Road tax proposal based on distance, vehicle weight and emissions wins £250,000 Wolfson economics prize

A scheme in which road tax would operate on a sliding scale depending on emissions, mileage and vehicle weight has won a £250,000 prize.

Graduate transport planner Gergely Raccuja, 27, has won the 2017 Wolfson Economics Prize, which asked for proposals for funding better, safer roads in a fair way while benefitting the economy and the environment.

He explained that with the expected increase in uptake of electric vehicles, the Treasury’s annual £27bn income from fuel duty would need to be found from other sources.

He advocates a pay-per-mile system, with higher charges for heavier and polluting vehicles.

He said that 20 per cent of the revenue should be directly spent on road repair, solving the UK’s pot hole problem.

The charge would be collected by insurers, based on mileage and model, potentially monthly using telematics or as an annual charge.

Lord Simon Wolfson, said it was a “groundbreaking, yet simple” solution.

Raccuja told the Guardian: “The key to our entry was to keep things simple, yet come up with an answer that was sophisticated enough to deal with an upheaval in cars and road transport which hasn’t been seen since the introduction of the motor car well over a century ago. I hope I can persuade our politicians too that everything to do with our roads could be better.”

Steve Gooding, the director of the RAC Foundation, which provided input to Raccuja’s final submission, said the clock was ticking for policymakers as existing models of tax and spending on roads faced becoming redundant: “The common themes of several entries have been both the pressing need for change and the belief there is a better option to balance what drivers contribute to the finances of the country and what they get in return.”

Simon Wolfson, said it was a “groundbreaking, yet simple” solution. Raccuja beat competition including a proposal for tradeable road miles from the economist Deirdre King and her husband Edmund, head of the AA motoring organisation. Other shortlisted entries suggested rewarding people for changing their driving habits to beat congestion, and using different technologies to impose variable charges for journeys.

Raccuja said: “The key to our entry was to keep things simple, yet come up with an answer that was sophisticated enough to deal with an upheaval in cars and road transport which hasn’t been seen since the introduction of the motor car well over a century ago. I hope I can persuade our politicians too that everything to do with our roads could be better.”

Steve Gooding, the director of the RAC Foundation, which provided input to Raccuja’s final submission, said the clock was ticking for policymakers as existing models of tax and spending on roads faced becoming redundant: “The common themes of several entries have been both the pressing need for change and the belief there is a better option to balance what drivers contribute to the finances of the country and what they get in return.”

Earlier this month we reported how a £5bn cycling infrastructure fund was proposed by the president of the AA, Edmund King, and his wife Deirdre, who is a former economist at the British Road Federation, as an alternative entry for the prize.

Sponsored by Lord Simon Wolfson, CEO of Next plc, and run in partnership with the Policy Exchange think tank, the prize has previously run in 2012 and 2014.

In 2012 it invited proposals on how the Eurozone could be safely dismantled, while the 2014 prize asked the question “How would you deliver a new Garden City which is visionary, economically viable, and popular?”

The question asked this time around was: "How can we pay for better, safer, more reliable roads in a way that is fair to road users and good for the economy and the environment?”

Speaking about their submission, Edmund King said: “I think the biggest problem with the road network is congestion, environmental issues, and also the way we pay for it. We need a new, radical system to pay for roads, but also to improve our roads.”

The proposal is built around the concept of Road Miles. “We set up a system where every driver in the UK gets at least 3,000 road miles free – so it’s free access to the road network – but then after that, there is then a small charge.”