Annex
ANSWERS TO SPECIFIC QUESTIONS
Should road pricing be introduced for certain
sections of the road network in the short term?
Road pricing has two key applications:
— to manage demand, by using the price
system to regulate access to road infrastructure in place of congestion;
and
— to provide a stream of revenue to
finance additional road infrastructure, such as discrete linear
stretches of road or estuarial crossings, such as bridges and
tunnels.
Road pricing can deliver important benefits:
— promote efficient use of road space
by allocating it to those who most value it;
— reduce environmental damage caused
by congestion;
— lock in the benefits arising from
additional road space; and
— send signals about where to invest.
In the short term, ahead of a national scheme
being feasible, road pricing could provide a means of paying for
road capacity that might otherwise be impossible to provide within
an acceptable timescale. This has been the preferred way of procuring
strategic estuarial crossings in the UK for many years, and has
also recently been applied to the M6 toll road in the West Midlands,
as well as being proposed for a northward extension of this road.
This is in principle welcomed by business, subject to a number
of safeguards, particularly in terms of the timescales for delivery
and ensuring a reasonable framework for tolls.
Area based congestion charging schemes can also
be put in place, as has been seen in London. These can be used
to tackle specific problems in terms of congestion and can also
secure additional funding for investment in transport. If such
schemes are to be taken forward there are a number of issues that
must be addressed to ensure they are workable and do not impact
adversely on business. It will be vital for a coherent framework
to be put in place to ensure inter-operability and consistency
for business users.
In terms of the London congestion charge, there
are boundary effects and other impacts on business within the
cordon that still have to be understood more fully. Thus, whilst
the scheme seems to have been successful in its primary aim of
reducing congestion within the zone, a clear focus is needed on
assessing the wider impacts more fully and looking at how any
adverse effects on business might be mitigated.
If road pricing is introduced, what factors should
determine which roads are priced and what technology should be
used?
The choice is between charging for discrete
lengths of road (in the example of the M6 toll, the City Link
Toll Road in Melbourne or parts of road with High Occupancy Tolling)
or an area-based approach to pricing, such as in Central London
or Singapore.
The technology and approach used in Central
London may not be widely transferable given the costs involved.
There is clearly a trade off between the timescales for introduction
and more cutting edge technology which will enable far more sophisticated
pricing systems to be put in place. More sophisticated technology
is likely to enable more effective use of the price mechanism
and also help minimise administrative burdens for users.
The cordon based approach in Central London
is very much a "first generation" approach to urban
road pricing. A key disadvantage of this approach is that the
charge paid is not strongly related to the intensity of road use
within the cordon. The technological priority must be to develop
systems which enable the inclusion of variables such as distance,
time of day, vehicle classification and so forth. Further trials
and pilots, building on the DIRECTS scheme in Leeds, are needed
to develop robust systems. Eventually, such technology could form
the basis of a truly comprehensive national system of road pricing.
But road pricing must also be only a part of
a wider approach, including a focus on delivering genuine alternatives
for road users and ensuring that issues affecting commercial vehicles
within urban areas are tackled.
How "hi-tech" does road pricing need
to be?
Any road pricing scheme has some basic requirements—road
users who are to be charged have to be identified in some way;
they have to pay; and payment has to be enforced. Historically,
the earliest road pricing schemes in Britain were the turnpikes
where the use of a toll-booth satisfied the above requirements—so
in principle road pricing need not be "hi-tech" at all.
In practice, however, simple road pricing methodology is suitable
only for certain types of scheme with limited objectives, such
as the levying of a charge for access to a discrete length of
road and a key aim of any scheme must be to minimise impacts on
users. Other considerations such as land requirements for schemes
and visual impacts must also be considered.
More advanced technology is—or is expected
to be—available for remote identification with payment involving
the use of microwave and satellite positioning systems. Microwave
technology is already proven in applications in Singapore, Trondheim,
the M6 Toll road in the West Midlands and elsewhere. It is not
suitable, however, for comprehensive road pricing systems that
seek to calculate congestion charges using data for time and place,
as well as distance. In this instance, position fixing technologies—either
satellite or emerging cellular systems—will have to be used
and the technology is still unproven in widescale use. For all
of these systems, payment enforcement can be done through ANPR
systems, as with the London Congestion Charge, and usually some
form of processing device—the On Board Unit (OBU)—will
have to be fitted to the vehicle being charged. This latter constitutes
a fixed cost for the road user whilst all systems, of course,
have expensive set up and running costs for the authority levying
the charge.
In determining the technological sophistication
of a road charging system therefore the following considerations
have to be considered:
— What the road pricing scheme is intended
to do—schemes applied to urban areas typically demand more
complex technologies than linear charging schemes, especially
if they include functionality needed to base the charges on a
measurement of congestion.
