Road user charging again? New principles for an old issue

In one of its last acts before the General Election, the House of Commons transport select committee announced that it would be holding a new inquiry in 2020, into road pricing. There are good reasons why the new committee is still likely to want to go ahead with this inquiry. The Treasury is reviewing how the transition to net zero carbon will be funded and where the costs will fall (LTT 22 Nov 19 and https://tinyurl.com/usv8ne8). Also, the combined effect of a freeze of tax on motor fuel, and an increasing share of electric or more fuel-efficient vehicles, is causing an increasing loss of tax revenue from driving, and at the same time continuing to make car use relatively cheaper than public transport, while transport policy needs to encourage a shift in the opposite direction. 

So, for these two reasons, it seems that the contribution road users make to transport services in particular, and tax revenue in general must have a higher profile in the coming year than was explicitly discussed in the election. All the ‘usual suspects’ in the transport policy debate will need to polish up their long-standing proposals and arguments on road pricing.

With this in mind, a small group of colleagues and I discussed why road pricing discussions now might need to be completely different from the long tradition of previous inquiries in which we have participated, in research projects for the DfT, local and regional bodies, research councils and international collaborations. The group consisted of Jillian Anable and Greg Marsden from the University of Leeds, Glenn Lyons and Graham Parkhurst from the University of the West of England, and myself – five professors with more experience on the question than we ever intended to acquire, all now inclined to say ‘but this time should be different’.

The reasons all stem from one proposition. It is clear that all road use charges affect demand and raise revenue, whatever their intention. But the traditional discussions focused on congestion management, or raising money, are simply not sufficient now. The issues are more complex, and wider, and more hangs on them. Therefore so must be the discussion on a new system. 

Here is my summary of our draft principles, as far as we have got, which we offer for discussion to the various different local and national agencies and individuals who will, we expect, shortly be called on to prepare their own submissions of evidence.  

1. Objectives: The objectives should now be much broader than the traditional transport focus on reducing congestion or Treasury focus on raising revenue. Road user charges are part of the overall system of transport prices and cannot be considered in isolation from them. Similarly, travel is part of a wider system of the functions of places for a full range of activities, and technologies that give good alternatives to geographical movement. There will be impacts (deliberately or not) on the primary environmental imperative of carbon reduction in the context of climate emergency, and also air quality, health, deep economic efficiency, sustainable planning of land-use and the location of homes, workplaces and activities, impacts on the efficiency and use of all modes of transport, accessibility and fairness. These impacts will be created by the system design and level of charges, and therefore it is essential to ensure that the impacts are consistent with wider policy objectives. 

2. ‘Plugging the fiscal gap’ remains an important consideration (and, we suggest, a legitimate one). This should be done in a way that charges reflect as closely as possible the full external costs imposed by road use on other road users, the economy, and society as a whole, and should be proportionate to the benefits received. People should know why they are being charged, and what the revenue will be spent on. Therefore, the allocation of revenue between the general purposes of social spending and specific improvements to transport services should be explicit and transparent.   

3. Fairness: System design should enable fairer opportunities for equitable access to activities, goods and services, and especially spending on improving alternative methods of transport and better planning. Where car use is to be made more expensive, the alternatives need to be better and cheaper. Otherwise it won’t be acceptable. Criteria of fairness need to include both different groups of motorists, and different groups of non-motorists, and users of all modes including walking, cycling and public transport. Analysis must include those who are least well served, to balance that commanded by those who have most options, are best represented, or most organised.

4. Charges will need to consider mileage driven, distinguished by vehicle type, energy source, size and weight, as well as location and time of day, so that wider, longer and heavier vehicles, SUVs for example, pay in proportion to their greater claims on road space, as well as emissions. However, the act of payment does not confer special rights to break regulations on speed, the allocation of road space among competing uses including stopping, loading, and parking, or use of priority sections of road. Prices need to reinforce and be supported by consistent regulation covering each of these aspects. The final selection of prices should be consistent with the objectives, understandable, deemed to be fair, and flexible.

5. Public acceptability of pricing evolves and changes. This is a dynamic problem, and it means that much more attention should be put on the sequence and timing of implementation, in order to build support. Ignoring issues of sequence and urgency has been a long-term weakness of modelling tools that focus on a notion of an equilibrium year decades in the future, without consideration of the greater efficiency of early carbon savings, or issues of intergenerational equity. When there is doubt about public support, it will generally be more fruitful to adopt experimental periods or trial systems, to give real-world experience on which opinion polls or voting can be based. 

6. Flexible technologies: There are no longer technological barriers to implementation. Relying on technologies that do not yet exist would be a distraction. The important thing is to be flexible to future technological change, rather than dependent on it, and ensure that collection, ownership, protection, legal liability and access to data is compatible with monitoring performance and public interest. 

A small group of colleagues and I discussed why road pricing discussions now might need to be completely different from the long tradition of previous inquiries in which we have participated.

Principles such as these would enable road user charging to be seen as a consistent part of a holistic transport and planning system, with impacts that contribute to goals on safety, carbon, efficient mobility and equity rather than undermining them. 

The details of a system of road user charges should arise naturally not from a forecast of growth in traffic volumes assuming a business-as-usual projection, but from a coherent overview of what traffic volumes will contribute to environmental and economic objectives, in specific locations and in total, and a broad improvement in the quality of life. 

Of course, even if the principles are accepted, it is not a trivial task to design the specifics in a way that is practical, sensible, and accepted. We shall be working on this, hopefully in collaboration with others who are interested and feel the general approach is right. All this is, above all, a first draft. 

Phil Goodwin is emeritus professor of transport policy at both the Centre for Transport and Society, University of the West of England, Bristol, and University College London. Email: philinelh@yahoo.com