25
The
Economist
April 22nd 2023
Britain
Road pricing
Less jam tomorrow
B
RITAIN’S ROADS
are some of the most
jammed in the world, with roughly 41m
vehicles crawling along 250,000 miles of
tarmac. Congestion is estimated to cost
about £10bn ($12.5bn) a year in lost time.
Plans to build new “smart motorways”,
which would add capacity by getting rid of
hard shoulders, have just been dropped.
Average speeds are slowing (see chart 1).
Motoring creates other problems be
yond congestion. Vehicles cause 27,000 se
rious injuries or deaths each year, and are
responsible for 10% of the country’s air
pollution and onefifth of its greenhouse
gas emissions. The Treasury levies fuel du
ty of 53p per litre on the price of petrol and
diesel as a way of reflecting these external
ities. The tax has long failed to keep pace
with inflation but it will still haul in £30bn
this year, 2.9% of all tax receipts.
Fuel duty is running out of road, how
ever. As part of its journey toward netzero
carbon emissions by 2050, the government
will ban the sale of new internalcombus
tion engine (
ICE
) vehicles from 2030. As
more motorists switch to electric vehicles
(
EV
s), fuelduty receipts will fall to zero ov
er the next 25 years. The pace of
EV
sales
has already surpassed forecasts by the Of
fice for Budget Responsibility, a watchdog,
which had expected fuel duty to drop by
about a third as a percentage of
GDP
by
2030. Although just one in 70 of the vehi
cles on British roads is purely electric, they
accounted for 15% of new cars sold in 2022.
To fill the budgetary hole the Treasury
could tax something other than motoring.
Raising income tax by five percentage
points would do the trick. But even if that
were politically palatable, leaving motor
ing untaxed would result in more of it. Un
til the grid is decarbonised, carbon is still
being emitted when
EV
s are being charged.
So the government also needs to encourage
a reduction in motoring miles to help meet
its climate targets.
That means the Treasury still needs to
devise a tax that discourages excessive mo
toring. It could levy a duty on electricity,
EV
s’ “fuel”. But there is currently no way to
differentiate between charging a Tesla at
home and powering a hairdryer. A report
published last year by a crossparty parlia
mentary committee received evidence
from economists, engineers and transport
planners. It concluded that only one credi
ble solution exists: road pricing.
Road pricing means charging motorists
for driving on public roads. Singapore is
the flagcarrier for this approach: the city
state has had it since 1975. Road pricing al
ready exists in limited form in Britain,
from tolls on motorways and bridges to the
congestion zone in central London. A na
tional version would probably mean charg
ing people based on the distance they
drive. But the politics of road pricing is
tricky; operational questions loom, too.
The British government first explored
the idea back in 1964. It estimated then that
reduced congestion would provide £150m
per year in benefits (equivalent to 0.4% of
GDP
at the time). The idea was revived 40
years later, after the Department for Trans
port published a 180page feasibility study
concluding that road pricing could save
£10bn a year (0.6% of
GDP
) by reducing
congestion. The Labour government com
mitted to introducing it, but after 1.8m peo
ple signed a petition against it in 2007—
the fourthhighest total in the history of
online parliamentary petitions—the plans
were ditched by the Conservativeled gov
ernment in 2010.
Views seem to have softened a bit since
then.
The Economist
asked Ipsos, a pollster,
to survey Britons about their attitudes to
wards replacing fuel duty (see chart 2).
Some 30% of the 2,000 people polled said
they supported road pricing; 32% opposed
it; nearly twofifths were indifferent. But
Conservative voters, the elderly and the
poorest households were most hostile.
Many worried that it would increase their
motoring costs. Jeremy Hunt, the chancel
lor, responded to the parliamentary com
mittee by saying the government has no
plans to consider road pricing.
In its report the committee urged the
government to look at “telematic” technol
ogy—black boxes that transmit informa
tion about a vehicle’s location and speed to
receivers. A system of dynamic pricing
would have the benefit of encouraging
people to drive during quieter times of the
day, reducing air pollution (for so long as
ICE
vehicles remain on the roads) and alle
viating congestion.
Dynamic pricing may sound desirable
to economists, but it comes with a hefty
risk of failure. Trying to optimise the be
haviour of some 35m motorists would be
no simple task. Although prices could be
set by an armslength regulator such as the
Office of Rail and Road, a system of Uber
like surge pricing would be bound to at
tract criticism. It would also interfere with
various locallevel schemes that aim to re
duce traffic and emissions. Steve Gooding
of the
RAC
Foundation, a transport think
tank, likens dynamic road pricing to “
NHS
computerisation and the Trident nuclear
deterrent programme” rolled into one.
A flatrate system would be simpler and
clearer. This approach, whereby the tax is
based on overall mileage and assessed by
checking the odometer during a vehicle’s
annual checkup, was the most favoured
among respondents to our survey. Accord
ing to the Department for Transport, a total
of 300bn miles were driven by vehicles on
Britain’s roads in 2021. Assuming that a re
placement scheme for fuel duty would aim
to be revenueneutral, the average motor
ist would end up being charged around ten
pence for every mile.
Britain is not alone in finding road pric
ing easier to recommend than implement.
The Netherlands has had a commitment to
road pricing for 20 years, but it has been
caught up in political traffic; it hopes to in
troduce a simple form of the scheme by
2030. Given the political pitfalls, the Trea
sury is unlikely to do anything before the
next general election. Eventually, though,
it will have to hit the accelerator.
n
Dostları ilə paylaş: