Code Red Road Pricing - Now or Never?
Glenn Lyons
President of the Chartered Institution of Highways & Transportation (CIHT) and Mott MacDonald Professor of Future Mobility at UWE Bristol
On 7 April 2022 the 12th event in the PTRC Fireside Chat Series took place. It followed publication in February of ‘Road Pricing ’ – the House of Commons Transport Committee’s report on its latest inquiry into the topic of that name. Her Majesty’s Treasury is set to see a diminishing revenue stream from fuel duty (currently valued at ￡35Bn a year when combined with road tax) as the vehicle fleet moves from petrol and diesel to electric. The Inquiry addressed “the implications of accelerating the shift to zero emission vehicles and the potential for introducing road pricing, or pay-as-you-drive, schemes”. The aim of the Fireside Chat was not so much to consider the finer points of economics and technicalities regarding road pricing, but instead to take a sobering look at its prospects and where, if ever, it can find its place in the current socio-political environment to become a reality.
With some 140 people joining us for the event, I had the pleasure of chairing the discussion, which one senior audience member afterwards indicated “was one of the best discussions of road pricing? Road tax? Congestion charging? I have heard”. This was thanks to the excellent panel involved, shown below:
What follows is an account of the key points that stood out for me and thoughts that were provoked, having had the privilege of exploring the topic with the panel and questions from our audience. You also have the opportunity to (re)watch the whole event on YouTube . I encourage you to do so to fully experience the richness of what was explored, including the audience commentary.
Setting the context
60 years ago, in 1962, a panel was set up by the Ministry of Transport to examine road pricing, with its report being published two years later. It was chaired by Reuben Smeed who, as it happens, was the PhD supervisor of Professor Phil Goodwin. The report began as follows: “Economists have claimed that considerable net benefits could accrue to the nation if vehicle owners had to pay higher charges or taxes when they used congested roads than when they used uncongested ones, without there necessarily being any change in the total motor taxation paid by them” (note for later the reference to economists). The panel’s task was to consider the technical feasibility of collecting such taxes. The first requirement of any system was that “[c]harges should be closely related to the amount of use made of the roads” noting that “[t]he most obvious ways of measuring road use are in terms of time or distance”. In 1962 there were around 9.5M licenced vehicles in Great Britain. The last of the important requirements set out in the 1960s report was that the road pricing system needed should “be capable of being applied, if necessary, to the whole country and to a vehicle population expected to rise to over 30 million”. Good thinking. In September last year the total stock was in excess of 39M – a four-fold increase.
Road pricing as a concept has been around nearly as long as England’s hope of winning the football World Cup again. It has moved in and out of professional discourse in the transport sector in relation to serious contemplation of its introduction. Many of the issues and debates are now well rehearsed. Yet road pricing seems to be a Sisyphean task: a heavy rock we push, time and time again, up the slope to the summit of implementation, only for it to slip down again to the bottom before the top is reached. While the London Congestion Charge was introduced in 2003, failed referenda in Edinburgh and Manchester followed. The UK Labour government in 2006-2007 were actively looking to take forwards national road pricing, until a No. 10 petition with 1.7M signatures against the idea overcame political resolve (down slipped the rock once again).
So, our conversation began with contemplation over whether another attempt to push the heavy rock up the slope could possibly lead to any other outcome than another debate and report in a few more years’ time.
The House of Commons Transport Committee in its report (which is very short at 21 pages – perhaps a sign there too of loss of appetite for the Sisyphean task?) recommended the need for “an honest conversation with the public on the funding implications for road development and maintenance and for other essential public services of decreased revenue from vehicle excise duty and fuel duty” (as we move to electric vehicles – emphasis added). So what can be put on record as the context for an honest conversation with the public on road pricing in 2022:
So, who’s for a public conversation on road pricing?
What is road pricing the answer to?
