy could be as unpopular as fuel duty.

  • At 1:24 pm , Blogger Matt said...

    I have posted an interview of Tom Steinberg by The Commons Public Administration Committee about the the road pricing petition here:

    Sorry for not trackbacking - blogger doesn't like my Google Account.

    Matt Wardman


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