CBI calls for road charging and independent regulator to run England's major roads

Business organisation says proportion of taxation raised from motorists should be diverted to road charging

by Simon_MacMichael   October 8, 2012  

Highways Agency Network Map

The Confederation of British Industry (CBI) says that road charging should be introduced on the strategic road network in England, comprising motorways and major A roads. It also says that responsibility for the network’s budget should be taken away from the Department for Transport (DfT) and given to an independent regulator.

According to proposals from the CBI contained in a report called 'Bold Thinking' which it says is exactly what is needed to address the congestion  it claims is costing the economy billions of pounds each year and stifling the economic recovery, a proportion of taxes raised from motorists through fuel duty and vehicle excise duty should be converted to a ‘user charge’ which would allow them to access major roads.

Private operators, acting under license from the CBI’s proposed regulator, would look after regional parts of the road network, but the employers’ organisation adds that in the long-term, additional investment would be required to fund major projects – and that could mean operators not only having to arrange long-term borrowing, but also the introduction of toll roads in some places to help pay for the works.

According to the CBI, the measures are needed because of what it says is a £10 billion hole in Highways Agency funding, as well as the prospect of the level of taxes raised from motorists going into decline as vehicles become more fuel-efficient.

According to the CBI, congestion costs the British economy £8 billion a year and it believes that figure could rise to £22 billion by 2025.

CBI director-general John Cridland commented: "Every day, people up and down the UK lose time and money because of our clogged-up roads. Gridlock is an all-too-familiar tale of life in the UK, and one that is already costing us £8 billion a year.

"With public spending checked, the case for new funding solutions is even more compelling, and the Government recognises this. Infrastructure matters to business, and delivering upgrades to our networks is one of the highest priorities for the CBI to get the economy moving again.

"It's clear we need a gear change in how we manage and pay for our road network in the 21st century. A lack of investment means we are really struggling to increase road capacity, let alone adequately maintain what we already have."

The proposals are likely to provoke controversy since they would involve specifically ring-fencing at least a proportion of taxation related to motoring to pay for roads – something that Sir Winston Churchill, as Chancellor of the Exchequer during the 1930s, campaigned against.

As outlined on the I Pay Road Tax website, Churchill described as “nonsense” the notion that “motorists are to be privileged for all time to have the whole yield of the tax on motors devoted to roads.”

ipayroadtax.com/no-such-thing-as-road-tax/bring-back-the-road-fund/

Ultimately, his and others’ opposition led to the abolition of the Road Fund in 1937, but even before that, revenue raised from drivers only paid for a fraction of building and maintaining the road network, which since then has been paid for out of general taxation, with money raised through vehicle excise duty and fuel duty also going into a central pot.
 

8 user comments

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CBI calls for road charging? [rolls eyes]

This plan would not reduce congestion, would introduce hypothecation and increase hostility between payers of VED/fuel duty and those who do not.

If the CBI were serious about reducing congestion then they would suggest things such as moving the major of freight transportation back on to the railways and eradicating car usage on journeys less than 5 miles.

What their current suggestion comes down to is trying to price people off the roads (theres already a good job being done of that with the trains) and privatisation of all road services.

posted by zanf [418 posts]
8th October 2012 - 10:11

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The thing is, the funding methods we have for investing in the road network at present are utterly insufficient. Budgest are routinely cut in a bid to reduce costs, ignoring the fact that reducing maintenance in the short term leads to longer terms spikes in road repair bills. Road user charging may be unpalatable, but it is the only way we can have a road network of the sort we need. Anyone with sense should be able to appreciate that using bicycles for short distance journeys actually reduces vehicle congestion, and causes such a minimal quantity of road wear as to be neglible.

OldRidgeback

posted by OldRidgeback [2114 posts]
8th October 2012 - 10:27

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I saw a really good technical paper about road pricing a little while ago - will try and dig it out.

Road pricing, done properly, is really the only workable answer. Matrix of pricing based on distance driven, type of road, time of day, type of car. So a gas guzzling 4x4 on the 2 mile school run gets hammered. A fuel-efficient car doing 200 miles at night on motorways pays peanuts.

And that type of taxation HAS to be hypothecated because you have to show that motorists are "getting something back". even if that money raised is put into public transport to provide an alternative to the car.

posted by crazy-legs [477 posts]
8th October 2012 - 11:20

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Car use is too cheap and convenient for short journeys (city commuting, shopping, school runs, etc.) leading to congestion.

Peak hour road charging in urban areas would be a disincentive that should encourage more walking, cycling and public transport usage.

Most urban areas have traffic signals sequenced at around 15 mph average traffic flow. Cycling is a quick as driving but most drivers are happy to sit trancelike in queues inching forward slowly.

posted by Campag_10 [153 posts]
8th October 2012 - 11:48

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Cue the "Get off the roads, we pay for them!" rants to increase ever further.

If I could have, say, 6 bikes, would it stop me drooling over others that I don't have?

posted by notfastenough [2890 posts]
8th October 2012 - 11:49

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crazy-legs wrote:
I saw a really good technical paper about road pricing a little while ago - will try and dig it out.

Road pricing, done properly, is really the only workable answer. Matrix of pricing based on distance driven, type of road, time of day, type of car. So a gas guzzling 4x4 on the 2 mile school run gets hammered. A fuel-efficient car doing 200 miles at night on motorways pays peanuts.

And that type of taxation HAS to be hypothecated because you have to show that motorists are "getting something back". even if that money raised is put into public transport to provide an alternative to the car.

Yes indeed, and what I've been saying all along. Road pricing should be affected by factors including the size, power output and weight of the vehicle (as this corresponds to the quantity of CO2 emissions and road wear it causes), the time of day of the journey and the route used. Congested routes will be charged highest.

The technology is available to do this already, although the system would be fairly costly at present. We can expect the expense to fall significantly and make it cost-effective in 5 years though.

At present low mileage drivers and country drivers subsidise those who use their vehicles most and the present system is unfair. Increased fuel taxation is not an option as the long term forecast for fuel consumption predicts a downward trend. Vehicle numbers are expected to rise significantly and as they become more fuel efficient, so taxation will become less and less ineffective.

Congestion charging, as in Durham and London, is a short term fix only.

Any new system will have to be designed intelligently and there is the expertise to do this. However, it will also have to be effectively revenue neutral. This has been the problem over previous attempts at introducing road pricing. The Chancellor of the Exchequer (of whichever party) has a tendency to ensure any new taxes will result in increased income for the government. As road pricing will be such a massively controversial issue (cue moans about how 'Our taxes paid for these roads') it will have to be seen to be more fair than the existing system. Given HM Government's record on screwing things up (again, of whichever party), we can expect any new system to be unfair, more costly and full of major errors.

OldRidgeback

posted by OldRidgeback [2114 posts]
8th October 2012 - 14:36

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I realise this might be borderline heresy, but really, the network shown really should be entirely blue- with a high quality cycle route roughly paralleling it.

posted by Al__S [480 posts]
9th October 2012 - 14:28

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We have a mechanism for Pay as you go driving now, called fuel duty.

If you drive a big gasguzzler, you pay more.
If you tank along the motorway at 90, you pay more than someone doing 60.
If you are sat in a traffic jam at 5mph, you use more fuel and pay more.

Fairest simplest system we have. Don't see why we need to change. And it works, as prices have gone up, people are starting to change habits, and run more efficient cars, and drive more carefully and less often.

posted by gazza_d [178 posts]
9th October 2012 - 19:05

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