Memorandum by London First (RP 24)
ROAD PRICING
With reference to the Transport Committee's
inquiry regarding road pricing, London First would like the following
points to be noted:
Transport is the top priority for business in
London. An effective transport system is essential to support
London's competitiveness, continued growth of the economy and
the well being of Londoners in general. While public transport
usage is higher in London than in the rest of the country, roads
are also an essential part of the transport system. Local freight
movements, buses and emergency services are dependent on the efficient
functioning of the road network. Traffic congestion is more severe
in London than elsewhere. For example the time lost through congestion
in London is more than double that in other conurbations (35.7
seconds per vehicle km compared with 17.2: DfT Road Traffic Congestion
in England 2000). The DfT study concluded: "London is in
many ways a special case, because the sheer density of traffic
in the central and inner areas makes congestion here much higher
than elsewhere".
In any metropolitan area with restricted road
space only limited permanent reductions in congestion can be obtained
by improved traffic management and localised road capacity increases.
Effective demand management is therefore essential to increase
the efficiency of the road network, reduce costs to business and
create a better environment for residents and visitors. Following
a series of workshops with member companies between 1997 and 1999,
London First identified congestion charging as the most suitable
solution to the problem of congestion in central London.
We believe that the current congestion charging
scheme has been a success in London, which has led to significant
modal shift towards public transport, reduced traffic, increased
traffic speeds and a range of safety and environmental benefits
to Londoners and other road users.
While we note that some observers believe congestion
charging has disadvantaged some businesses in London, particularly
in the retail, leisure and hospitality sectors, it has been invaluable
in reversing the increase in congestion and its resulting negative
impacts. We believe, however, that there is a need for a range
of improvements to mitigate some of the adverse effects and to
make the scheme easier to use.
In response to the questions raised by the committee
we make the following points:
Should road pricing be introduced for certain
sections of the road network in the short term?
While we believe that congestion charging has
been a success in central London, we recognise that this area
is in many ways unique with a very high level of public transport
access and few residents. Therefore, we do not regard it as directly
replicable in other areas. But we also recognise that congestion
is increasing in inner and outer London, where there are no effective
measures at present to manage demand.
Because of the importance of reducing congestion
in the capital, London First believes that road pricing should
be introduced in the short term to gain the likely benefits as
soon as possible. It may be sensible, practical and economically
viable to introduce an interim road pricing scheme in some congested
areas. London First would like to see early detailed evaluation
of potential road pricing schemes to ensure the benefits of reduced
traffic levels could be realised as soon as possible, provided
that the costs of setting up the system and the wider social and
economic impacts were acceptable.
If road pricing is introduced, what factors should
determine which roads are priced and what technology should be
used?
In London most roads experience high levels
of congestion. With a charge level that can be adjusted by using
the variables below, we believe that road pricing should be introduced
on all roads. If any roads were left totally charge free, it could
tend to encourage their use as "rat-runs", hence increasing
local environmental problems and safety concerns.
The level of charge could however vary between
areas depending on the level of congestion they experience and
the overall planning objectives. The system could be configured
to discourage certain vehicle traffic on some road types, for
example HGVs using residential roads, particularly those near
to schools and colleges.
We believe that it would be very important to
customise the operational hours of any potential scheme to fit
the local traffic patterns. In central London, where there is
no drop in congestion levels throughout the day, there is a clear
need for longer operational hours. In most areas of inner and
outer London, where there are discernible peak periods, operational
hours or charge levels should be set to encourage drivers to use
the roads during off peak times, as a way of reducing peak demand.
How "hi-tech" does road pricing need
to be?
We would suggest that a level of technology
should be employed that can calculate the charge quickly, according
to the variables detailed below, while at the same time providing
fully automated registration, payment and use to all users without
any restriction on moving traffic.
In a complicated, heavily congested environment
such as London, a flexible scheme that can be adjusted for different
and changing conditions is clearly necessary to influence demand,
optimise traffic management and set likely revenues. Therefore,
we would suggest that the following items should be key variables:
— expected levels of congestion;
— type of day, eg weekday, weekend
or bank holiday;
— vehicle fuel type or emission levels;
— road classification, eg discourage
HGVs on residential roads;
— availability of alternatives modes.
What role should local highway authorities play
in introducing road pricing?
In the London context, with a dense network
and 35 highway authorities managing the development and operation
of the road network, it would be important for there not to be
cross-border variation in charge levels or the user-experience.
Therefore, the scheme would need strategic management by an appropriate
body such as TfL.
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 longer term, and what needs
to be done to ensure the transition is a success?
London First is not able to comment on issues
involving technical interoperability but we would make three other
comments in this area.
1. The major objective of the introduction
of any road user charging scheme is to change the behaviour of
road users. Even with interim schemes, road users will be encouraged
to consider reducing their road travel or switching to another
transport mode. Even if the system is subsequently upgraded, it
is the initial behavioural change that is likely to be most significant.
2. We believe that the user-experience is
very important and that many lessons have been learnt from the
London scheme. Registering and payment should be made very easy
and should not change as systems are upgraded in any given area.
Similarly the user should not be able to detect the transition
when driving between a local scheme and the national scheme.
3. While it is important that any new local
scheme should not employ technology and operating systems that
would be likely to be incompatible with an eventual national scheme,
progress with the introduction of charging schemes should not
be unduly delayed by a lengthy process of developing national
and possibly European standards.
Are there other measures which could reduce congestion
more effectively?
No. Making public transport more attractive
can play a part in alleviating congestion. Increased road capacity
and removal of bottlenecks can also help to reduce congestion.
But reducing congestion can be best achieved by a combination
of these measures with demand management, particularly at times
of peak demand. Experience with this "carrot and stick"
approach in central London has shown that it is more effective
in reducing traffic than policies which include only improving
public transport or increasing road capacity.
REVENUES
We would also request the Committee to consider
London First's views on the subject of the allocation of revenue
from road user charging.
As London experiences high levels of congestion,
large amounts of revenue would be generated from a scheme that
was effective in reducing congestion. If this were part of a national
scheme that was fiscally neutral, ie which offset this revenue
by reductions in vehicle and fuel taxation, the cost to road users
in London would greatly exceed any tax reduction they would gain.
The overall effect would therefore be a net transfer of income
from London to the rest of the country. London taxpayers already
contribute between £10 billion and £20 billion to public
expenditure in the rest of the country. Increasing this amount
substantially as a result of road user charging would be damaging
to London's economy.
Congestion charging would almost certainly not
have been introduced in London had the Government not agreed that
the revenue should be hypothecated to improving the transport
system. The business community was prepared to support it only
on the basis that it would help to pay for such improvement. It
was also a common reaction to the introduction of the charge that
the public transport alternatives had to be improved. The introduction
of a wider system of road user charging in London would be strongly
opposed by the business community—and no doubt Londoners
generally—if the proceeds went to reduce the taxes of drivers
living in less congested areas. While there is no objection to
higher incomes in London generating support for spending in other
parts of the country, in order to continue to make this contribution,
London must have the necessary investment to support its continued
growth and competitiveness, especially in transport. The proceeds
of road user charging in London should therefore be devoted to
renewing its worn-out infrastructure and providing increased capacity
to cater for its forecast growth.
November 2004
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