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Five key decisions facing the next generation of road pricing

By Nicholas Sanderson,
Cyclists in residential London
Group of cyclists in central London

The first Street Talk of 2018 put the issue of pay-per-mile road pricing to a panel of experts. Nicholas Sanderson sums up the choices city leaders will need to make in order to roll out road pricing.

London’s Congestion Charge turns 15 this year. Its immediate impact was of fewer vehicles, less congestion, better air quality and reduced carbon emissions. It kick started the rapid rise of cycling that London has witnessed over the last decade, and in parallel, it enabled a major increase and improvement in London's big red buses. At the time it was opposed by the main contendors for Ken Livingstone's first run at the Mayoralty and the media. Looking back it's hard to imagine London without it.

15 years on and New York City is re-considering its own version, while Stockholm, Gothenburg and Milan already have theirs. In Singapore, meanwhile, a congestion scheme of some sort has been around since the mid-1970s, and they have had more dynamic road pricing since 1998. Both Vancouver and Portland are now considering something similar.

Transport Secretary, Chris Grayling, is considering a pay-per-mile charge for lorries and Sadiq Khan’s draft Transport Strategy considers developing a new form of pay per mile road pricing – one that takes into account distance as well as weight, carbon and air pollutant emissions. This form of road pricing is advocated for by a cross-party committee of London politicians as well as the Centre for London’s independent commission.

It seems that cities around the world are grappling with how to manage traffic, whether for pollution reasons or to better deal with congestion. Last month’s Street Talks event sought to discuss the issue with a broad panel of experts and experience. Here are five takeaway thoughts facing a pay-per-mile road pricing scheme that stood out from that discussion.

1. What is road pricing for? 

The first, obvious point of distinction comes with major ramifications – the choice of objectives for any scheme. If you want to tackle congestion and encourage sustainable alternatives for travel, you won’t have a reliable revenue stream. A scheme designed as a reliable revenue stream from motoring would be very different to one that seeks to reduce motoring. What might be attractive to the Chancellor is unattractive to Britain’s Mayors and council leaders grappling with congestion and air pollution.

The Wolfson Prize brief, which our speaker Gergely Raccuja’s ‘Miles Better’ proposal responded to, asked for sustainable revenue generation. But as Joe Irvin set out early on, our problem is one of rising traffic volumes, air pollution and declining physical activity. Road pricing needs to encourage and support the shift to alternatives to the car, including public transport, walking and cycling as the Congestion Charge did before.

The ‘Miles Better’ proposal could provide a technological and institutional platform on which local road pricing schemes could be built around. It shows that, politics aside, a scheme is technically possible, if ministers decided what it was for.

2. Are the alternatives to a car good enough? 

What was particularly clear from across the panel was that a charge aimed at deterring car use wouldn’t work, nor be politically acceptable, without viable alternatives for everyday travel. Central London benefits from excellent public transport relative to the rest of London and other parts of the UK. Here, the congestion charge saw a major increase and improvements in buses. The number of people entering the zone by bus very quickly increased by 37%. Years of preparation and investment gave Ken Livingstone the confidence to go ahead. Any other politician will face this choice: at what point (and in which places) are the alternatives to car use good enough to start deterring car use through pricing, or is the charge the schock treatment needed to kick us out of habit and improve alternatives?

3. What to do with revenue? 

It is clear to us that any road pricing should ring-fence money raised and reinvest it in public transport, walking and cycling improvements. This is the typical model of ‘stick and carrot’, providing better alternative choices while nudging people towards them with the pricing system. Nottingham’s Workplace Parking Levy, for instance, has played a part in the shift to public transport use in the city. The income from it has raised around 5% of the funds needed for its £570 million tram extension.

However, the money raised through road pricing won’t be enough on its own, nor will it be totally reliable due to the reasons set out earlier. Substantial and ring-fenced funding must be identified and allocated to the development and improvement of walking and cycling infrastructure along with public transport if road pricing is to succeed. Road pricing alone shouldn’t be seen as a funding panacea for cities nor a critical revenue stream. With physical inactivity estimated to place direct costs to the NHS of £1.06 billion a year; £6.5 billion a year assocaited with lost productivity through absence from work, education and premature death; and on top of that around £10 billion a year as a result of poor air quality, congestion and traffic collisions, supporting a shift in travel behaviour is clearly worth much much more in the long term.

Protecting against a revenue focussed charge could be a job for any enabling legislation. It is already illegal for Local Authorities to factor parking fines into decisions and plans on budgets. Likewise, the legislation that allowed for congestion charging and workplace parking levies specifies that funding must go back into sustainable transport. Promoters will need to be wary of the myth of the ‘cash cow’.

4. What is fair and what isn't? 

Fairness needs to underpin any scheme. The five negative health impacts of motor-traffic - physical inactivty, collisions, air pollution, noise and severance - all have greatest impact deprived and vulnerable people in our society [PDF]. Those on low incomes, elderly or young, are more likely to suffer the negative impacts of roads and traffic while also being those who benefit least from the mobility it offers.

The lower a persons’ income, the less they travel, the less likely they are to own a car. In this sense road pricing is already progressive. Those who earn more, own more cars and drive them more often. Those who earn less use public transport, walk and cycle more, and suffer the negative impacts of traffic more. As part of a strategy to improve non-car options, road pricing is equitable. All other forms of public transport charge per use and a premium at busy times, why should roads be any different? But this assumes public transport is geographically equal, abundant and accessible (back to point 2).

5. Who pays more and who doesn't at all

There is then the question of defining and addressing what to do with ‘essential vehicles’. First, there are those who depend on a car for their mobility because of impairment, and second, the vehicles that bring goods and other things in and out of our cities for which alternatives aren’t readily available. These two issues are why pricing is perhaps fairer than an outright ban. It allows exemptions to be made through modified or existing benefits and welfare provisions, and for the freight sector, a well regulated market would decide who has access by vehicle and encourage the most efficient use of them. Meanwhile non-motorised travel (a) avoids the charge and (b) benefits from concomitant investment and reduced traffic, both of which serve to tip the balance for the great majority of personal travel.

Looking ahead

In cities across the world, road pricing is back on the table. Elected leaders will have to make some difficult decisions over what the scheme is for, whether they have confidence in their sustainable transport options, where the money will go and how to structure to system for greatest impact. We know that pricing isn’t a silver bullet, but a very powerful means to manage demand from cars, vans and lorries while shifting the space on our streets to favour walking, cycling and public transport.

Our Street Talk demonstrated how the discussion has moved on in London. Polling suggests Londoners are broadly supportive with two-thirds thinking a road pricing scheme would be fairer than the existing congestion charge. We are already on a path to more comprehensive charging with the T-Charge and Ultra Low Emissions Zone. And across political parties, our repreentatives recognise the flaws with the congestion charge and want something even more effective. New York, Vancouver, Portland are considering charges, while British cities moot their own Clean Air Zones.

Our Street Talk panellists helped to set out the choices ahead. The ‘Miles Better’ proposal showed what is technically possible already. The question is what is politically possible.

Read the summary of Street Talks January 2018: Should cars be priced off London's roads?

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