The case for road pricing

Thornton Wilder remarked that there are individuals who fall in love with an idea long before its appointed rendezvous with history. We hurl ourselves against the indifference of the age.

It is now four decades since one of my first columns was published in London’s Evening Standard. In it I proposed an idea of which (if you read on) you’ll hear more. I got no response. It’s nearly 20 years since I wrote essentially the same piece as a whimsical side column for the Times. Labour’s Alistair Darling had called for debate on the idea. It never happened and my column attracted little notice. Fifteen years later, excited by a competition the Wolfson Foundation ran for the best proposal for implementing the idea, I wrote a serious 1,000-word column for the Times. One could almost hear my readers yawn.

And here we go again, five years on. I have no high hopes that this time my argument will catch the wind, but, kind reader, I hurl myself against your indifference.

At least I’m in influential company now. In a leading article on Saturday, my newspaper suggested the Prime Minister take the idea to the COP26 climate change conference in Glasgow. And we pointed out that there’s now a strong fiscal case for a chancellor of the exchequer to be interested: revenue from fuel duty will nosedive as motorists switch to electric cars. This is starting to happen already, exacerbated by steep increases in modern vehicles’ fuel efficiency. One milch cow is dying. We must find another.

You must have guessed what I’m talking about. Road pricing: asking motorists to pay for the roads they drive on, the distance they drive, and the times of day they do it. Road pricing is coming. The only question is when.

Please don’t huff and puff about new-fangled ways of extracting money from road users. The concept of pricing is almost as old as the road itself. Long before cars were invented, the idea had occurred that roads and bridges cost money to build and maintain, and those who used them should pay.

Tolls, then, are anciently established. The concept was placed on a proper institutional footing in England, and later Scotland, in the 18th century. ‘Turnpike trusts’ were established, with the trustees responsible for road maintenance, and rewarded by tolls. But in the 19th century this model was wrecked by the arrival of the railways. Trusts’ responsibilities were taken on largely by local government, and a preference arose for financing roads from taxation — mostly the local rates — instead of charging those who used them. The theory was that roads were of universal economic and commercial benefit, so everyone should pay for them.

If a case can be made for this (and it can), it was kicked away in the early part of the 20th century as horse-drawn traffic fell, car ownership exploded and it struck ministers that fuel was easy to tax. The finally enormous revenues that this yielded were supplemented by vehicle excise duty — a tax on ownership, not use — and the proportion of national revenue raised from road users peaked at around 7 per cent in 1999. It is now about 5 per cent and set to dwindle towards zero in the years ahead.

How is this lost revenue to be replaced? The answer is obvious. Mere ownership of a car should not be taxed, as it imposes no costs on others until the car hits the road. When it does, motorists should be charged for the mileage they drive, just as we are charged for the phone calls we make, the electricity we consume and — increasingly, with the introduction of meters — the water we use. The beauty of paying for our roads in this way is that (unlike with fuel taxes) motorists can be charged according to whether they drive at peak times when roads are congested, or at quieter times. A good many of us can choose when we drive, so the effect will be to spread road usage more evenly across the day, reducing traffic jams and maximising the efficient use of an asset — the asset being tarmac.

This flexible application of charges will also allow us to favour motorists who use quieter roads; and because those parts of Britain where the car is often the only way of getting around are more or less coterminous with the rural-urban divide, we can favour the rural motorist. Congestion charges (such as we apply in London) are just an early, primitive and clumsy attempt to achieve the same end. Road pricing, infinitely variable, would supplant them. As a motorist you’d receive a monthly or quarterly bill for the roads you used, the distance you covered and the time you drove.

When, 40 years ago, I first argued for such ideas, the technology was challenging. It involved transmitters strapped to a vehicle’s underside and a system for transpondence with roadside detectors. Today all you’d require would be for your smartphone to talk to a central data-gathering system. In fact it already does. That’s how Google knows there’s congestion ahead. Where and when you’ve been driving is knowable already, and the only thing that’s needed is to charge you for it. Unlike our European neighbours we British have been slow to embrace road tolls, but we can now profit from our own impromptitude by skipping the lumbering intermediate system of forced halts at motorway toll booths, and moving straight to remote charging.

My argument was once put to a former prime minister. ‘Brilliant!’ he said. ‘But it won’t happen.’ Well it will. Or I’ll be back (d.v.) in five years to hurl myself, yet again, against indifference.

Many readers who saw my column last month about Lady Margaret Bullard’s memoir of a diplomatic wife, Endangered Species, have asked how it may be obtained. You can order it at st-hildas.ox.ac.uk/content/endangered-species