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And how! Today, the state collects around £30 billion from road users — mostly in fuel duty — and spends only around £7 billion. But demand for road use in many places exceeds supply, resulting in congestion, while vehicles damage the roads and impose costs on third parties through noise and air pollution.
Britain is not unique in these problems: many places have experimented with schemes to reduce them. Among the most interesting have been congestion-charging schemes such as those introduced in Singapore in the 1970s and Trondheim in Norway in the 1990s. Unfortunately, Ken Livingstone’s London scheme is a rather poor approximation of a congestion charge. First, the fee bears little relation to the degree of congestion. The same fee applies to vehicles entering central London between 7 a.m. and 6.30 p.m., regardless of when they enter the zone and how much time they spend in it. Second, many vehicles are exempt or pay a very low fee. People who live in the zone pay only 10 per cent of the normal cost — but only if they pay for a minimum of one week’s use, which provides an incentive to drive more, not less. Some vehicles powered by ‘alternative’ fuels are exempted from the charge, even though they take up as much room on the roads as other similar vehicles — though arguably cause less pollution.
A proper congestion charge would be more location-specific and would charge different prices at different times of day. This could be done with an electronic road-pricing system similar to that introduced in Singapore in 1998. Such a system could charge more at peak times, more for heavy vehicles that cause greater damage to the roads, and more for vehicles that cause more pollution. It would be much fairer than the present system for extracting revenues from road users.
Therein lies the rub, however. There is as yet no indication that more widespread introduction of road-pricing would coincide with the removal or reduction of taxes on fuel and vehicles. For people who live in the countryside — and who cause little congestion or pollution — this is a particular concern. They currently pay disproportionately. If fuel taxes were replaced by a rational system of road-charging, they would pay far less. But if road charges are introduced on top of existing taxes, they will pay even more. And there are also legitimate concerns about the privacy implications of introducing a widespread system of electronic road-pricing, since it could be used to monitor the whereabouts of vehicles.
How can we get to a more rational system? Decentralising the roads, taking them out of the state-funding system and scrapping taxes on fuel and vehicles would be one radical solution: allow civic-minded individuals to create new Turnpike Trusts that would take over the highways. This would provide incentives to improve roads — and, motivated by competition, incentives to build new ones. Meanwhile, road owners could be made responsible for the pollution they cause: the common law is already strict on this, requiring compensation to be paid to those harmed.
In urban areas, communities could take back their local roads. Such private areas already exist — but most, such The Park in Nottingham, are only available to the rich. If local people owned the roads, they could have greater control over who moves into and out of their community, with potentially dramatic benefits for society. In crime-ridden Johannesburg, local businesses took control of an area of the Central Business District, installed security cameras and private security guards; within months, crime practically vanished. If Johannesburg can do it, we can too.
Julian Morris is executive director of International Policy Network.
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