There are different ends to which road pricing (nationally) might be the means. Is there a clear and compelling opportunity to seize or burning platform to address? Steve pointed out that according to the RAC Foundation’s estimation “by about 2028 the amount of money that’s gone missing from the Chancellor’s coffers will cause that chancellor to be saying ‘what the hell?’”. That should be a pretty tangible burning platform (and was the focus of the House of Commons Committee report). But isn’t climate change a burning platform too? For that burning platform we would be looking to road pricing to help bring about transformative change in terms of reducing the vehicle kms being driven on our roads. Yet transformative change does not seem to resonate with ‘revenue neutral’ which is what the Committee supports (as did the original Smeed Report). Transformative change means being able to tackle a car dependent society, quickly. We need a transport system wherein funds – hypothecated perhaps from road pricing – are available to support alternatives to car use. We need a more efficient transport system and one that is more environmentally responsible, as well as one that addresses health and safety. We need a transport system where users pay their way for its maintenance. And we may wish to see a wider set of externalities from road use accounted for in terms of payment. It quickly becomes apparent that road pricing could be the answer to lots of different things.
Phil suggested that it may not need to be a precondition of pressing ahead with introducing a working system of road pricing to have prioritised between such objectives. This said, if the case for introducing a system is ambiguous, it risks providing ammunition to those intent on sowing seeds of division and in turn opposition to the system.
It is not clear that if carbon is the problem and carbon pricing is the answer, that road pricing is the mechanism. Fuel duty is already a simple means of addressing this. That said, electric vehicles, while being zero emission at the tailpipe, may still be responsible for emissions associated with their use if fossil fuels are being used to keep up with increasing demand for electricity generation. As such, road pricing otherwise seen to be for the purposes of helping a worried chancellor, is also important for addressing overall carbon emissions in the economy. And electric vehicles still impose other external costs on society for which it may be tempting to look to road pricing to (also) address.
We are at risk then of becoming mired in complexity at the outset of our deliberations by asking ‘if road pricing is the answer, what is the question?’.
Communication, shhhh – don’t mention RP!
Steve has a problem with economists when it comes to road pricing; not because economists aren’t needed to make sense of road pricing, but because through economics alone we can get drawn into the theoretical bowels of road pricing and not confront the political realities of implementation which relates in turn to matters of communication.
It doesn’t take very long when a group of transport professionals get together to talk road pricing for the complexities, qualifications, assumptions and caveats to surface in the discussion. If we struggle with clearly bottoming out such issues, can we really imagine this is going to be an easily communicable issue when it comes to politicians and the public? Perhaps this explains in part why past referenda on road pricing have sometimes failed. As Sharon noted, we are not necessarily very good at explaining ourselves. Yet road pricing will need excellent communication, facing as it does (to quote Charlene) ‘a social media crazed world’. In that world, the controversial topic of road pricing has, as Charlene noted, “the dubious honour of being the most signed petition until Brexit and a visit by Donald Trump – not exactly the company you want to keep” (4.1M people signed a petition calling for a second EU referendum and 1.9M signed a petition calling for any visit of Trump to the UK not to be treated as an Official State Visit).
Our panel suggested not using the phrase ‘road pricing’ at all since it is ambiguous in its meaning professionally as it is in public debate; and it gets people’s hackles up. Better instead, surely, to focus communication, as Claire stressed, upon the problems that need to be addressed or opportunities that need to be seized. What do we want to achieve (the end), for which road pricing may be the means?
Steve observed, “If something’s politically difficult it isn’t because politicians make it so, it’s because the people who are going to or not re-elect them think it’s so”. In this regard given ammunition, certain newspapers will make it their business to encourage their readers to see the worst in road pricing by finding ‘everyday lives’ examples to amplify the negatives. This may be why one has had to take care uttering the words ‘road pricing’ in the corridors of Whitehall, as one would take care saying ‘Voldemort’ at Hogwarts. It a climate where trust of politicians is low, the communication challenge for engaging with the public is all the greater.
