Reports:
Paying for road use
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Chair's Foreword
Vice Chair's Foreword
Chapter 1: Fairer, smarter and more efficient
Chapter 2: The way we pay now
Chapter 3: The problem of congestion
Chapter 4: The benefits of congestion relief
Urban areas
Motorways and trunk roads
Rural
Freight
Environmental benefits
Social inclusion
Conclusions
Recommendations for further work
Annex 1: Steering Group members
Annex 2: Modelling approach
Annex 3: Consistency with current charging policy
Chair's Foreword
A road traffic solution that reduces traffic, significantly cuts congestion nationally and delivers shorter and more reliable journey times without any increase in overall motoring taxation sounds like a dream for Britain's road users.
But when you learn that such a solution will become possible in the not too distant future and that it would offer major cost savings to some users, cut pollution and bring benefits to the economy, to bus passengers and to the road haulage industry you realise its development needs serious consideration.
These are the conclusions that we reached after examining what could be achieved by re-focussing the way in which we currently pay for using the roads, moving away from taxation by introducing a system of charging to drive in congested conditions. In this instance, without increasing overall what road users pay. Such a move, however, could only happen once the public transport improvements promised in the Government's 10- Year Plan have been delivered.
There is a wide range of views on the cost of motoring, some saying we pay too much, others that we pay too little. This study shows that, whatever the level of motoring taxation, there is a strong case for reviewing the way we pay for road use, with more focus on payments which reflect the impact road use has on congestion and on the environment.
While the Government's 10-Year Plan is absolutely essential to delivering improved transport facilities and services that will widen the transport choice, the preferred choice for travel for most journeys will remain the car.
Current motoring taxation is a very blunt instrument which often penalises those who can least afford it and those who have to rely on a car because of poor or non-existent public transport alternatives.
Our starting point was that doing nothing was not an option - congestion could only worsen, eventually frustrating our ability to reach too many destinations by road without unacceptable queuing.
For many years, nations across the world have struggled with the growing demands of the car and the congestion it causes. Some countries have coped better than others - they are often the ones which are less densely populated or which have invested heavily in transport infrastructure and have pursued successful land use planning policies which have limited the growth in the demand for travel.
Sadly, the UK has lagged behind the rest of Europe for generations as CfIT's recent report on European transport comparisons identified. The 10-Year Transport Plan is, therefore, an important step in the right direction.
The problems on our roads are brought into focus by the fact that we are a densely populated island, have some of the most heavily used roads, the worst congestion and use our cars for a higher percentage of journeys than other European countries.
The motoring taxation system has not changed fundamentally since the early days of the car when it was the preserve of the few. Our work shows how much congestion is influenced by the way we currently pay to travel.
The result is that people only think about the cost of motoring when they fill up at the pump.
This helps explain why we are using our cars more, driving them further, using them for journeys where we used to walk or to cycle and even making journeys that we would never have considered making at all just a few years ago.
We commute further to work now, shop at out of town shopping centres, take our children to school by car and use our vehicles to pop down to the corner shop. And with the real cost of motoring forecast to fall (by 20% over the next 10 years) the reality is that without radical action we will continue to grow more dependent on the car for the foreseeable future.
Towns and cities would become gridlocked, children less fit and our cities would become progressively more uncomfortable and less people friendly.
But it does not have to be like that. The implementation of the Government's 10-Year Plan will put in place the many building blocks which have to precede changes to the way we pay for road use.
The concept of paying for what we consume and when we consume it is one of the fundamentals of economics. It is applied in every other public utility and in other forms of transport.
Obvious examples are that we have to pay more to make a telephone call at busy times of the day. Electricity is cheaper to buy at night than during the day.
On planes, trains and ferries it has long been automatic for passengers to pay according to when and how they want to travel. Why should roads be different - particularly when the current methods of payment contribute to the problem rather than the solution. Indeed, the Government is currently in the process of consulting on a new way of taxing the road haulage industry related to its use of the road network. The Government states as one of its objectives that road users should contribute towards the true costs that they impose on society. It proposes, in its lorry consultation, that the best way to deliver this (for lorries) is to introduce a lorry road user charge alongside reductions in other taxes levied on operators. CfIT has extended this concept to all road users.
So what are our proposals? We asked economists and transport planners at NERA and Oscar Faber to model different alternatives to current motoring taxes without increasing the overall cost to motorists.
The results have been staggering. By shifting part of the burden from taxation to a system of charges we have identified a concept with the potential to deliver significant congestion reduction benefits for a large proportion of road users, without increasing the overall cost we pay to drive. Overall the work suggests that congestion could be cut by 44%. That adds up to a reduction in congestion that is equivalent to 25,000 years per annum.
What people must realise, however, is that cutting congestion by 44% overall does not mean that that amount of traffic on the network would simply vanish. We have used the same measure of congestion as the Government used for its 10-Year Plan. However it is acknowledged that this measure does not reflect well the sorts of change that would be experienced by road users. What our results do show is that traffic levels would fall overall by about 5% and speeds would increase on average by about 3%, with greater impacts in areas suffering the worst congestion. The incidence of gridlock would also be expected to reduce significantly and reliability would improve.
