Road pricing faces political block

When in 2003 the mayor of London, Ken Livingstone successfully introduced a £5 congestion charge for vehicles entering the centre of the city during the day, it was expected that many other cities, or indeed countries, would follow suit. Indeed, transport planners around the world flocked to London to scrutinise the scheme and analyse the results which, on the whole, were largely positive. In the immediate aftermath, trip times decreased by 14 per cent and congestion by 25 per cent and there were widespread expectations that dozens of cities around the world would follow the example of the UK’s capital. 

 London appeared to be the forerunner for schemes across the world. While there are numerous toll roads and bridges around the world, until then only Singapore and Norway had introduced congestion charge schemes in cities and both were on a far smaller scale than London.

 Congestion charges and road pricing more generally were seen as the future for taxing motoring. More carefully targeted than fuel tax, and a way of bringing in large sums for transport infrastructure, they were promoted as a green tax. Encouraged by the low level of resistance to the London scheme and its success in improving the environment of central London, the Labour government then in power started seriously examining the notion of implementing a scheme of road pricing across the country. It received backing from an independent review of the state of the country’s infrastructure by Sir Rod Eddington, a former head of British Airways, whose 2006 report advocated a national road charging scheme which he argued was ‘an economic no-brainer’ that would raise vast sums of capital – he argued it could bring in £28bn by 2025 – to improve the country’s transport system. Livingstone, emboldened by the success of the scheme, extended it westwards to encompass a more residential but nevertheless congested are of the city.

 It was not just Britain where road pricing was being presented as a solution to both ever rising congestion on the roads and to holes in transportation budgets. The supply of road space is strictly limited and to offer it free makes no sense to economists who point out that the resulting congestion is the result of this Soviet type economics. Stockholm picked up the mantle and introduced a scheme whereby people were charged a variable rate for entering the city centre. In a politically astute move, the local authority introduced the scheme for a seven month pilot and then closed it down to allow for a referendum on the concept and the electorate supported reinstating it. In Germany a lorry road user charging scheme was introduced on motorways in 2005, with most vehicles paying automatically using windscreen devices that were monitored from overhead gantries and in the neighbouring Czech republic a similar scheme begun two years later. .

 However, it is the Dutch who have the biggest ambitions in this respect. In 2007, the Dutch government announced a plan to roll out a nationwide road user fee system for lorries by 2012 and other road users six years later. This was underpinned by four policy goals, notably to create a fairer system of taxation for motorists, improve both the environment and road safety, and reduce congestion to benefit the economy. Bravely, the government even suggested likely levels of tariff which would be around  7 US cents per mile for cars at the introduction of the scheme, rising to almost ten times that level over the next decade.

 Now, however, a backlash against road charging is sweeping across Europe. Attempts to introduce a congestion charge scheme in Manchester were roundly rejected in a referendum in 2008 and this followed a similar defeat in Edinburgh three years previously. Moreover, Boris Johnson was elected mayor of London in 2008 on the promise that he would abolish the western zone of the congestion charge, an election pledge due to be fulfilled next year, although there are doubts within his own administration on the wisdom of the move because of the loss of revenue at time of cash shortage.

 Nationally, too, the politicians have backed away from even suggesting schemes. Labour’s transport secretary in the mid 2000s, Alistair Darling, was enthusiastic, and suggested that a countrywide scheme could be in place within a decade. However, the series of defeats in referendums, together with a massive petition on the No 10 website which attracted 1.7m signatories – albeit on the basis that drivers would have to pay £1 34 per mile, a calculation that had no basis in fact – ensured the idea was quietly kicked into touch. Labour having already gone cold on the issue, the Tory-led coalition elected in May this year ruled that even research into the subject would be ruled out although it is considering introducing a lorry road user scheme designed to help British truck owners against competition from foreign vehicles who are seen as getting an advantage by bringing in a full tank load of cheaper Continental diesel while not being subject to the high UK vehicle taxes. 

 Meanwhile, in the Netherlands, too, the scheme has fallen foul of politics. The plan has been put on hold because of the political stalemate following this summer’s election which is likely to see right-wingers, opposed to the idea, lead the new coalition.