— What the timetable for introducing
the road pricing scheme will be—position fixing technologies
are still in development and testing and the Government's Feasibility
Study judged that they would not be suitable for mass market application
for another 10 years at least.
What role should local highway authorities play
in introducing road pricing?
There are two basic institutional ways in which
a nation-wide road pricing system can evolve:
— Top down—in which central government
takes the initiative and imposes a scheme on a national basis.
— Bottom up—in which local transport
authorities implement their own schemes, which progressively coalesce
into a "trajectory" covering most of the country.
A top down scheme would have many advantages,
including:
— Being based on a single pricing methodology
it could resolve any problems with interoperability between charging
schemes.
— Allow the Government to offset the
impact of any charges with reductions in existing road taxation
("fiscal neutrality").
— It would apply to business and other
road users equally throughout the whole country, thus minimising
the creation of pools of "winners" and "losers"
which might happen with a more patchy application of road pricing.
On the other hand, a top down approach would
have a number of disadvantages and may be unlikely in practice
given the significant political, financial and technological risks
involved. A bottom-up approach is likely to be the favoured option
for central government and for many local authorities, because:
— It will allow them to introduce road
pricing in their area in the shorter-term.
— It can tackle local issues (much
congestion is in fact local) and create revenues for investment
in transport.
— There might be no other method of
tackling congestion of comparable effectiveness.
— Congestion charging could become
an integral part of their wider transport and land use planning
policies.
However, this could have potential disadvantages
for road users:
— It would be more difficult to offset
charges imposed on road users with tax reductions.
— Different authorities might introduce
different and inconsistent systems.
— Business and other road users might
face different systems and charge levels in different authorities
creating a complex pattern of "winners" and "losers".
The ideal relationship between central and local
government is a durable partnership, to pool knowledge, share
risks, launch a "debate" and raise consciousness amongst
the public about road pricing, and agree upon a programme of trials
to progress the application of technology. This is a demanding
challenge. If a bottom up approach is adopted, the Government
has a crucial role in issuing appropriate guidance to make sure
that some of the potential disadvantages are reduced.
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?
For a national road pricing scheme to develop
successfully from localised schemes it is necessary for the local
schemes to possess:
— A high degree of common functionality.
— Widespread public support in their
areas.
— Similar pricing structures, including
a schedule of exemptions, for determining road prices.
Securing these conditions will not be straightforward.
In addition there will be other challenges including the allocation
of different responsibilities and roles in a national scheme.
A pro-active role for central Government will be necessary to
develop a viable trajectory. Measures that it should be taking
to ensure this include (they follow section 28 of the Summary
in the Feasibility Study):
— Building consensus about the principle
and methodology of a national scheme by leading a national "debate",
and sponsoring research to bottom out how it would effect road
users, including businesses.
— Tackling the issue of how the revenues
from a national scheme would be used and what would the relation
be with the existing level of road user taxes.
— Work to ensure standardisation and
interoperability of technology at both a national and international
level.
— Develop a mutually beneficial partnership
with local authorities and other tiers of government (including
the devolved administrations), to create incentives for more practical
research and experiments, building on the achievements so far
with the London Congestion Charge and M6 Toll Road, thus providing
more practical examples of road pricing on the ground.
How will the Lorry Road User Charge (LRUC) fit
into any national road pricing and motorway tolling developments?
This is a key issue and the answers are far
from clear at this stage. Business needs greater clarity about
the likely interaction of these schemes. The LRUC is due to be
rolled out from 2007-08, some six years before the Government's
estimate about the earliest date that a national road pricing
scheme could be operational. The LRUC will anticipate many features
of a national charging scheme, although its immediate purpose
is different—to ensure a fairer system of taxation. In the
long run, the LRUC needs to be fully integrated into any national
scheme of road pricing.
Implementation of LRUC will be a major exercise
in IT procurement for government and will act as a test-bed for
the much larger procurement process necessitated by a national
road user charge. It is vital for the viability of the latter
that procurement of the LRUC is done in a cost-effective way.
It is also vital that the technology driving LRUC works to specification:
a systemic failure would be likely to put back application of
national road pricing by many years.
LRUC was introduced with the promise that it
would be fiscally neutral for hauliers so there will be key issues
in terms of how this will relate to, and interact with, other
forms of charging.
Are there other measures which could reduce congestion
more effectively?
As highlighted, road pricing must not deflect
attention from action that is needed in the short term to tackle
the issues impacting on the quality and reliability of the UK
transport system. Targeted road capacity enhancements must be
taken forward—it is not a matter of either/or—as well
as better management of the existing system. Faster progress must
be made There are also other measures that could help to tackle
congestion-including "soft" factors such as staggered
commuting, car sharing, tele-working and so forth—as well
as more conventional interventions, such as better public transport.
However, it is likely that the long term effectiveness of these
measures will depend on the ability of road pricing to lock in
benefits.
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