The Treasury has, reportedly, been considering the possibility of introducing pay-as-you-go road pricing to replace the revenue which will be lost from fuel duty as the UK transitions to electric cars.
This isn’t particularly surprising, and similar ideas have been floated for many years. But, obviously, now that we are commited to phasing out petrol and diesel vehicles, it’s become a much more pressing issue.
As a general principle, I don’t object to this. I think that the idea of road users being taxed according to their usage of the roads makes sense, and usage payments have the potential to be fairer than fuel duty. But there are couple of important caveats.
The first is that it has to be more nuanced than a simple per-mile charge. Charging by distance discriminates against rural users, who often have no choice but to use cars and have to drive them over longer distances. And rural users of uncongested roads are contributing significantly less to air pollution and accident statistics. These facts need to be reflected in the charging regime. Someone driving ten miles from a rual village to their nearest town should not pay more than someone driving five miles to work in a major city.
The second is that any scheme should encourage both the government and road users to keep roads flowing freely. And this is more complex than it sounds.
One often-floated suggestion for road pricing is that people should be charged more for driving on roads that are more congested. There is some logic to this, because it would tend to encourage people to spread out their journeys and make them at less busy times. But, on the other hand, it would create a perverse incentive for the government to artificially inflate road pricing revenue by starving the transport network of funding and forcing more and more people to use congested roads. And it would also unfairly discriminate against people who find themselves in a traffic jam through no fault of their own – for example, when a road is blocked by an accident or roadworks.
A successful, and politically acceptable, road pricing scheme, therefore, needs to be contstructed in such a way that both road users and the Treasury benefit most from well-maintained, free-flowing roads.
That’s harder than it sounds, and there will inevitably need to be some compromises along the way. But working out this detail is important if this proposal isn’t to end up a political millstone for whichever future government implements it.