Why bother? But if you do, KISS
Were it not for the urgency of the matters many transport professionals hope road pricing, if ever implemented, could address, it would be tempting to give up entirely on the Sisyphean task and let road pricing rest in peace. Steve was clear in his belief that time-distance-place road pricing was too complex and controversial to implement and efforts were better not expended (“hope is the first step on the road to despair” he suggested). His proposition was to KISS (Keep It Simple Stupid). In principle, this had also been the suggestion of Phil (along with Jillian Anable, myself, Greg Marsden and Graham Parkhurst) in his submission of evidence to the Transport Committee inquiry.
Steve’s proposal is to stick with fuel duty for petrol and diesel vehicles and to introduce a simple distance-based charge for all zero emission vehicles. The former is cheap to collect as a tax and hard to avoid being paid. The latter would then pick up more and more vehicles as the transition to a fleet of zero emission vehicles takes place. A distance-based charge is also simple to administer, and could for example, be collected annually at the time of a vehicle’s roadworthiness test (MOT). Indeed New Zealand has had Road User Charging for several years which, for diesel vehicles, is based upon vehicle type and weight and on distance travelled - licences have to be purchased for each (additional) 1,000 km to be travelled.
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The trick with such a simple proposition would be to get a system of road pricing in place. Rather than being drawn into issues of exploring public acceptability, it may be appropriate instead to focus upon inevitability – with it being a requirement for all subsequent EVs sold new and then, eventually, with an obligation for all existing EVs to also comply. This presupposes political willingness to champion of course, but with the burning platform of a fiscal black hole this may be possible.
So, were there KISSes all round for the panel? Phil could sign up to this in principle, noting that “we’re battle weary a bit on this one and it would be nice to get something moving quickly”. He did, however, have his own reservations – not least that “if there is a way of screwing it up, somebody will choose that way of choosing the initial one [the simple scheme]… at the moment that’s the world we’re living in”. Sharon considered herself a ‘yes, but…’ on the simple approach proposed, the ‘but’ being concern over the implications for social inequality (more below). Charlene and Claire were somewhat more guarded – they could see the merit of getting road pricing off the ground and that being sufficient to fill the Treasury’s black hole; but this would not address the transformational change needed. The key question then becomes: would a simple enough form of road pricing that is politically deliverable, also be suited to later adaptation to address more objectives?
In essence the choice seems to be between:
(1)?????A scheme ambitious enough to address multiple objectives and transformational change but which runs a very high risk of never seeing the light of day;
(2)???A simple scheme that is deliverable but which is unable to address multiple objectives and transformational change;
(3)???A simple scheme that is deliverable and which holds a later prospect of being able to help address other objectives and help address transformational change; and
(4)???Do nothing.
The leaning of the panel, as I understood it was towards option 3. This may seem a compromise compared to option 1, and there was some concern that option 3 would not demonstrate the urgency of action on transformational change needed. However, pinning hopes on option 1 risks ultimately causing more delay or even road pricing being killed stone dead. Option 3 has the possibility of national road pricing creating a new canvas for local authorities to then determine how they are best able to help in addressing (further) change, transformational or otherwise, which may include local congestion charging. Indeed, examples of road pricing schemes often relate to cities rather than countries.
It was something of a relief to discover that our panel could find some broadly common ground here. A consensus of sorts (rather than fundamental disagreement) surely seems a better basis upon which to build advocacy for action and related communications efforts.
The ￡500 car
Sharon introduced us to her concept of the ￡500 car. Not the swanky new motor (EV or otherwise) but the tired old ‘good runner’ that just about does the job for a household on a tight budget for whom the car is seen as essential. Poverty is real right now. Alongside talk of new EVs, and other new fuel-efficient vehicles, are older second-hand cars; and their owners are facing a double whammy – higher road tax because the vehicles are more polluting and higher to run because they are less fuel efficient. Sharon emphasised the need in pursuing road pricing to ensure that “the role of the cheap car for social mobility is well understood”. At the moment we are rewarding and subsidising those who can afford new efficient (electric) vehicles and who may also have affordable access to alternatives to private car use. In this respect, EVs are an overt representation of inequality in society and in mobility. Even with a KISS road pricing approach, attention must be paid to helping those who may not be able to afford to pay to go about their daily lives. Yet this does not need to be through the road pricing mechanism itself (or through fuel duty) but could be through what is now called Universal Credit.