 Opponents of congestion charging point out that London congestion figures have returned to 2003 levels. However, there are external reasons for this: the liberated road space has been taken up by bus and cycle lanes, and there has been a proliferation of major road works associated with replacing the capital’s Victorian sewers. Opposition, too, centres on cost. The London scheme is indeed expensive to operate as around half the gross revenue of £280m per year is spent on running the scheme.  

 So what has gone wrong? There is an inherent logic to road pricing, revenue neutral or not. Demand for a good offered free will always be artificially high and road pricing is an obvious solution, accepted almost universally by academics in the field. The problem is that road pricing is seen as politically contentious and the lobby groups for motorists have been vociferous in their opposition. Even supposedly revenue neutral schemes cannot win over mistrustful voters. 

 To be successful and increase the likelihood of acceptance, road pricing or congestion schemes must have clear objectives and the money must not be perceived as an additional burden on motorists but, rather, used for road or other transportation projects. That makes them far more acceptable to the wider public but even there is no guarantee of success. Both the Manchester and Edinburgh on congestion charging schemes were held on the basis that all the money would be spent on transport projects but the plans were defeated by large margins. The local media, in both instances, played a key role in arousing opposition and it may be that the Stockholm method of imposing a scheme first, and then putting it to the vote, is the only way forward. Professor David Begg, a transport expert who helped promote the Edinburgh scheme, certainly thinks so. He says that even promising transport improvements is not sufficient to persuade electorates to support road pricing: ‘The trouble is that there are far more motorists than public transport users. Possibly, just possibly, you could link a national scheme in with reducing income tax, or a local scheme with cutting council tax, but essentially no one votes willingly to increase their taxes.’ Its bad enough in a time of plenty, but even worse during a recession or a weak recovery.

 Governments, therefore, have to act first and seek approval later, but that is something they are reluctant to do. Stephen Glaister, the chairman of the RAC Foundation, argues that the opposition to even discussing the scheme by the British transport secretary Philip Hammond is short-sighted and suggests that the Treasury is likely to press for an analysis of the benefits of the scheme: ‘ The Treasury is bound to see this as a wasted opportunity and may overall the Department for Transport. The road network represents a fantastic resource and offers the potential for billions of pounds of revenue for investment. Even if the Transport Secretary remains opposed, the Treasury is bound to be pushing for the idea as it is a potential source of so much revenue.’ He sees the introduction of a scheme in the longer term as inevitable.

 The situation in Britain, which thanks to former mayor Livingstone, had been in the vanguard of road pricing, encapsulates the dilemma for transport planners and politicians sympathetic to the idea of road pricing across Europe. Experience shows the concept works, and money is desperately needed for transport infrastructure investment. The electorate, though, often galvanised by populist media, is reluctant to pay for it and sees road pricing as an attack on their freedom to drive. Populist politicians like Boris Johnson can easily jump on an anti-charging bandwagon. However, as the austerity budgets bite throughout Europe, and the transport situation deteriorates, the cannier political supporters of the notion may be able to present it in such a way as to win over public support or at least allay the most vocal opposition. But it will be a tough ask.

  • Beanie

    Perhaps a contributing factor to London’s congestion is that everyone with cars in the western extension also drive around in central London now. It will be interesting to see if congestion drops after the western extension is abolished.

    Also, aren’t fuel taxes a road usage tax? The more you drive the more fuel taxes you pay.

  • RapidAssistant

    My criticism of this has always been that road pricing is always sold to the public on that horrid, generic term “to fund public transport improvements” – without ever really going into any detail on what that means.

    Motorists would be more sympathetic to the idea if they actually saw their money being spent on serious infrastructure projects that deliver a big bang for the buck – not cheap ‘n cheerful token gestures like park and ride schemes and more bus lanes full of empty buses which just cause more congestion because the buses don’t go where people want to go.

    Car owners have a right to be sceptical when they see most of the current motoring taxes – never mind road pricing on top of them – being syphoned off to pay for things other than transport.

  • Dan

    An interesting issue is the way in some contries (including parts of the US) toll roads / toll motorways are clearly seen as perfectly acceptable (France, Italy etc) whereas in others the concepts of tolls is rejected.

    In the UK the issue has always been ‘put a toll on the M-way and it will drive up congestion on all local roads’ – it may do – but one of the problems with UK M-ways – relating to population density and spread of communities – is that they have, in my view, too many access / exit points – so many travelling on them are on short journies adding to that element of infrastructure congestion.