For rural drivers, other motorists whose annual mileage is low (such as many pensioners) and those that have some choice about when they drive there is the prospect of a significant reduction in motoring costs.
The road haulage industry would get tremendous benefits as journey times become shorter and more predictable - considerably reducing the waiting time now essential to guarantee just in time deliveries. The economy as a whole would benefit as time now wasted in queues would be spent more productively.
Our concept is dependent on a nationwide Global Positioning System with smartcard-charged units located in every vehicle. They would be able to detect where and when a vehicle was entering one of our busier roads subjected to part time charging and deduct the appropriate fee.
With most roads having no charges at all and others a fee based on the amount of congestion, motorists will be able to choose between individual journeys that are either cheaper or shorter than today. The flexibility of this system would put motorists back in control of their journeys and the price they would pay for using our roads.
This report will be the start of a long and sometimes controversial debate but we need to think seriously about the sort of transport system and lifestyles we want for the future.
We have a stark choice. We can either introduce an effective price mechanism to be used in conjunction with traffic management, targeted investment and marketing of public transport, or we will be stuck with the problem of congestion - which is set to get even worse in the long run.
Already in early discussions with the CBI, the Freight Transport Association and the RAC Foundation we have identified an interest in change. We must be open-minded and objective, but CfIT is convinced that the debate must begin.
Vice Chair's Foreword
Driving on our congested road network has become an increasingly frustrating experience for motorists. The high fuel taxes we pay are a deterrent to drivers but they apply to drivers on all roads at all times, congested or not.
The reality is that we are all driving further and relying on the car for the shorter journeys where we once walked, cycled or used not to make at all. This has created a situation where we now have the most congested roads in Europe.
Motoring does not have to be like that. Congestion can be reduced, journey times can be shortened and become more certain and the whole driving experience can become more enjoyable again.
We do not need a massive road building programme to achieve it or any increase whatsoever in the overall level of motoring taxation. We simply need a radical rethink in the way we structure motoring taxes, to take some lessons from other public utilities and to make use of developments in technology.
Motorists across the UK are united on a range of issues - notably that roads are too congested and that their motoring taxes are not sufficiently targeted on making driving conditions better. Letting congestion grow and spread is the only truly anti-motorist policy.
Our radical rethink of the way part of our motoring taxation is structured could resolve both issues. Research shows that focussing charges on the heaviest used roads at the busiest times could reduce traffic congestion nationally by 44%.
Imagine having more certainty that a three-hour motorway journey could actually take three hours rather than perhaps up to five, or a daily commute where you can phone ahead and say confidently "I'll be home in 20 minutes."
As for what we pay, our model allows many motorists to take a choice on the price they pay. Take an uncongested road or travel at a non-peak time and your motoring costs will fall substantially. Payment could be linked to the road operator having to provide for better road conditions.
If you have to travel at peak times on the busiest roads you may well be spending more, but on consideration you will see that your journey times will be shorter, more assured and less stressful.
It is certainly a lot fairer than the current tax regime which applies equally - irrespective of whether they are a retired couple on a quiet afternoon's drive to a friend in the country or a businessman going to work on one of the busiest commuter routes at peak time.
This is early work. It has a long way to go - but I have yet to see any alternative solution across the world that has the potential to bring so many direct benefits to road users without any overall increase in what motorists would pay.
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"Reducing the multi-billion pound cost of road congestion is a top business priority. Making the way we all pay for road use fairer has to be part of the solution but the policy and practical implications are complex, as recent experience in London shows. Government should therefore promote an early and coherent debate on paying for road use to ensure the issues are properly considered."
Digby Jones, Director General, CBI.
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"The RAC Foundation believes that in the future motorists will accept a road pricing system if they perceive it brings benefits such as extra investment in roads and public transport and a reduction in other motoring taxes and congestion. We need to start planning for the future now as changes in transport policy and planning take so long to come to fruition."
Edmund King, Director, RAC Foundation.
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"Growing congestion on our roads and railways means unreliability for business transport, harming our competitiveness with increased costs and our environment with increased pollution. The Government's 10-Year Plan is designed to deliver better reliability but it will not solve all the problems. Especially on the roads where there will soon be a pressing need to manage demand. Already we need to encourage more use at night when roads are quieter.
There are two other developments that are relevant. First, the rapid increase in the use of sophisticated high technology communications on trucks in the UK, and second, the growing use of non UK registered trucks on our roads using their own, low taxed diesel fuel. These give both the means and the need to review how trucks and ultimately all vehicles are charged for the use of UK roads. Charging vehicles more for the use they make of congested roads, and encouraging trucks to keep to trunk roads and motorways, is better than crude vehicle and fuel taxes. Providing we always remember that charges will only change what people do if they have an appropriate and attractive alternative.
This CfIT report examines the whole area and is a welcome independent review of what could be possible. Coming at the same time that the Treasury is consulting on a thorough review of lorry taxes in a similar vein, it is most welcome. As is the Treasury's commitment that this approach will not be used to increase lorry taxation but to make it fairer and help to balance out the low taxed competition from visiting foreign operators."
Richard Turner, Chief Executive, Freight Transport Association.
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