Sticking with the KISS road pricing approach, over time, more and more people will come under the distance-based charging. Should such charging be revenue neutral? Revenue neutrality, like road pricing itself, is ambiguous even if it might seem understandable in broad conceptual terms. Revenue neutral compared to what? Revenue neutral at what level? Neutral for who? If people who travel more pay more, traded against those who pay less because they travel less - such that neutrality is achieved overall - what does this mean for the people or parts of the country concerned??The reality is that road pricing is unlikely to feel revenue neutral to individuals – there will be winners and losers. Will those who have the broadest shoulders pay more, or will those who are most dependent on their ￡500 car and who lack the alternatives but who must drive to go about their daily lives pay more? Perhaps attention needs to turn from notions of neutrality to being ‘politically acceptable and fair’.
The future for pricing
Claire considers that if an honest conversation with the public is on the cards then it needs to be a conversation about the unacceptable nature of our current transport system and the imperatives for change; not about different forms of road pricing. We need to start with the problems and opportunities facing us and our futures, and the futures of younger generations. Steve pointed to the Mayor of London and efforts to foreground a need to tackle the air quality problem affecting public health. Talking about children’s lungs being affected gets attention compared to vaguely talking about congestion which does not. The future of road pricing lies in the hands of such an honest conversation, from which it should flow if it is indeed the right answer to the right question that resonates with public sentiment. Perhaps also endorsing avoidance of time-distance-place road pricing, Phil pointed to a future that cannot be about managing congestion because unless the UK is going to renege on its commitment to decarbonisation while the rest of the world successfully addresses global climate change, road traffic levels must go down. Pricing must do more than redistribute traffic in time and space.
Road pricing’s future is surely one of partnership. It is not the only means at our disposal to address transport objectives. It must be an enabler of and enabled by other measures such as roadspace reallocation to other forms of mobility, and redesigning places and rethinking access. This should be seen as an important precursor to the implementation of KISS road pricing and in turn something that works in tandem with the road pricing to help achieve transformational change. This said, it was noted that the Department for Transport had for years sought to promote a policy of reducing the need to travel. Yet when digital connectivity was activated (thanks to the COVID-19 pandemic) to bring this about for work-related travel, the Prime Minister then wanted to see people returning to ‘the office’. Never waste a good crisis it is said, and yet it seems apparent that the UK may have done. That said, we have more than one crisis on our hands, so opportunity still exists to act upon the considerable flux in the system at present.
Changing climate and changing climate of opinion
The choice does not exist to follow a non-transformative future in the face of climate change (unless we want it to be a miserable short-lived future). This gave rise in the discussion to the distinction between the changing climate (which evidently is changing in a visible way as each year goes by) and the changing climate of public opinion. The latter is key to securing public and political support for addressing the former. My own sense is that denial is at play in terms of the climate of opinion. This is not the insidious denial promulgated by the fossil fuel industry regarding climate change in the greedy pursuit of profit. It is the denial human beings exhibit as a response to intense stress and loss. Faced with the science, are people moving into denial given the gravity of the implications for life on earth?
If so then they may well not be receptive at the moment to actions intended to respond to or avert the loss. And this is the point – we can act now with urgency, but the window of opportunity to advert serious loss is closing. In line with the stages of grief, it may well be that following this denial the public exhibit anger at climate change and anger at who has been most culpable. They may move in turn to bargaining – people anxious for opportunities to avert (further) loss. I suggested that this might mean that the timing of this current round of focus on road pricing could be premature. Do we need to wait for the denial to move to anger before real appetite for transformation will support road pricing? Phil was concerned that such anger could indeed be a daunting prospect and reflect an even more divided and inequal angry society. In contemplation of that, it is surely all the more essential that we are putting in place now the means we need to be able to tackle climate change with ever more urgency and intensity.
