Further memorandum by the Secretary of
State for Transport (RP 21A)
ROAD PRICING
1. In the discussion paper "Managing
our roads" published in July 2003 and in "The Future
of Transport" White Paper published in July 2004, the Government
reaffirmed its commitment to tackling congestion and improving
accessibility. The Government continues to invest increasing sums
in public transport, and to actively promote joint planning and
transport solutions through its programme to develop sustainable
communities.
2. Road pricing is one means of reducing
congestion to the benefit of the road-users, the economy and the
environment. It would be a way of paying differently for the way
we use roads in order to influence the way, the route or the times
people choose to travel. The key is changing how, not how much,
motorists pay for road use. By creating incentives to travel differently-whether
taking the journey earlier or later than peak times, whether sharing
a car or using public transport-it should be possible to make
sure traffic on the roads flows more freely.
3. It is already possible to introduce relatively
"low tech road pricing schemes in local areas—such
as the London Congestion Charge. In 10-15 years, it should be
technically possible to introduce a national road pricing scheme.
THE CHALLENGE
OF CONGESTION
4. For most people, most of the time, the
road network functions well. However, there are many places, especially
during peak hours, where road capacity and the pattern of road-use
results in slow and unreliable journeys.
5. Where congestion occurs it has a significant
impact on:
— Individuals, through frustration
and the consequences of unreliable journeys.
— Businesses, through the cost of lost
time as their employees or goods are caught in traffic.
— The environment, with traffic caught
in congestion causing more pollution and CO2 emissions.
6. Where congestion occurs, it is a problem
for the traveller and a brake on our economy.
7. It is essential we get the most out of
the road network. We are undertaking policies to promote smarter
choices and better network management. We are piloting innovations
such as car-pooling lanes, hard shoulder running and variable
speed signs. The Highways Agency is increasingly moving to active
management of the road network. We are continuing investment in
public transport to provide an increasingly attractive and convenient
alternative to car use. In parallel, we are targeting additional
road capacity to where it is most appropriate and in keeping with
our environmental commitments. These approaches will make a difference,
but looking ahead, they will not be enough on their own to prevent
congestion spreading to more roads and longer periods of each
day.
8. By 2015, total traffic on the roads is
predicted to have grown by over 30% compared to 2000 levels. There
is a need to face up to the potential threat of growing congestion.
9. Targeted extra capacity is important,
but we know we cannot simply build our way out. The cost would
be too high economically and environmentally. There are legitimate
objections to unrestrained road building across the countryside
and little space in towns and city centres to build new road space.
10. We know doing nothing—and allowing
congestion to increase to unacceptable levels—is the worst
option of all.
11. Road pricing may provide a solution
to the problem of congestion. The government will do the work
necessary to develop this option and build a public consensus
around the objectives for road pricing and how to use the revenues.
ROAD PRICING
FEASIBILITY STUDY
12. In July 2003, the Government established
a Road Pricing Feasibility Study (RPFS) to examine the feasibility
of options for a new way of paying for road use within the following
terms of reference:
(a) To advise the Secretary of State on practical
options for the design and implementation of a new system for
charging for road use in the UK.
(b) The study should take into account the
following objectives for any new charging system:
— to deliver a more efficient approach
to the structure of transport pricing;
— to be fair, respect privacy, and
promote social inclusion and accessibility;
— to deliver higher economic growth
and productivity for all regions of the UK; and
— to deliver environmental benefits.
13. A steering group including representatives
of motoring and freight organisations, environmental interest
groups, and business directed the Study. This steering group reported
and published its findings on 20 July 2004.
14. The report forecasts that a well-targeted
national road pricing scheme has the potential to make £12
billion worth of benefits to the economy in time savings and increased
reliability. It concludes that such a scheme:
— is becoming technically feasible,
and certainly will be in the medium term (10 to 15 years). This
is based on the market-led development of in-vehicle satellite
navigation equipment and the development of standards at the EU
level. In practice there may be other technical options;
— would cost a lot to run, but the
net revenue stream could be used in a number of ways. For example,
to reduce existing motoring taxes, to reduce other taxes, to fund
additional spending on road capacity, public transport and other
public spending or for a combination of these;
— would lock in the benefits of other
measures to tackle congestion;
— subject to further work, could meet
the objectives that the Government set when commissioning the
study;
— needs a sufficient level of public
acceptability. Trust and confidence in the viability and delivery
of any national road pricing scheme, including the use made of
the revenue, are central;
— needs a greater knowledge at the
local level of road use and road users;
— would be a massive and complex task
requiring concerted action and co-operation at all levels of government
over a number of years; and
— in the meantime, a number of congestion
charging schemes at the more local level would amount to a trajectory
towards a national road pricing system, leaving open choices to
be made along the way.
