Cut congestion give everyone £1500 share in UK's Motorways and A-roads says think tank

While there at it they'll abolish Vehicle Excise Duty too – sounds like a cunning plan…

by Tony Farrelly   April 12, 2010  

Traffic Jam in Croydon Pic: Chris McKenna

Abolishing Vehicle Excise Duty, and giving the UK's strategic road network (SRN) to every citizen of the UK in the form of tradable shares is the Social Market Foundation's recipe for cutting congestion on UK roads and easing pollution too in its latest report – Roads to Recovery.

The Social Market Foundation is a long time advocate of road pricing, rather than building more roads, as the best way of cutting congestion, currently estimated to cost the UK economy £20Bn per year. But, as the report recognises, aside from the London Congestion Charge (hardly popular in all quarters) any attempt to introduce congestion charging in to the UK has always been met with fierce opposition from those who simply see it as another opportunity by government to tax motorists with the money simply disappearing in to the Treasury's coffers.

To overcome this resistance the report, by Ian Mulheirn and David Furness, suggests:

• giving each UK citizen a tradable share (“voucher mutualisation” in economic geek-speak) in the Strategic Road Network (Motorways and major A-roads) which they value at £95Bn,

• abolishing Vehicle Excise Duty (more commonly known as car tax)

• road pricing introduced on SRN roads at a rate of 10p/mile.

Us citizens would then have the choice of selling the shares valued at £1500 each and taking the money or holding on to our shares and taking a share of the proceeds of the tolls raised minus the costs of maintaining the road network. Using transport survey data the reports authors estimate that the average motorist would be £75 per year better off than they currently are under the system of paying VED even those heavy road users that paid more would get the advantage of less congested roads.

However the report doesn't address a number of issues:

• voucher mutualisation is something of a one-shot deal – a country's citizenry is constantly changing, so how do new citizens get shares?

• the reports authors are also clear that simply privatising the strategic road network would not be desirable –  big business being in charge of the roads would be even less popular than the government being in charge and nor could the market be relied upon to make the necessary investments strategic investments in maintaining the road network and yet inevitably a large number, if not the majority of the shares would be bought up by by big business - how many financially pressed households are likely to hold out against the promise of £3000 for nothing – particularly if they don't own a car? The report itself cites examples of this happening with similar undertakings in Eastern Europe and Russia. If charging for the strategic road network was to come under the control of the market that flat rate charge wouldn't last long…

• the report is unclear as to whether the suggested 10p per mile charge is a flat rate for all, or whether there would be a sliding scale of charges dependant on the type of vehicle ? Would HGVs, buses and coaches pay more – for the greater damage they do to roads or would the economic benefits we all gain from them be offset against the charge?

• last but not least, what about us cyclists? Obviously we're not allowed on the motorways, but cycling is permitted on most A-roads, would we be charged too – the report doesn't say?