    Clearly they were designed that way, but many will have been planned when car ownership levels and desire / ability to travel were much lower.

  • Paul Holt

    Paragraph 3 typo: “…congested are…” should be “…congested area…”.

    Paragraph 4: “…offer it free…”; you’re conveniently forgetting motorists already pay road tax, also petrol tax. Which tax are you proposing be replaced by congestion charging? Existing taxes are already being siphoned off, to use RapidAssistant’s phrase. Another phrase, considering the motorist as a cash cow on which yet more taxes can be levied, is the War on the Motorist.

    Paragraph 9: Dedicated bus, cycle and Olympic lanes are guaranteed to cause congestion. Are buses, cycles and Olympic dignatories to be accordingly taxed?

    Paragraph 10: “…a good offered free…”; see above.

    Paragraph 11 typo: “…Its bad…” should be “…It’s bad…”

  • Ian Perry

    “…forgetting motorists already pay road tax…”. Road Tax? Road Tax was abolished in 1937! Roads and subsidies to car manufacturers are paid for out of general taxation – yes those people who have and will never own a car, pay for the roads used by the motorist. Then “the motorist” expects to have public space given over to them for free in order that they might use their vehicle and take noise and air pollution to the neighbourhoods of others.

    From Wikipedia: “In February 1984, Nissan and the Government signed an agreement to build a car plant in the UK. The following month, a 799-acre (3.23 km2) greenfield site in Sunderland was chosen. As an incentive, the land was offered to Nissan at agricultural prices; around £1,800 per acre.”

    Despite massive subsidies, car manufactures needed billions of pounds of “bail out” money in 2008/9 – did this come from fuel tax?

    The arguments given here against ‘public space charging’ just do not hold up!

  • RapidAssistant

    Ian – my point was regarding the syphoning off of current motoring taxes in itself – that’s fine as long as the money is spent responsibly – which it is not at the moment. I am both a public transport supporter, but also an increasingly unwilling motorist – if I could get rid of the damn thing I would. But planning policy and economic realities brought on by the Thatcher era have forced me (like many others) out of the city centre. When we see so much cash being squandered on overseas aid, U-turns on defence projects, and subsidising the bone idle, then obviously we have a right to be sceptical about being taxed even more.

    If a government said to me that we are going to introduce road pricing and that money is going to be used directly to fund a railway line, a metro system or something which is directly help take congestion off the road on which I am driving, and that is being done in an open and transparent manner – then yes, I’m in support.

    I remember Ken Livingstone being interviewed by David Frost on the eve of the C-charge being introduced back in 2003 – and the most important question that was asked prior to introducing was – and I quote – would it be politically tolerable? In London’s case yes because it has a comprehensive public transport system already in place and tangible improvements to the system were (bendy buses apart) were subsequently made,

    The same argument doesn’t hold at the moment for a national scheme unfortunately.

  • Dan

    Paul: “you’re conveniently forgetting motorists already pay road tax”

    No they don’t – on this forum at least lets have some effort at accuracy:

    See the very informative:

    http://ipayroadtax.com/

    Which explains why the Treasury have alsways resisted the sort of hypothecated tax that Rapid’s post would make clear.

    Incidentally Rapid – I think you need to be careful when you weigh in with stuff like “When we see so much cash being squandered on overseas aid, U-turns on defence projects, and subsidising the bone idle” – I understand the rhetorical point but it’s all a bit Daily Mail, and leads on to silly debates – after all are not the current generation of pensioners drawing a state pension at 60/65 “the bone idle”? can’t they work? Next someone will be telling me “they’ve paid their dues” – no they have not – National Insurance does not fund the state pension (it just has a link to qualifying for it) – then we will have the old chestnut about NI and the NHS (I don’t personally think state pensions should not be paid by the way – just this kind of rhetoric detracts from the quality of the discussion.

    Point well made Ian.

  • RapidAssistant

    Unlike me Dan to be “populist” I know, but the crux of my argument was the bit about road pricing being politically tolerable. It simply isn’t at the moment – taking the Daily Mail out of the equation for a moment – as you say where our hard earned goes is another argument – but a recent online poll wanted Jeremy Clarkson to be the perfect transport secretary…which speaks volumes about current attitudes. Until there is a fundamental paradigm change that letting go of the private car is also an infringementl of freedom we’ll get nowhere (pardon the pun…)

    My worry is that we will only realising the error of our ways when the oil runs out…..another inconvenient truth that a lot of people hope will simply go away.

  • Dan

    I certainly agree with you last post Rapid! (And on oil, yes, why are we burning it like no tommorrow when it is a vital component of things like medicine production and valuable things like that – presumably)

  • Dan

    sorry – ‘your last post’ should have typed

  • Paul Holt

    Ah, the name change defence. Whether it’s called Road Tax or Vehicle Excise Duty, or Petrol Tax or Fuel Excise (plus Value-Added Tax on that tax!), it gives the lie to “free”, which is the point Dan missed.

    The myth of “free” is used by some politicians/commentators (usually Metropolitan types) to support their “plenty more where that came from” additional taxes.

    CW is missing the target. What is needed are (existing) motoring taxes spent on motoring needs (instead of simply disappearing into the Treasury) and increasing the viability of journeys by means other than the private car e.g. by remaking the links broken by Beeching.

  • Dan

    Paul – but this argument does not stack up, and never has – should existing alcohol taxes be spent on facilities for drinkers (eg subisidsed pubs, 24 hour booze retail in areas where that might not be commercially viable – because drinkers aren’t getting anything for all the taxes they pay)?

    Govts find way to take taxes from people – always have, always will. All services can’t be funded from income tax alone since the tax burden would then fall on too few. I can’t think of western democratic nations where this does not apply.

    Motoring ‘taxes’ are optional, since we live in a society where you can function without a car (I realise that will be debated by many , but since many people do function without a car it is thus demonstrably possible to do).

  • Stephen Humphreys

    Interesting arguments. As taxes on petrol etc go into general taxation then is the sum raised via these taxes more or less than that spent on the various motoring expenditures? Perhaps it could be argued that road taxes support rail. Also presumably motoring expenditure covers cycle lanes, pavement repairs and so on, not just expenditure on king car. The way we live in this country requires us to be mobile, hence rail fares will increase and motoring taxes will increase. We have no choice but to pay them if we want to be mobile. The government can do this and we will have to live with it or find solutions. I think the main solution is actually to travel less by all forms of transport. Working from home, remote meetings, living close to work and so on.

    I’m lucky I work from home and I don’t drive but I think the general attitude of the rail enthusiast is quite arrogant towards the motorist. An assumed moral superiority seems to take over. Just for arguements sake, what happens if the internal combustion engine is replaced by a greener solution than rail is able to offer?

  • Dan

    Stephen – good points – I’m not arrogant / morally superiror about it (I have 2 cars in household, a bus smart card for my city, and use a train once per week, I’ve got a bike too, and hiking boots (footpaths are parts of the transport network) – we’re all like that in society to a greater or lesses extent – I just get hacked off when people who pay taxes related to motoring get ‘arrogant’ about that expenditure.

    I pay ‘fuel duty’ or whatever it is called on the petrol in my mower – I might be annoyed if that got hypothecated onto motoring expenditure!

    There’s just no way motoring related income covers all motoring costs by the state – where do those costs end? eg if vehicle emmissions damage hsitoric buildings (like cathedrals) that then need costly stonework repair that might not to otherwise have been required how would the motorist pay towards that?

    If vehicle emmisions increase asthma costs to NHS – how is that quantified and charged back to combustion engine owners?

    Do road accident costs to NHS, Police, Fire etc all get charged back? Could they ever be? What would happen if that year say, it was decided that the costs motorists pay in taxes related to motoring had been spent on road construction and thus as it was getting near end of financial year we won’t send an ambulance out to help an accident vicitim….

    The lists of costs relating to roads and vehicles is massive. Motorists pay lots of taxes as Paul said, but I genuinly doubt they cover those costs, and quantifying those costs would not be possible – because they extend so far. It’s the price we pay for being / needing mobility – precisely your point I guess.

  • RapidAssistant

    Stephen – exactly. I am both a rail enthusiast and a motorist, so feel that I’m able to take a more balanced view than some.

    On one hand there is the anti-rail/pro-car brigade who believe the railways are a waste of time and the most extreme views (nonsensical, of course) is that we should go one better than Serpell and lift all the tracks and pave over the trackbeds to use as roads.

