My Road Pricing submission to the Select Committee
Last week, I wrote an article saying that lobbying for road pricing was the single most important thing we’d do this year.
Well, the Transport Select Committee is calling for evidence on road pricing for just one more week.
If you haven’t put in your submission, do so now.
To help inspire, here’s the submission I have just made on behalf of my company, Snap:
Submission to the Transport Select Committee Call for EvidenceThis document is a submission to the Transport Select Committee Call for Evidence on road pricing
It is structured as per the bullet points listed in the Call for Evidence request.
Road pricing
Environmental:
Electric vehicles are better for carbon emissions than internal combustion engines, but they are do not compare to public (and active) transport. Therefore it is essential that policy is framed around the maximum benefit to public transport and that electric vehicles alone are not seen as sufficient.
Studies vary but petrol cars produce around 180g-250g of carbon per km. Even assuming fully renewable energy, an electric car generates 60g-100g of carbon per km (thanks to carbon-intensive manufacturing and disposal).
By contrast, a Euro VI diesel bus with 60 people on board will emit around 20g. Electric buses are lower still.
Road pricing has the ability to achieve an extraordinary virtuous circle:
a) By pricing congestion appropriately, it will ensure that roads are kept free-flowing. This will make buses, which overwhelmingly travel on more congested streets (as these are the ones with the density of demand to support bus services), faster and more competitive.
b) Charges will be levied primarily on these high density, congested corridors typically served by public transport; making public transport more price competitive.
c) It shifts the economics of motor transport away from upfront fixed costs that incentives repeat use.
It is hard to overstate the positive impact on public transport that this would have, and the benefits for Britain’s quest for net zero.
Fiscal:
The last Labour Government created a burning platform by linking Vehicle Excise Duty to emissions. If the Government sticks to its target of phasing out the sale of petrol cars by 2030, VED and fuel tax revenues will collapse within the next decade. The resultant £40bn hole is almost equivalent to the entire schools budget.
This is urgent. As the Institute for Fiscal Studies (IFS) pointed out in October 2019,
There is a window of opportunity… before revenue from fuel duties disappears entirely.
Within just a few years, a tipping point will be reached when so many people have low emission vehicles that “existing taxes are eroded to the point that we have virtually no taxes on motoring at all”.
That will make any new charges politically toxic as it will not be possible to take away an existing tax in return. By contrast, road pricing as an alternative to fuel taxes will be attractive for those rural areas that have traditionally opposed motoring taxation, as it will concentrate payment in urban areas where congestion is most damaging.
If this is to be prevented, it is essential that a road pricing scheme is introduced quickly. Already, we have reached the point in which 14% of new vehicle registrations are for electric or hybrid cars.
Social:
As per the environmental section above, road pricing will transform the economics of public transport. This will create a virtuous circle in which the following occurs:
· Emptier roads will enable buses to run faster. By spending less time being caught in traffic, the cost of running buses will come down, making more routes economic
· Faster buses will make buses more attractive, causing more people to travel on them, making more routes economic
· Road pricing payments by motorists on congested roads will cause cars to be less attractive, increasing use of buses, making more routes economic
· More economic routes will cause more routes to run, increasing the proportion of people who switch to public transport and therefore making more routes economic
This virtuous circle means that we have a policy intervention that will enable more and better public transport at lower cost to the taxpayer – while acting as a revenue source for the Exchequer
Economic:
Government data tells us that there are 351 billion miles driven each year by cars, vans and trucks. We know that the existing motorists’ taxes that need replacing are £40bn and let’s say that we want to create a further £10bn ‘invest in transport’ budget (which we know from research is key to acceptability of a scheme). So a road pricing scheme needs to raise £50bn. That means that the average road user should pay 14p per mile, which doesn’t sound unreasonable.
As a very high-level set of assumptions, let’s assume that 14p per mile is the base price paid by users of ordinary ‘major’ roads. Let’s assume that the 38% of miles driven on local roads (which make up 82% of the network) are less likely to cause congestion, so these journeys will be free (immediately assuaging the concerns of rural voters that road pricing will increase their motoring costs: they’ll see a big fall in motoring costs, and rightly so). However, users of the strategic road network (32% of driven mileage on 2% of road mileage) will pay double, while the 10% of mileage that takes place on the 5 most congested roads will pay ten times the base price.
This is obviously only a set of assumptions, but it indicates that it is possible for a road pricing scheme to result in users of most roads (which are not congested) paying less than today, while the users of the most congested roads paying more. These are the roads which parallel the public transport corridors on which the virtuous circle impacts are greatest.
In this scenario, the price per mile for the strategic road network is 28p and a return road journey from Brighton to London will cost £38. A daily commute of 10 miles in the countryside would be free, but on the most congested roads (where public transport should be a real alternative) would cost £7.4k. 82% of roads would be free to use - and the remainder would be fast.
Some example journey prices at 28p per mile for the strategic road network
The reduction in road congestion caused by congestion being properly priced would make bus and coach services properly viable, while the increased prices paid by car users would incentivise use of them.
Implementation
The technology to implement road pricing now exists. In the past, fears of “big brother” GPS surveillance were a big part of the opposition.
Today, almost everyone carries a GPS device voluntarily, facial recognition cameras are on most street corners and devices such as Alexa listen into our conversations.
20 million of us have downloaded the Covid app, a piece of Government software designed to monitor our behaviour and send us binding instructions.
In such an environment, it is much harder to worry that road pricing technology is the first stage to state surveillance.
Public support
There is a widespread perception that the public are opposed to road pricing, but the evidence that exists does not support this assertion.
A survey published by the Department for Transport on 'Public attitudes towards road congestion', which was carried out between November 2009 and February 2010, found that over half of adults agreed that the current system of paying for road use should change so that the amount people paid was based on how often, when and where they used the roads.
Earlier, a 2007 survey of almost 2,000 adults by Ipsos-Mori found 61% support for road pricing if the revenue was used to improve public transport.
It is likely that attitudes have moved further in favour of road pricing since then given greater awareness of the climate crisis.
The biggest challenge is that politicians tend to be swayed by a vocal minority, and the Committee should be resolute in highlighting that this is short-sighted, not just ecologically or socially – but politically.
It is also important to set road pricing in the context of other policies that have been opposed by a minority and then become widely accepted, almost as soon as they were implemented. Sunday trading, water privatisation, gay marriage and even the NHS itself are all policies that were contested until adoption – and promptly became part of the settled status quo. Road pricing will be similar.
International Lessons
There are no examples of national road pricing schemes. But this is not a reason for not doing it.
When London introduced the congestion charge, it was, with the exception of Singapore, entirely unprecedented for a city of the scale and complexity of London. It was a success.
It is time for the UK to show similar ambition with a national road pricing scheme.
Conclusion
Road pricing has the potential to achieve the following effects:
· Make road user charging fairer compared to the existing models of fuel tax + VED
· Enable road users in rural areas to pay less than they do today
· Make currently unprofitable bus services economic on a standalone basis
· Reduce carbon emissions by migrating journeys from car to public transport
· Generate a new income source for the Exchequer
It is a policy whose time has come. The myth that the public is opposed is not supported by survey evidence and, anyway, history is littered with policies that are opposed by a minority and then become widely accepted.
Britain has an incredible history of transport innovation. Everything from railways to the bicycle was invented here. We pioneered large-scale congestion charging in London and it is time to do the same with a national road pricing scheme.