?Signing off
It has been a great privilege to have been part of this discussion in such esteemed company. We have surely never seen a time previously in the last 60 years of considering road pricing when the stakes have been so high and the surrounding circumstances so volatile and complex. I set about developing this event with a determination that it would not be just ‘another discussion on road pricing’. I don’t believe it has been. We have emerged with some pragmatic and reasoned insights that might, just might, create ripples of interest and influence that help prompt action that eventually follows. If not, I suppose others will consider persisting with the Sisyphian task in the years ahead, though troubling indeed those years may become.
My thanks to our panel and audience for making this yet another stimulating Fireside Chat.
Postscript
In case of interest, some participants in this discussion were involved in submissions to and giving evidence at the House of Commons Transport Committee’s inquiry into road pricing. Details of all evidence submissions are here: https://committees.parliament.uk/work/900/zero-emission-vehicles-and-road-pricing/publications/written-evidence/ . Specific submissions can be found as follows:
Associate Director Central Government at Morrison Low
2 年As soon as you said multiple objectives you already lost the debate. Road pricing requires extraordinarily high levels of trust and confidence that the cost being extracted actually flows to concrete (sic!) deliverables. If motorists perceive it as yet another sin tax, you have created strong incentives to resist. So I completely agree with the of your argument. KISS. Lock it into legislation, make it hard and punishing for legislators and bureacrats to rort. Fundamentally it has to be fair, equitable, transparent, and completely understandable. The audience is not us the experts, it is the motorists, the citizens, and the public - do they understand? do they believe what we are saying? and do they trust us? Most importantly, how long can they trust the promise for? Too often the perfect is the enemy of the good, distance is perfectly fine for everywhere except big cities, but trying to do distance and time of day..... and purpose.... and occupancy,.... etc are just recipes for complexity and failure. Simple, single purpose tools. Do distance (and maybe mass) use other tools for congestion and carbon.
Living the dream
2 年Is road pricing too narrow a question - would individual carbon allowances be a more interesting and more valuable debate to have - focussing on the existential issue rather than the time we spend getting from a to b...?
Professor, AM, PhD, FASSA, FAITPM, FCILT, Founder and Director of Institute of Transport and Logistics Studies (ITLS), University of Sydney Business School
2 年Approach 3 has been proposed by myself and Michiel Bliemer in our research but we have not been able to get any buy in in Australia- sad but the idea of that annual adjustmemt has attractive buy in and delivering efficiency and equity outcomes. With my good friend Phil Goodwin on the panel we can guarantee sensible impactful commentary. On tolling - this is not road pricing but a way of getting a road built and funded and tolls are not an efficient nor equity outcome , being so rigid with stupid locked in concessional deals that bear no relationship to good economic outcomes and do nothing for the unpriced roads.
strategy | futures | behavioural insights
2 年Just watched it. Fascinating debate. The comments about how to engage people in a conversation about this resonated most with me. Sometimes it's easy for us, as transport planners, to forget that for most people travel and transport are not hot topics of conversation; even congestion rarely gets a mention in focus groups unless directly probed. But it is rare to find people who don't think about and worry about the future - ours, our childrens, our parents, our friends. As the panellists suggested, the conversation needs to pivot to one about what future we want, what sort of places - cities, towns, villages - do we want to live in and leave as a legacy for future generations. And then move to exploring the 'what's stopping us...?', and 'how might we....?'.
Driving world class climate innovators to maximise potential and scale.
2 年KISS it all goodbye, most regular people are finding it challenging with the simplest system that is already in place. The more you drive the more you pay tax via the % of duty placed on fuel which increases as fuel prices increase. The tax chest is filling up. Voters wont stand for much more so its not simple. EV’s are still not a viable alternative for many people right now. The whole system needs reviewing not more tinkering around the edges.