IN THEORY, the case for road pricing is unanswerable. Motoring taxes should be scrapped and replaced by tolls. The economic credentials for this are pristine. Paying for use encourages husbandry and efficiency in the consumer/motorist. It prompts the provider/road operator to improve the offering, as well as providing an income stream which can be used to help access the capital markets (thus relieving the taxpayer). Investment would flow where demand beckoned, rather than according to the whim of pork-barrel politicians.
Likewise, any move to encourage motorists to think seriously about whether they really need to drive should please environmentalists. And road pricing fits a socialist agenda too. Motoring is not like healthcare or education, that needs to be provided free at the point of delivery. We pay for trains, planes and phones. Why should poor grannies who rarely use the motorways subsidise rich businessmen and hauliers who do?
Overall, the cost of motoring should fall as the inherent efficiencies from road pricing take hold, providing a welcome boost to both the economy and the environment.
Pay-as-you-go road use, usually in the form of motorway tolls, is ubiquitous in countries from France to South Africa – not places usually associated with free market economics.
So why has it proved so difficult to introduce it in Britain?
This month two ideas have been put forward to promote road pricing here. The Institute of Economic Affairs suggested the classic privatisation model, saying that this would raise £150bn and promote efficiency.
But the government has ruled out tolls on existing roads and instead suggests variable road tax according to whether motorists use motorways and A roads or not.
On the face of it this latter scheme seems absurdly unwieldy. Enforcement cameras would catch those using motorways without having paid the fuller rate – surely a recipe for confusion, antagonism and expense. Let us hope the Department of Transport is just flying a kite in order to make more sensible options seem palatable.
But the government’s approach points to the real problem here, which is one of public perception. The idea of road tolling is intensely unpopular. When Tony Blair floated it his new Downing Street comment board was inundated with protest and he dropped it like a hot stone.
Similarly Edinburgh attempt to introduce a congestion charge was heavily defeated in a referendum. The council tried to sell it by linking the charge to better public transport. Understandably voters were unconvinced, and their wisdom has been justified by the scandal of the city’s tram project.
The public, then, think that road tolls are a devious attempt by government to raise extra tax, akin to the excessive parking charges we experience on visiting the local hospital.
Nonetheless it would not be enough, as the IEA suggests, to offer a straight swap between motoring taxes and tolls. People dislike the idea of paying for roads. Partly this is the old problem of withdrawing a benefit from those who have got used to it. But there is also a deep element of mistrust involved towards those who would collect the tolls, whether government or private company.
As I have tried to argue elsewhere in these pages, the record of the privatised ‘network’ companies – electricity and gas utilities, the railways – has been good, certainly better than their nationalised predecessors. But this has not stopped these companies from becoming deeply unpopular. The prevailing sense is that they must be ripping us off because we have no choice but to use them.
Put it this way. Imagine that the government suggested re-privatising Network Rail. Or that the Scottish Government decided to privatise Scottish Water and Caledonian MacBrayne. The outcry would be muted compared to an auction of our motorways, with everyone from Halliburton to Richard Branson and the Chinese state investment bank bidding to get their fingers in the pie.
The example of the London congestion charge, however, offers cause for hope. Ken Livingstone promised to introduce it as an upfront part of his mayoral election campaign in 2000. The model is clunky. Revenues, collected by a private company, are supposed to finance rather vague public transport projects. But it has won public acceptance, partly because of the clear need to tackle congestion, but mainly because the policy won a mandate on the back of a wider election campaign. It could well have been defeated in a stand-alone referendum, and would probably have been resented if introduced out of the blue mid-term.
The answer, then, is for a party to trail road pricing well before a general election, taking the time to explain the trade-off with motoring taxes.
More than this, the agencies running the roads should neither be government owned, nor orthodox public limited companies. It has to be clear that the money raised form tolls will not be used to fill government coffers nor ‘syphoned off’ to distant shareholders, but used purely for maintenance and investment in the road network.
This is an opportunity for us to design a new form of corporate entity that combines public participation and accountability with independence from the state. We can draw on historic models such as trusts, co-ops or mutuals, as well as more modern conceptions such as public interest companies or citizen shareholdings.
It might be an idea to pilot two or three different governance models. Certainly the road network should be split to encourage choice and competition not just against other modes of transport, but against other road operators. In Scotland, for example, the M8 could be run separately from the M9/A80, the M90 from the A92 and the A7 from the A68 and A1.
Politicians of all stripes have been quick to condemn the ‘predatory capitalism’ supposedly exposed by the financial crisis. But no one has put forward coherent proposals for an alternative. Scotland is replete with institutions that need to separated from the state and made much more accountable to the public, users and investors – not just Scottish Water and the ferries, but schools and hospitals too. The roads could be a good place to start.