National Road Pricing Can the Public be Persuaded

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National Road PricingCan the Public be
Persuaded?

• Stephen Glaister
• Professor of Transport and Infrastructure
• Imperial College London
• University of Essex
• 12 January 2007

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The Government seems to be serious about National
Road Pricing

• in principle. Eddington strongly supports it.
• BUT
• Few people understand it
• The various policy options have not been
  explained
• Rule NEVER mention road pricing without
  mentioning the whole
• package
• The public cannot yet form a view
• What are the issues to be resolved and then
  explained?

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Issue 1 Objectives?

• Congestion relief?
• National productivity?
• International competitiveness?
• Personal welfare?
• Carbon emissions?
• Air pollution?
• Raising money?
• Relief of poverty, deprivation, social exclusion?
• Clarity and simplicity are essential and you
  cannot expect to do too much

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Issue 2 Who gets what exemptions or concessions?

• Residents?
• The disabled?
• The elderly?
• Police and emergency services?
• Essential service workers?
• Utilities vehicles?
• The unemployed?
• Motor Cycles?
• Public transport vehicles?
• Commercial vehicles?
• Taxis?
• Alternative fuel vehicles?

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Issue 3 How much will it cost to implement and
operate?

• Public sector
• Private sector
• Public sector
• Operating costs including enforcement costs
• Private sector
• Unless these are strictly limited they will
  obliterate the benefits
• Technology is not the problem but cost is a
  potential show stopper

Capital costs
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Issue 4 Who gets the revenues?

• Rule NEVER mention road pricing without
  mentioning the whole
• package the revenues are crucial
• Reduce fuel duty and/or tax disc (tax revenue
  neutrality)?
• Improve public transport alternatives?
• complimentary
• measures
• Improve road maintenance and road capacity?
• Defray the investment and operating costs of the
  pricing system?
• Other local or national public expenditure
  purposes?
• You cannot spend the money more than once!

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Revenue neutrality causes problems

• Money would be taken from urban areas and given
  to rural areas
• There is no new money for complementary
  measures
• better public transport
• better road maintenance
• more road capacity
• In the current national spending climate
• there will not be new Exchequer money
• Public would only accept RP if revenues are kept
  for local use?

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Road pricing is not really about carbon and
environment.

• but different policies do make a difference

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Issue 5 New road capacity?

• Outside London both the public and industry
• care far more about road conditions than about
  public transport.
• Clarity on a coherent future strategy for roads
  is crucial
• (we do not have one)
• Nb. Current duty on petrol (above normal VAT) is
  0.47 VAT per litre
• Sterns 85/tonne of CO2 would imply ad duty of
  0.14 per litre
• Rational pricing of carbon is not going to remove
  need for new road capacity in the right places.

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New road capacity?

• There is a very strong case for some new roads
  without road pricing
• Would National Road Pricing demolish the case for
  new roads?
• NO!
• It would reduce it but not remove it
• With proper road pricing you have proper
  investment signals
• In some cases there is enough benefit to justify
  tunnelling and enough revenue to pay for it

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Source Archer and Glaister, Independent
Transport Commission, 2006
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Source Archer and Glaister, Independent
Transport Commission, 2006
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Ratio of revenues to costs and km. of road, by
road type and Region. Revenue neutral, net of
environmental cost
Source Archer and Glaister, Independent
Transport Commission, 27 November 2006
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Ratio of revenues to costs and km. of road, by
road type and Region. Revenue neutral, net of
environmental cost
Source Archer and Glaister, Independent
Transport Commission, 27 November 2006
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Issue 6 Is it Fair

• Important to the public
• Complex to analyse
• Depends crucially on answers on previous issues.
• When you consider THE PACKAGE fairness is not
  obvious.

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Traffic change from 2010 base congestion and
environmental charges Revenue 16bn pa
Revenue 0
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Map of deprivation in England (at census ward
level)
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Income Deprivation and traffic change ()Revenue
neutral (England only)
Low income deprivation
High income deprivation
Traffic increases occur in wards with low income
deprivationTraffic falls occur in all types of
wards
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Issue 7 Trust and Governance - who sets charges
and is accountable for the money?

• Which body would
• set the charges?
• collect the revenues?
• make investment decisions?
• carry the risks on those decisions?
• Governance of the funds. Credibility is essential
  on
• Prudence and efficiency
• Accountability
• Transparency
• Nb. London CC works only because these issues
  are resolved

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Is GB Local Governance fit for this purpose?

• London works only because of the clear
  accountability
• of the directly elected mayor and Assembly.
• How can this be achieved outside London?
• ? Replicate London in West Midlands,
  Manchester.etc?
• ? Build on the existing Passenger Transport
  Authorities?
• ? Create new bodies to own and regulate
  local roads?
• Public Trusts?
• Regulated, privatised utilities?
• Road pricing is the most likely source of new
  funds for devolved administrations

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Issue 8 Who will take the lead to implement
National RP?

• Several Whitehall departments involved
• DfT, HMT, DCLG, DeFRA, DTI, DCA.
• Stern
• Eddington
• Barker
• Lyons
• Successful delivery will require clarity on
  objectives and strong leadership.
• Cf. the history of CC in London

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Big issues to resolve for a practical policy

• 1. What are the objectives?
• Who will get reductions or exemptions?
• Cost?
• What happens to the revenues?
• Implications for future roads strategy?
• Is it Fair?
• Trust and Governance?
• Will anyone take the lead?