Road pricing

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Road pricing is a term that refers to the charging for the use of streets and roads. This is usually done by charging motorists directly for their use. It can include tolls imposed by the owners of specific roads as well as charges imposed by (usually local) governments for the use of any roads within some defined zone.

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[edit] European application

Facing rising levels of congestion, European governments are giving serious consideration to nationwide road pricing schemes which would exploit the new Galileo satellite positioning system. Every vehicle would have to contain a satellite tracking device which would determine which roads were being driven along, for how far and at what time of day. This information would then be sent to a central computer system.

See Toll roads in Europe for details on all countries.

[edit] Germany

Schemes for charging trucks (lorries) in Germany by the company Toll Collect, and Austria are already underway. Under the German scheme, which went live on 1st January 2005, lorries pay between €0.09 and €0.14 per kilometre depending on their emission levels and number of axles. The expensive scheme, combining satellite technology with other technologies, suffered numerous delays before implementation, whilst a scheme using much simpler technology in Austria was up and running in 2004. In the UK, the Labour government announced in July 2005 that the proposed UK lorry road user charging scheme would not go ahead.

[edit] Italy

For some years, all Italian highways can be used on the base of a toll payment, also by electronic TELEPASS system.

[edit] UK

Durham became the first city in the UK to have a permanent congestion charge in 2002 [1]. London has had a Congestion Charge in the central area since 2003.

Various trials have taken place in British cities - the City of Cambridge in the United Kingdom, for example, had experimented with congestion charging as far back as 1993.[2]

Extensive studies are being done on introducing a scheme for all UK vehicles, with an aim to implementation at the earliest around 2013. In October 2005 the UK government suggested they explore "piggy-backing" road pricing on private sector technologies, such as pay-as-you-go insurance (also known as Pay As You Drive PAYD), thus avoiding a large-scale public sector procurement exercise. If introduced, this scheme would likely see a charge being levied per kilometre depending on the time of day, the road being driven along, and perhaps the type of vehicle. For example, a large car driving along the western section of the M25 in rush hour would pay a high charge; a small car driving along a rural lane would pay a much lower charge. The very highest charges would be likely in the most congested urban areas. It is expected that rural motorists would benefit the most from such a scheme, perhaps by paying less through road pricing than they do at present through petrol and car taxes, whereas urban motorists would pay much more than they presently do. However, this is highly dependent on whether such a scheme would be designed to be either revenue neutral or congestion neutral. A revenue neutral scheme would replace (at least in part) petrol and vehicle taxes, and would be such that Treasury revenue under the new scheme would equal the revenue from current taxes. A congestion neutral scheme would be designed so that growth in congestion levels would stop as a result of the new charges; the latter scheme would require significantly higher (and increasingly higher) charges than the revenue neutral scheme and so would be unpopular with the UK's 30 million motorists. The carbon emission consequence of moving from fuel duty to a charge per mile has been raised as a concern by some environmentalists, as has any diversionary response from heavily trafficked (and hence more expensive) roads. The UK government announced funding for road pricing research in 7 local areas in November 2005.

It should also be noted that the current government did not originally float the idea of road user pricing for all UK vehicles; the Conservative government was also studying the idea in the 1980s, though principally considering tolling to pay for the construction of motorways rather than to control congestion. Even back in the early 1960s, the Smeed Report considered how to implement congestion charging. Any governing party will generally find that congestion is unavoidable without some form of price restraint being applied in the future[citation needed].

[edit] Criticisms

Opposition to road pricing, when coming from the broad political left is largely directed at perceptions of fairness. By charging for something that was once "free" may be seen as unfair. Road pricing has the possibility of being a regressive tax, in that a flat-rate tax falls more heavily on poor drivers than the rich (the fuel tax, while moderately regressive, gives much more incentive to poor drivers than rich drivers to drive more fuel-efficient cars, thereby somewhat negating its regressive aspect). A way for the government to deflect this criticism would be to use the toll revenue to reduce other, equally regressive taxes. New toll roads in a largely free system may be seen as punishing one area when the rest of the system enjoys toll-free motoring. Proponents of pricing would counter the fairness or equity argument by stating that pricing creates a choice, and choices are fair because people are not identical, sometimes people have high values of time (e.g when they are late for an appointment), sometimes they have lower values of time (e.g. when they are enjoying the drive). The proponents would thus suggest that making all drivers pay the same tax to receive the same service isn't fair if people value the service differently. Another argument is that, while road pricing may be unfair to some road users, the alternative, ie. congestion is unfair to all road users, since it wastes everyone's resources. The ultimate fairness of road pricing is only determined once the use of any net revenues is taken into account.

Conservative critics such as Steven Norris, on the other hand, say that "free" roads produce positive externalities that outweigh the opportunity cost of congestion, ie. that road pricing reduces the overall number of journeys, thus harming business and economic growth. In particular, Steven Norris argues that the cost of the congestion charge disproportionately hits low paid workers whose working hours start at night when public transport is not available and end when the congestion period is in force, indirectly hitting London's service economy.

Motoring interest groups see road pricing as an additional financial burden on already allegedly over-taxed car owners. Many are not opposed to road tolls as such, but wish to see them as a replacement for fuel tax rather than an additional charge.

Some groups of libertarian inclination, such as the Association of British Drivers, criticize road pricing on the basis of individual rights. They argue that freedom of movement is a fundamental right that should not be infringed through financial barriers, and sometimes compare the practice to highwaymen. Note that some libertarians in general, however, favour transferral of roads into private ownership, which is likely to result in tolls for individual roads, set on a profit-maximising rather than an economic welfare-maximising basis, which in many cases is likely to lead to a higher toll.

Others see proposed schemes, such as PAYD based upon a compulsory GPS tracking system, as an infringement on their rights to privacy, and fear that such a vast surveilance system may be abused.

The general public appears to have concerns about the proposed introduction of road pricing in the UK. A recent online petition against road pricing, hosted by the British government, attracted over 1.8 million signatures, equivalent to 6% of the entire driving population. Over 150,000 signatures were added during the last day before the petition closed on the 20th Feburay, 2007. Also, in a recent BBC poll, 74% of those questioned opposed road pricing. In reply, the Prime Minister has e-mailed the petitioners outlining his rationale, and has promised 'debate' prior to a decision being taken whether to introduce a national scheme.

[edit] See also

[edit] External links

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