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.

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