15. In "The Future of Transport"
White Paper (published July 2004), the Government welcomed the
report and, in response, committed to:
— inform the public about what road
pricing is and how it might work, and undertake the further research
recommended, so that people can engage with a clear proposition,
not just an abstract concept;
— lead a debate on what would make
such pricing acceptable to motorists;
— seek to build a public consensus
around the objectives of road pricing, and how to use the revenues;
— work alongside forward looking authorities
and areas, to help them put in place packages of measures which
tackle local congestion problems. (Resources from the new Transport
Innovation Fund will be available to support packages which combine
road pricing, modal shift, and better bus services); and
— begin a process which would lead
to international standards for in-car equipment, taking account
of current, market-led developments.
16. The Government will be publishing a
full response to the feasibility study in due course.
Should road pricing be introduced for certain
sections of the road network in the short term?
17. Within the boundaries of current legislation,
the Transport Act 2000 (the 2000 Act), local authorities
have the powers to introduce road pricing schemes for the purpose
of directly or indirectly facilitating the achievement of policies
in their local transport plans. The Secretary of State has the
power to charge on national roads, where this would be "ancillary"
to a local scheme. In line with White Paper commitments, the Government
will be working with interested local authorities to develop further
schemes under the 2000 Act powers and providing financial support
through the Transport Innovation Fund. As London showed, there
is little doubt that road pricing can be successful in local areas
when it is implemented as part of a wider transport package.
If road pricing is introduced, what factors should
determine which roads are priced and what technology should be
used?
18. The main factors to be determined are
the benefits to road users, and to the wider community, from reflecting
through prices the costs of choices to drive on busy roads at
busy times. The extent to which such a regime is necessary depends
critically on the effectiveness of parallel strategies (management
and investment in public transport), and ultimately on its public
acceptance as a better alternative to yet further capacity or
yet higher congestion. Under current legislation, it is up to
local authorities to develop their own schemes, ensuring that
they are consistent with national policy objectives and local
transport plans, and of course are value for money. This will
need to be reconsidered in the future if we wish to move towards
a national road pricing scheme.
How "hi-tech" does road pricing need
to be?
19. Local schemes, particularly the smaller
schemes, can be fairly "low-tech". Technological requirements
should follow scheme design. London has shown how a technologically
relatively simple scheme—using self-declaration payment
mechanisms, with enforcement through cameras which automatically
recognise number plates—can still deliver large-scale benefits.
Microwave-based technology that reads tags in vehicles as they
pass by road-side equipment (such as is used on the Dartford River
Crossing) is another potential approach for the medium term.
20. Charge structures which aim to charge
on the basis of distance, time and place, in complex networks
can require very demanding technological solutions. The Road Pricing
Feasibility Study showed that, nationally, the best benefits will
come from a fine-tuned system based on satellite-positioning.
However, this would be challenging to deliver and is some years
away.
What role should local highway authorities play
in introducing road pricing?
21. Local authorities are key to bringing
forward schemes in our towns and cities. With their detailed understanding
of transport in their area, they are best placed to design a successful
scheme as part of a overall package, and to win a local consensus.
However, the Road Pricing Feasibility Study showed that there
is a need for action at the national level too, and the Government
is prepared to act as set out in the White Paper.
How easy will it be to move from individual toll
roads and local urban congestion charging schemes in the short
term, to national road pricing in the long term, and what needs
to be done to ensure the transition is a success?
22. The Road Pricing Feasibility Study showed
that, while a national scheme is at least 10 years away, there
are reasons for undertaking forms of road user charging on the
more limited scale that is technically feasible now, in particular
area or cordon congestion charging. These can help to address
current problems on the road network, improve our knowledge of
the practicalities and effects of pricing, and, through growing
familiarity, should greatly improve understanding of its benefits.
23. In "Managing our Roads",
the Government reaffirmed its commitment in the Transport Act
2000 that any local authority which introduces its own scheme
before 2011 under the powers already available will continue to
keep the revenue for at least the first decade after implementation,
irrespective of whether or not a national scheme is introduced
subsequently. The Government will take into account the existence
of such schemes in the design and implementation of any national
scheme.
How will the Lorry Road User Charge fit into any
national road pricing and motorway tolling developments?
