Memorandum by the Chartered Institute
of Logistics & Transport (UK) (RP 43)
ROAD PRICING
1. The CILT (UK) is the professional body
for individuals and organisations involved in all aspects of transport
and logistics. It has over 21,000 members including people with
considerable experience and knowledge across all aspects of passenger
and freight transport operations. It is, therefore, in a position
to offer an objective view on the merits and demerits of introducing
road charging in the UK and on its practical implications.
2. For many years now the Institute's view
has been that road pricing is needed to bring the demand and supply
for use of the road network into a better balance. A number of
studies published over the last three years, including the Feasibility
Study Report, have all confirmed the major advantages that differential
pricing would bring.
3. The Feasibility Study Report recommends
a programme of action in which the Government would take the lead.
This now needs to be translated into an action plan to be carried
forward with the involvement of all the parties concerned. In
our view the key issues are as follows:
(a) congestion is already severe in places
and traffic growth continues to outstrip the provision of extra
capacity. The introduction of congestion charging has now become
urgent and ways must be found of tackling the worst cases as soon
as possible;
(b) the feasibility study report estimates
that a national charging scheme based on global positioning systems
(GPS) could not be introduced for 10-15 years. But the best can
be the enemy of the good. We should not wait to have perfect technology
before making some progress, provided that interim solutions can
be upgraded later. Worthwhile schemes could be implemented using
technology that is available now, probably including GPS;
(c) we are not convinced that it will be
cost-effective to introduce electronic charging and enforce it
over the whole network, even if the ultimate aim is for 100% of
the fleet to have on board units (OBUs). For most of the network
for most of the time external costs are low and vary little. Fuel
duty would be a cheaper way of collecting the appropriate charge;
(d) fiscal neutrality sounds politically
attractive, but we shall have to face up to the fact that it is
not possible if operating costs absorb a high proportion of the
revenues and what is left will be needed to fund integrated urban
packages, of which congestion charging is one element. We need
a full public debate on the best use of net revenues; and
(e) central government must take the lead
in applying electronic charging to some parts of the trunk road
network and provide much stronger inducements for local authorities
if real progress is to be made in the near future.
4. Our answers to the Committee's detailed
questions are as follows.
Should road pricing be introduced for certain
sections of the road network in the short term?
5. The Government's feasibility report estimates
that a general system of electronic road pricing will not be available
for 10 or more years, meanwhile, traffic and congestion continue
to grow. Action is urgently required to deal with this problem
and charging has an important part to play alongside other elements
in comprehensive local transport plans and regional transport
strategies.
6. The advantages of short-term pricing
measures would be:
— earlier delivery of the economic
and environmental benefits of demand management;
— more practical experience of charging
regimes and people's behavioural responses to them;
— gaining understanding of the associated
technology; and
— demonstrating to the public and politicians
the benefits that charging can bring.
If road pricing is introduced, what factors should
determine which roads are priced and what technology should be
used?
7. We need some "trail-blazers"
to try out road pricing (both in urban areas and on the inter-urban
network) and the associated measures required (improved public
transport; car-sharing; encouragement of shorter journeys-including
cycling and walking; better management of motorways and trunk
roads).
8. In principle, priority should be given
to parts of the network where congestion is worst, mainly in and
around major cities but including some stretches of inter-urban
motorway. However, progress will be swifter in places where the
public and local politicians perceive that the present situation
is unacceptable and there is the prospect of majority support
for radical action; and where the accompanying measures, such
as public transport improvements can be implemented without too
much difficulty.
9. These projects should also, if possible,
cover a range of charging regimes to give practical experience
of their effectiveness and cost. Because of the long lead times
for introducing GPS based systems it will be important to apply
other systems that can be introduced more quickly, even if they
have to be superseded later. In some locations (eg where charging
by distance would have great advantages and it is important to
avoid diversion to parallel routes) GPS may be the best answer,
despite the fact that accuracy is not yet as good as it will be
later (see paragraph 18 below).