    The counterarguments:-

    London and the Home Counties, the West Midlands and Greater Glasgow to name but three, became large conurbations BECAUSE of the railways, and they are still heavily reliant on them – London in particular. Take them away or starve them of investment and it’s a recipe for transport “armageddon”

    And not everyone wants to drive, can drive in the first place, and some people can’t afford cars, or simply don’t like them…..

    On the other there is the pro-public transport/anti-car lobby that says that everyone can do without a car if they really want to, and motorists should be “punished” through taxation and the money spent (supposedly) on public transport. Fine if you live in London or one of the major cities which have highly developed public transport systems that can take you anywhere.

    The counterarguments:-

    What if you don’t want to live in a big urban area? What if you can’t afford to?
    What if the only place where you can get work for your chosen profession is in a certain area that is only accessible in a certain way.
    What if you have a big family?

    This is, of course all boiling down to NIMBYism – because something doesn’t directly affect someone, therefore they don’t understand the limitations. It’s down to individual choice and circumstances at the end of the day – as Stephen says we need to be mobile, our entire way of life since the beginning of industrialisation has grown up around it. The debate comes down to changing people’s attitudes.

    History has shown that battering people with financial penalties to change their behaviour only causes more ill-feeling and has created a political climate where the only thing that ever gets debated is taxation and finance – nothing else and this alone determines which government is in power.

    No government has ever been elected because it promised to build a motorway or a high speed railway line, after all….

  • Rhydgaled

    “Just for arguements sake, what happens if the internal combustion engine is replaced by a greener solution than rail is able to offer?”

    I don’t think that is possible, rail is able to offer electrified lines powered by wind, hydro, tidal or other renewable energy sources, so even if the internal combustion engine is replaced by such technology the best it can do is match the best that rail can offer. Even then, one full electric train would probablly require less electricity than the number of electric cars needed to carry that number of pepole. IF electric cars do take off then it MAY not be that trains can run full enough enough of the time but if you closed the railways then you would still have the problem of congestion.

  • Dan

    It’s not just the enviro impact of the fuel source of course – the road space required (and the carbon impact of constructing it) for higher numbers of cars (however powered) has enviro consequences – as does the need for space in urban areas where land is more valued for competeing purposes too.

  • john

    Road user charging is coming as made clear in DfT’s recently published business plan – that for HGVs is projected to commence by April 2014.

    As more cars move over to non-fossil fuels – revenue from excise duty on petrol and diesel will start to fall – so either the annual vehicle excise duty will have to rise significantly or alternative revenue sources will have to be found. – Road user charging is the most obvious.

  • Lots of sensible discussion going on here and not much ranting. Very refreshing!

    Paul, I’m guessing what you meant was: “What is needed are (existing) motoring taxes spent on [transport] needs.”

    You talked above about a war on the motorist. I think we can afford to be a bit less squeamish about this. Certainly where I live the use of cars is at laughable levels, to the detriment of the transport system, the local environment, and the quality of life of anybody on or near a road. I’d say it’s particularly the quality of life of the motorist that is reduced. There ought to be a limit of the right of motorists to excercise their free will to sit miserably in ridiculous traffic jams.

    They really are laughable.

    As with the national debt, hasn’t the problem become so severe that we (I have a car too) are going to have to accept a little bit of inconvenience in search of a solution?

  • Anoop

    Different approaches are required in urban and rural areas. The benefit of mobility needs to be balanced against the disadvantages of pollution and congestion, both of which are worse in urban areas, whereas the mobility benefits of cars are greater in rural areas.

    The most important changes would be legislative:
    1. To mandate that all road improvement projects incorporate high-quality cycle routes.
    2. New commercial and housing developments should be taxed according to their proximity to public transport and the number of car parking spaces being constructed, in order to encourage development in a geographical pattern which facilitates efficient public transport (e.g. high density development centred on railway stations, rather than scattered all over the place).

    People on low incomes living in rural areas may have no alternative to driving, and could receive subsidised petrol. For urban dwellers, the equivalent money should be spent on public transport instead.

  • Paul Holt

    quickerbybike.com is correct, as is the gentleman above claiming he’d “paid his dues” with a lifetime of National Insurance contributions. That his contributions have been squandered by politicians is the problem, and the scandal, and the target that CW needs to be hitting, rather than cheerleading yet another tax.

    Politicians like new taxes, it enables them to carry on squandering.

  • Paul Holt
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