24. The purpose of the Lorry Road User Charge
(LRUC) is to ensure that all hauliers, regardless of nationality
pay their fair share towards the costs they impose in the UK.
It will apply to all goods vehicles over 3.5T running on UK roads,
regardless of their nationality of origin. The Government has
made a commitment that this charge will be tax-neutral, at an
overall level, for that part of the haulage industry which purchases
fuel in the UK, with the charge being offset by a rebate on fuel
duty on all fuel bought in the UK by charge-payers.
25. Responsibility for implementing LRUC
has been laid to HM Customs and Excise (HMCE), and it is intended
that the charge will take effect from 2007-08, following trials
during 2006. Full implementation of charging is expected to be
phased in, with the heaviest lorries being brought into the scheme
first to ensure a manageable introduction.
26. HMCE issued preliminary Invitations
to Negotiate to 10 bidders in August 2004; the bidders' responses
are currently being evaluated, and a shortlist will be selected
to receive the final Invitation to Negotiate. In March the Government
published a Progress Report which set out an indicative timetable
including legislation in Finance Bill 2005 and contract awards
by the end of 2005, followed by testing, recruitment of staff
and further, secondary, legislation before the charge goes live,
with vehicles starting to be registered in 2007.
27. The procurement is being conducted on
the basis of an output-based specification, requiring the bidders
to develop proposals for technical solutions rather than specifying
these at this stage. It is intended that standard contractual
flexibilities will be used so that we have flexibility for LRUC
to be adapted for consistency with any wider national charging
scheme or significant pathfinder that might be implemented during
the lifetime of the contracts.
28. While LRUC will clearly anticipate many
features of a national road pricing scheme, there are a number
of key differences. Its principal purpose is to ensure a fairer
system of taxation, rather than to seek to influence traffic flows
and congestion. LRUC will also involve a much smaller population
of vehicles (c 500,000) than would a national road pricing scheme
(c 26 million). Moreover, haulage operators are already operating
in an environment more amenable to technology based charging;
they are already required to use tachographs; and many haulage
firms already make use of sophisticated on-board telematics and
fuel monitoring systems for their own management purposes. LRUC
has never been designed as a trial run for national road pricing,
though it is expected to provide important insights into the procurement,
technological, operational and other issues that would arise in
any future national road pricing scheme.
Are there other measures which could reduce congestion
more effectively?
29. Road pricing is one tool which can help
manage the road network more effectively. There are a number of
other policies which can also reduce congestion, and we need to
establish the right package of measures for the area in question.
30. Our goal is a road network that provides
a more reliable and freer-flowing system for all motorists and
road users, with informed choices about how and when to travel.
However, the issues, especially congestion are complex—there
is no "magic bullet" solution. To this end we are developing
targeted solutions with local authorities.
31. We are improving the road network through
investment, introducing new approaches to managing traffic, and
influencing demand.
32. A number of new approaches have been/are
being introduced to help manage traffic. These include:
— The Traffic Management Act 2004—local
authorities have been given a road network management duty, this
includes new powers to manage local roads. Local Authorities are
being encouraged to develop Local Transport Plans (LTPs) matched
to local circumstances.
— From April 2004, to help keep traffic
flowing and improve journey reliability and manage congestion,
the Government is trialling the introduction of Traffic Officers
in the West Midlands—this move has been well received. It
is now intended that Traffic Officers be introduced nationally
over the next two years.
— In looking at existing capacity,
the Government is piloting Active Traffic Management on the M42—which
includes variable speed limits and hard shoulder running; the
Government is also looking to introduce carpool lane pilots (High
Occupancy Vehicle lanes) and the testing of variable speed limits.
The Government is also considering new ways to the minimise effects
of roadworks.
— It is important to improve the provision
of transport information. Initiatives such as the National Traffic
Control Centre and the first Regional Control Centre have already
been launched and the Government is currently testing on-stream
information systems that will provide up-to-date road traffic
information and journey planning information (for all forms of
transport).
33. The discussion document "Smarter
choices: changing the way we travel" (published July
2004) showed that influencing demand can significantly impact
on traffic.
34. School travel plans, workplace travel
plans and personalised journey planing can help to prompt people
to consider, and take up, alternatives to the routine use of their
car, especially for journeys at peak hours.
35. Demand management such as road user
charging locks in the benefits of other measures. The key to reducing
congestion is to remove a relatively small volume of traffic at
congested times and use demand management to prevent space thereby
freed up being filled up by new traffic.
November 2004
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