LONDON
10. The largest areas of congestion are
Inner and Outer London, as can be seen from the charts at Annex
A. In principle they should therefore have high priority. However,
applying charging in suburban areas raises some difficult issues
which ought to be addressed, but may take longer to resolve. For
example:
— Most of the journeys are by residents
of the area. So, unless it is split up into smaller zones (which
is possible), it makes no sense to give residents an exemption
as generous as that in the central London charging scheme. This
will be difficult to sell politically. Some form of discount (eg
a free allocation of miles or journeys per week) might be a sensible
alternative concession.
— For many journeys the origins and
destinations are so dispersed that public transport is not a plausible
alternative to car use. So, while public transport improvements
will still be important more effort needs to be put into facilitating
other behavioural changes, such as car sharing, the use of cycle
and walking for shorter journeys and making certain kinds of journey
less often.
— The system will need to be more subtle
and finer-tuned than the central London scheme, probably charging
different rates at different times of day, making charges proportional
to distance and perhaps a "free" or low-rate allocation
of miles per vehicle per week (see above).
— Consideration should be given to
including the M25 and other motorways and trunk roads within it
in any outer London charging scheme.
— In the long run, distance based charging;
probably using GPS is likely to be desirable. But shorter-term
solutions may be possible using direct short range communication
(DSRC)—ie tags.
— The DfT should help TfL to fund developments
of this kind. It is also becoming urgent to have type approval
for charging technology.
OTHER CITIES
11. Area charging could be used in cities
outside London where congestion is severe. Again there are variants
on the London scheme such as peak hour only charges, double cordons,
etc Edinburgh (if it goes ahead) will be an important example.
Congestion charging is most likely to be politically acceptable
where levels of congestion and environmental damage are high and
causing local public concern. As well as major cities, historic
towns with densely developed and highly attractive centres with
little or no opportunity to increase road capacity or parking
provision would be appropriate locations.
12. It is vital that central urban charging
schemes should be combined with public transport improvements
and other measures. Otherwise city centres will suffer from the
diversion of journeys to destinations outside the central area
and by competition from neighbouring cities that have not introduced
charging.
13. Local authorities may be reluctant to
embark on heavy expenditure for ground-breaking schemes that may
not be guaranteed of success. Central Government needs to support
major experiments from the proposed Innovation Fund, including
city-wide improvements in public transport. It should stand behind
local authorities if schemes have to be radically altered or abandoned
in the light of experience. To provide a sufficient inducement,
it may need to make central government funding of major transport
conditional on the introduction of road charging. Because area-wide
light rail takes time to introduce major improvements in the quantity
and quality of bus services will be needed. There needs to be
early experiments with quality contracts to test whether they
are sufficient or whether more radical changes in the de-regulated
bus market are necessary.
14. The existing powers in the Transport
Act 2000 for local authorities to introduce charging should be
reviewed to ensure that the procedures do not raise unnecessary
barriers to swift action. The rules for the preparation and revision
of Local Transport Plans must also be flexible enough to allow
local authorities to bring forward charging schemes as soon as
they are ready.
INTER-URBAN
ROADS
15. The Government needs to demonstrate
that it is not leaving all the difficult decisions to local government
but is also tackling the problem of applying charging to the network
for which it is directly responsible.
16. Moreover, there are advantages in "locking
in" the benefits of extra capacity on the motorway network
and other major roads by introducing charges at the time the improvement
is delivered, so as to contain traffic levels within the capacity
provided. Schemes of this kind could also be used to test the
technology of applying GPS to inter-urban roads.
17. A number of practical problems need
to be resolved:
— Diversion to other less suitable
roads, if only an improved motorway is subject to charging and
not the parallel routes, presents a particularly difficult issue.
This may not be a problem so long as the new capacity comfortably
exceeds traffic levels and the level of charge justified on congestion
grounds would be low. But in these circumstances, the economic
benefits of charging would hardly make it worth while. Once traffic
and congestion begin to rise to a level where higher charges become
necessary the diversion problem arises. This is why a universal
charging system is much better in the long run.
