Road Pricing

For reasons I needn't go into there is much attention being paid, as I write, to a certain parliamentary petition which has attracted several million signatures.

I have some experience of petitions, because just over ten years ago, as the Roads Director in the Department for Transport, I had the task of grappling with what was then the largest petition most of us could remember and had as its target, yes, road pricing.

Transport Times readers will all know that the moves to replace our fossil-fuelled motoring world with a cleaner, greener solution come with an inexorable impact on fuel duty income to the Treasury. That's something in the region of £26 billion at risk. Something is going to have to be done.

However, anyone thinking about advocating road pricing now – and I have noticed some stirring in the undergrowth – would be well advised to have a few things in their minds as learning points from that petition, which was lodged on the Number 10 website.

When we use terms such a 'road pricing' loosely we run the risk of conflating a number of things, and that can lead to a confused public debate that can quickly run away on a tide of suspicion and misconceptions. Let me explain by looking at the issue through three lenses.

Lens number one – the accountant's view.

Your accountant is the person who faces you with the question of whether you are solvent or not. Has your income exceeded your expenditure? Hence, the accountant's version of 'road pricing' is a way of raising money for the Exchequer which might in turn be used to fund any number of public services – health, education and so on.

One way of making the books balance would be to take the fact that as of today the more driving you do, the more fuel you burn, and the more fuel duty you pay, and simply drop the fuel element out of the equation and instead invite us all to pay by reference to the amount of driving that we do. This is the pay-as-you-go model (probably more accurately thought of as a pay-for-how-far-you-went).

I think that this will turn out to be quite an attractive option for the Treasury. It is the core idea in the winning Wolfson Prize entry.

Lens number two – the economist's view.

Economists yearn to use a pricing mechanism as a way of rationing road space and managing traffic. The net income to the Treasury, for the Economist, is incidental to the main objective, which is to arrive at a more efficient and rational consumption by motorists of a capacity-limited product – the road network. Think of the London congestion charge. The objective is to make the roads run better, the fact that it raises money is a bonus for cash-strapped Transport for London.

Rather than being concerned purely with the number of miles that you drive, this approach requires somebody, somewhere to know where you drove and when you drove there (which is why I think of it as tadpole pricing: TDP – Time-Distance-Place). And that ups the complexity and brings in a whole raft of issues, in particular privacy.

Lens number three – the consumer's view.

We consumers of road capacity observe from time to time that we are paying more in motoring-related taxes than gets spent on roads. Wouldn't it make more sense for the roads to be provided on a similar basis to other utilities, like gas or water, where the amount we pay relates to the cost of provision, established independently by a regulator? Our potholed roads clearly need more investment, so rather than siphoning off what we pay to support other public services lets have a genuine 'price' that would go straight into the operation, maintenance and enhancement of the network.

It might be possible to design a really clever system that ticks all three boxes. Maybe. But explaining it becomes almost as complicated as doing it, because I guarantee that whoever is promoting it will be asked, again and again "is this about raising money or is it about tackling congestion?"

That was the first lesson.

Lesson two, when faced with the option of using a price mechanism to achieve a more efficient – more rational – use of road space, hundreds of thousands of people said that they'd rather not, thanks very much.

They said some other things too – that they didn't want the Big Brother state tracking all their trips, and they certainly didn't want to have automatic enforcement of every speed limit on every road at every time of day.

We all need to muse on this.

Because while we can all agree that congestion is a bad thing, and we'd all rather not experience it, it is very far from clear that we all think that it is so bad that the road pricing – TDP - cure is better than the traffic-queue disease.

Look, instead, at the approach that London's Mayor, Sadiq Khan is taking to explain his Ultra-Low Emission Zone – a poster campaign that bangs home the message that it is your children's health at stake. Are we going to argue with that?


By comparison being stuck in traffic feels more like an irritant than a crisis. And we aren't generally inclined to vote for radical changes to address irritants. Particularly if we suspect that the medicine will be unpalatable and the irritant might well persist.

Fine-tuning a TDP road pricing regime is a whole lot easier in an economic textbook than it turns out to be in the complex, messy real world of thirty-eight million drivers taking decisions about the trips they'll make in thirty-two million cars.

Perhaps if the TDP 'medicine' came with the 'sugar' of a promise to hypothecate more money for road spending it would be easier to swallow. 'Easier', maybe, but 'easy', no.

Despite the Government's commitment to allocate vehicle excise duty ("road tax") to road investment the fact is that we do not pay a 'price' for consuming the product that is our national road network, and switching to such an approach would be a major upheaval. Lesson three, do not underestimate the magnitude of the approach you are advocating, and muse on the parallels with other massive transformation projects such as universal credit.

Clever folk beavering away in the Treasury will be turning their minds to the inevitable collapse of fuel duty income over the next decade.

If we transport professionals are to help them explore and think through the practical options that will fly with the motoring public we need to be very clear in our minds and in our use of terminology what exactly we are describing. We have to get the pain:gain, cost:benefit judgement right. And we've got to square up to the practicalities of real-world implementation.