13 Jan 2007

Road Pricing - Tax or service charge?


There are currently two petitions on the UK government's No10 website, competing for signatures on opposite sides of this debate:
Traveltax which is painfully misinformed and yet has about 300,000 signatories, and
Yes2roadpricing which is a simple plea for action on the environment and has under 100.

You can probably guess which one I signed.

In debates with friends I hear the same arguments presented again and again.

  • It's an added tax and road users are already too heavily taxed.
  • The money won't be used to improve public transport.
  • It will allow the government to track everyone and is an invasion of our privacy.
  • It's not technically affordable. People won't want to pay £200 to have a GPS device installed in their cars
I'll try to tackle each of these individually (although there is some overlap) to demonstrate why they are inadequate objections, or in at least one case, deluded.

It's an added tax

Every proposal for a national road pricing scheme so far has included some formula to indicate that it will replace road tax and/or fuel duty. However, there is no legislation currently in place to permit a national scheme. If it is an added tax, it is an added local tax.

The enabling bill for road pricing at present specifically states that such charging schemes are to be local, under the direct control of individual highway authorities, and that trunk road schemes (the only national level schemes) are reserved for bridges and tunnels more than 600m in length, or for trunk roads as requested to integrate with a local scheme. In other words, the government cannot introduce a national scheme under this bill.

Local pricing schemes are inevitably an added tax. There is no viable mechanism for reducing either road tax or fuel duty to compensate for the income gained from local road pricing. The only likely reductions will be to council taxes in the area covered, and even that will happen only if the local people force their councils to make it happen.

Take, for example, my local council. Their gross expenditure on roads and transport services for 2005/06 was £1.4 million. Only £112,000 of this was provided by related income (such as taxi licences, bus route concessions and the like). The rest had to come from the council's other income, which is 45% derived from the Council Tax. With a local congestion charge in place the council tax could, in theory, be reduced by 25%.

It won't be used for public transport.

The money raised by such a scheme is cordoned off and exclusively reserved for the authority's local transport plan. (see Schedule 11) This means that it can only be used to maintain roads for which it is responsible, invest in new roads, and to support local public transport initiatives.

It will allow the government to track everyone.

This is patently absurd. First of all, the government can already track everyone if it should want to - via mobile phones, CCTV and number-plate recognition and high resolution sattelites. Secondly, having a GPS locator in your vehicle is seen by many people as a benefit - it allows your car to be located and recovered if it is stolen. And lastly, why on earth would the government want to spend billions of pounds on the personnel required to keep track of everyone (and how could it survive the next general election?).

It may be the case that the technology could be used to catch and prosecute criminals more easily. It may even be the case that it could be used to enforce speed limits through average speed calculations and fines. But anyone objecting on those grounds is simply declaring their opinion that they have the right to break the law.

This is a fact of life, in any case, because the UK police are already implementing a national database of vehicle movements using number plate recognition. This publication by the ACPO ANPR STEERING GROUP (Word Doc) makes the intentions and scope perfectly clear. There remains some debate about the legality of the system under privacy and human rights laws, but as an extension of existing monitoring rights afforded to the UK police, it is minimal. Implementing this system without harnessing the information to provide a more equitable (based on actual road use, rather than a flat fee, as road tax is at present) taxation system would be negligence on the part of the government.

It's not affordable

A recent feasibility study declared that the issue of adding technology to vehicles made a national scheme unaffordable until around 2014. Using number-plate recognition systems on a national scale is seen as far more practical. The cameras are widely in place and putting additional ones at, say, every motorway slip road to initiate charging for the motorway network, would be affordable (if the legislation allowed it). The fact that the Police are considering it purely on an law-enforcement basis shows that it is relatively cheap.

As for the cost of the device and people not wanting to pay - people are already paying £200 for a GPS device to go in their cars. What they are really objecting to is connecting that device to a transponder so that it can be polled by groundstations and the information used to charge them. In fact, the most cost-effective method does not involve any additional equipment being placed within the car. Only the number plate is needed, and that is a legal requirement already.


On the whole, I regard the objections to road-pricing ill-informed and facile. The current situation is that it is very early days and, as reported in the (anti-government and vehemently anti road-pricing) Telegraph recently, the official Dept of Transport position is:
"No decision has been taken on whether to implement a national road pricing scheme. We are working with local authorities to investigate the potential of local schemes in tackling congestion. Until we see how pricing works in practice it would be premature to decide whether we should take forward a national scheme and what that scheme might look like."

The opposition petition, calling the concept a travel tax, is full of misleading statements and outright lies about what the state of play is with respect to road pricing. It plays up to the most irrational fears of the UK neocon tendency, and ignores the reality. When looked at rationally, the only way that road pricing could be introduced without being an added tax is by making it a national scheme.

The purpose of road pricing schemes is primarily to relate the cost of driving to the impact it has on the infrastructure. Congestion costs everyone money and time. It consumes massive quantities of fuel for no benefit. It pollutes cities and wears out roads. The very people who object to this measure are the same people who complain about the traffic queues and roadworks that double the duration of their daily commute.

How a national scheme could work

Technology: Harnessing the data from the poilice vehicle movements system means not having to add anything to any car. Vehicle number plate recognition, as implemented without any major hitches in London, permits the tracking of vehicles past as many points as you have suitable cameras, and installing the cameras and data networks can be a gradual thing, concentrating on the worst congestion areas first.

Implementation: A VNPR system could go universal from day one (unlike a GPS system). As soon as enough cameras are in place, charges can be levied against the car owner via the police and DVLA computer systems. Charges can be adjusted for vehicle types, to match the current road tax regime, and can be collected as an annual bill with the registration renewal, or whenever the vehicle changes hands.

Tax implications: The two main taxes for road users are Road Tax and Fuel Duty. The former (termed Vehicle Excise Duty) is worth around £5 Billion to the government each year, while the latter (Fuel Excise Duty) is worth around £25 Billion. (source). Thus the current tax on road users amounts to £30 Billion annually, or £1,000 per vehicle per year. By comparison, the annual expenditure on roads in England is £6 Billion. Replacing Vehicle Excise Duty with road pricing can be justified on road system maintenance grounds alone, provided that it is a direct replacement with comparable levels of revenue.

Fuel duty has never been used as a direct road funding tool and has always been justified as a 'dangerous luxury' tax, similarly to cigarettes and alcohol. In time it would be preferable for fuel duty to be replaced by a general carbon tax on all fossil fuels, and I have no doubt that this will, eventually, happen. But arguing that fuel duty should be reduced to compensate for national road pricing fees is only tenable if the charges for roads exceeded £6 Billion a year in total.