— Individual cases need to be considered
on their merits. In some cases diversion may not be a serious
problem, in others it may be possible to charge on parallel routes
also.
— Charging on a parallel express route
(the M6 proposal) gets around some of these problems but runs
up against the need to obtain planning approval for the new route,
which could take 10 years or more, by which time general road
pricing may be around the corner.
— New capacity could be charged for
simply as a way of funding the investment, but this is at variance
with the principle of charging according to the level of external
costs (including congestion) and might accustom drivers to the
idea that they should pay less on congested roads, not more.
— Charging for widened motorways by
manual payment at toll plazas is unlikely to be practicable or
cost-effective. So, "non-stop" systems would need to
be applied and vehicles using the improved motorway appropriately
equipped.
— If some motorway improvements are
subject to charge (eg the M6) and others are provided free (eg
M1, M25?) users may feel that they are being discriminated against,
unless the level of traffic on the improved road is so high that
the introduction of a charge brings a clear economic benefit.
This suggests perhaps that piecemeal charging should be introduced
only on roads likely to fill up quickly (eg M25), but that raises
the diversion problem. Depending on local circumstances, area-wide
charging may be the only satisfactory answer.
How "hi-tech" does road pricing need
to be?
18. We need to work towards a system capable
of charging by distance. The feasibility study brings out very
clearly the additional benefits this would bring. That probably
means the use of global positioning systems, which need to be
developed and tried out as quickly as possible. The accuracy of
GPS will be greatly improved when the Galileo system is available.
Meanwhile, lower accuracy imposes some constraints, but they should
not be regarded as over-riding. Charging regimes could, for example,
allow for a margin of error within which users were given the
benefit of the doubt. The disadvantages of sub-optimal GPS systems
in the early years could be far outweighed by the benefits of
distance charging, which is not only more effective but arguably
much fairer because users pay in proportion to their use of the
network.
19. Systems should also be user-friendly
and automatic. The London scheme, which was right in the light
of the technology available at the time, is more difficult to
use because users have to remember to register their journeys
one by one. So automatic number plate recognition technology (ANPR)
must be developed to be able to charge users automatically; or
automatic electronic communication of the payment (probably using
technology akin to mobile phones) should be introduced as soon
as it can be made available.
20. In car electronic payment systems would
have the advantage of permitting more subtle and differentiated
charging regimes and can be combined with other in-vehicle information
and route guidance facilities, which drivers may find beneficial.
21. However, the current forecast costs
of GPS based schemes are alarmingly high and may absorb half the
revenues, leaving only half to re-invest in better transport services
and making fiscal neutrality for road users impossible unless
the costs of operating the system fall on general taxation, which
would be politically unpopular and difficult to justify in economic
terms. The research and practical trials must find way of bringing
costs down.
22. A particular area for more detailed
study is related to the assumption in the report that electronic
charging should be applied to the whole network—partly because
of the assumption that the entire fleet must be fitted with OBUs
and therefore, a large part of the capital cost of universal charging
(the equipment of vehicles) will already be met. Even if this
is the case, the cost of collecting charges and enforcing payment
(eg by use of ANPR cameras) over the whole network, including
country lanes, must be much higher than if electronic charging
is restricted to those roads where external costs are high and
variable. Over the 80% of road mileage where external and other
costs are at or below the current level of fuel tax and vary very
little (see the graph in paragraph 4.21 of the Feasibility Study
report) fuel tax would be a much cheaper way of collecting an
appropriate level of payment. This element of the fuel duty should
preferably be re-classified as a charge not a tax.
