Toll roads, but it's not road pricing

The Government are reluctant to do anything that is seen as unpopular when it comes to roads. There is an old saying in politics; 'Never get involved with parking or dogs' as it divides the nation pretty equally.

When governments say that they want to reduce congestion everyone agrees,  but disagree violently on how to do it.

Some want more and wider roads. This upsets the environmental lobby as it encourages more cars to use the now clearer roads (and usually just causes worse problems somewhere else on the system).

Some want greater restrictions on driving, such as road pricing, which makes drivers pay for the roads they use according to the time of day and level of congestion. This was simply hinted at in 2007 and caused nearly two million to sign a petition opposing a policy that was yet to be proposed by any party.

A compromise that might be more acceptable is to charge tolls on new roads. Most people seem to back the idea of not raising taxes further and so this is the only way to build new roads.

But is this an integrated transport policy? A series of tolled and non-tolled roads might not work at all. Drivers may cram on to the non-tolled roads to avoid the charge causing even worse congestion in areas not designed for heavy traffic.

The M6 toll road (the Birmingham Northern Relief Road) is a case in point. Opened in 2004 the latest figures show it carrying just 39,000 vehicles a day, almost half the predicted 74,000 a day when it was planned. The rest continue to battle each other for space on the congested M6 to the south.

Toll roads may be a convenient way of avoiding the problems of fiscal policy faced by the UK at present, but it lacks the broader and deeper thinking required to meet the challenge of the 21st Century.

The BBC report the toll road policy here

Road pricing 'inevitable'

Ever since I started teaching Transport Economics in 1995 road pricing has seen to be 'about 10 years away'. It is a sensible move that will allow better management of the road space we have, allow the economy to function more efficiently and help reduce greenhouse gas emissions. So its still '10 years away'.

Now Transport Minister Normal Baker says it is inevitable. Not for environmental reasons, but because the move away from carbon based fuels will reduce government revenue from excise duties on fuel! The government can't afford that.

As a consequence the road fund licence (the tax disc) will also be scrapped and people will find themselves charged according to the distance travelled, via GPS technology. Hopefully there will be a scheme that charges 'by the time of day and level of congestion' rather than simple tolls.  

The details of Minister Baker's ideas and some commentary is in the Sunday Express. Who would have thought we would ever look there?

The Express article is here

Workplace parking tax in Nottingham

Nottingham is introducing a tax on workplace parking if a firm has more than ten parking places for employees. The aim is to provide a further disincentive to using private transport and reduce congestion.

The fee for a parking place is £288 a year and employers can pay it or charge their employees. Presumably if the employer pays the fee then employees will need to declare it as a 'benefit in kind' for tax.

Will £288 be enough to reduce congestion very much? Well probably not. But the scheme should raise £14 million and that is going to fund two new tram lines and provide a cheap and efficient improvement to public transport.

Trams are incredibly cheap to provide compared to other types of public infrastructure and if they have good routes will be very fast (but not if they head down crowded streets and compete with cars of course). They are also very environmentally friendly and fit into a sustainable transport policy very well.

We know from places like Singapore that congestion policy needs a series of supporting measures. This increases the effectiveness of each (making the cross price elasticity of demand more elastic). So Nottingham are also introducing parking restrictions to avoid people avoiding the charge by parking on the street. With the investment in trams they are probably doing all a local authority can.

Many people object to this move but it really does seem to be a policy informed by our understanding of transport economics.

Local coverage of the policy is here

Road privatisation - is this the death of sensible road pricing as an option?

The Prime Minister announced that there is to be a consultation on putting the road network, at least partially, into private ownership.

This move has many implications and Transport Economics will be changed forever.

The Independent article raises most of the important issues. How will the roads be 'privatised', will the same mistakes be made as in past privatisations? Has PFI ever really worked? Will this scheme bring the investment the roads need?

But there are two issues I need to highlight.

The report suggests the cost of congestion is £7bn a year. I know this was estimated at £15bn in 1990, so this seems far too low a figure. I have asked for information on the source of The Independent's figure, but the difference seems to me to be so massive that it would change the result of any Cost-Benefit Analysis.

The issue that really bothers me about this plan is that it effectively abandons any thought of a national road pricing scheme. Such a scheme, where charges vary according to the time of day and level of congestion and co-ordinated on a national basis, holds the answer to the road problem.

Road pricing will pass on external costs, reduce road use and encourage alternative modes of transport. Such a scheme uses all the principles of charging that economists know can lead to an optimal outcome and a sustainable transport policy.

Can you imagine a road network with a mixture of public and private roads, a variety of tolls and SatNav's that direct traffic down the cheapest route, which will probably be past a school or old peoples home? Let's not even start on what happens when firms and investors walk away from their franchises!

Vital reading for Grecians, but important for everyone.

The Independent article is here