23. The report asserts that factory fitting
of on board units (OBUs) is technically necessary. That means
that it would take some 15 years from the agreement of an EU standard
for the whole vehicle fleet to be equipped. This is an unacceptably
long lead time. Moreover it raises the problem of vehicles fitted
many years ago when new, whose OBUs have not yet been used because
charging has not been introduced. These units may have become
obsolete or unreliable. More work is needed on whether units could
be retro-fitted if all cars were required to have a space and
wiring connections for them. Meanwhile, if electronic charging
were applied only to the 20% of roads that suffer severe congestion
many vehicles might not need OBUs and only a smaller number would
need to be retro-fitted, even if in the long run the whole fleet
were equipped through fitting when new. This would reduce the
cost in the short term.
24. Any system must make provision for occasional
users (including foreign vehicles). The most plausible scheme
would be to have a London style camera based system for providing
a white list and enforcing occasional visitors. This is workable
and enforceable, but would not provide the same level of sophistication
as a GPS scheme demands. It might be possible to devise a charging
regime that penalises drivers without OBUs by charging a cruder,
higher rate—presenting the GPS based approach as giving
discounts for OBU fitted vehicles doing shorter journeys. This
option could be tried in one or two smallish areas where the cost
of providing the second, camera system is not too great to give
some experience in use of GPS based systems.
25. A very high priority is for a European
agreement on fitting standard system of OBUs as part of Construction
and Use Regulations.
What role should local highway authorities play
in introducing road pricing?
26. Pricing needs to be a part of integrated
local plans and regional spatial and transport strategies. Therefore,
local authorities should be responsible for the details of urban
and other local charging regimes within a framework and system
of support provided by central government.
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?
27. In the long run, the technology for
all charging regimes should be common-or inter-operable-to avoid
the need for vehicle users to have multiple OBUs. In the short
run, the technology for urban area-based schemes will probably
be different (tags). The cost of conversion ought to be borne
nationally; otherwise local authorities will be deterred from
introducing schemes until the ultimate technology is defined and
available.
28. The DfT's research programme needs to
include a study of the detailed practical implications of migration
from early schemes to the eventual one.
29. There is a need for some form of central
clearing house so that any user only has to deal with one agency,
wherever they are driving.
How will the Lorry Road User Charge fit into any
national road pricing and motorway tolling developments?
30. Initially the proposed electronic lorry
charge will not include an element of congestion charging, although
there will be a differentiation between motorways and other roads.
31. If a national electronic charging regime
is introduced for all vehicles with higher charges at congested
times on particular roads, charges should be applied pro-rata
to lorries and collected using the same technology as the lorry
charge to simplify payment for fleet operators.
32. Meanwhile, if charging is introduced
in cities on an ad hoc basis, the charges should apply to lorries
in addition to the general lorry charge just as they will apply
to car drivers in addition to fuel duty (which lorry operators
will have partially refunded). But payment should be made as simple
as possible and building on the electronic lorry charging scheme
if possible.
33. If individual motorways are tolled (as
in the M6 example) the charges for lorries should probably be
additional to the general lorry charge on the grounds that they
are receiving an additional benefit of a less congested journey.
But criticisms may arise about whether this is fair; if not all
extra motorway capacity is treated in the same way (see paragraph
17 above). There needs to be a consistent policy framework.
Are there other measures which could reduce congestion
more effectively?
34. Charging is not an answer in itself
but needs to be introduced in conjunction with other measures
that are mutually supportive. Similarly, by themselves measures
such as public transport improvements, road widening, better management
of the network and smart travel will not cope with growing demand
without associated pricing policies. In some cities effective
alternatives to charging, at least in the short run, include stricter
controls on parking and parking charges, including private non-residential;
and the more intensive use of traffic management measures in city
centres.
35. In the medium term it would be worth
while experimenting more with high occupancy vehicle (HOV) lanes.
The modelling for the Feasibility Study concludes that the most
common behavioural response to road pricing is car-sharing. Encouraging
this by more direct means might therefore deliver a lot of the
benefits. Enforcing HOV lanes is not easy. But the cost of road
pricing is such that the same money (or less) spent on enforcing
HOV lanes might be effective.
November 2004
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