What is ‘road pricing’ and how could it affect UK drivers?

The government’s infrastructure tsar has said drivers in the UK will “inevitably” have to start paying charges to use some of the country’s roads. In an interview with the Telegraph[1], Sir John Armitt, chairman of the National Infrastructure Commission (NIC), said the government has to consider road pricing schemes as it faces a loss of nearly GBP30bn in fuel duty receipts as more motorists switch to electric vehicles. “I don’t see why it should be any different to anything else.

We pay for all our other infrastructure services as we use them,” he said. “We pay either through our taxation, or we pay at the point of use or our pensions are used to invest.” Chancellor Rachel Reeves[2] has previously been urged to consider a pay-per-mile scheme[3], which prompted Conservative MP Alicia Kearns to warn that such a measure would disproportionately impact people who live in rural communities and have to cover longer distances. The idea of road pricing has been floated by environmental campaigners and policy research groups as a way to cut greenhouse gas emissions and air pollution, reduce congestion and generate revenue for road infrastructure.

Here, Yahoo News takes a look at how road pricing could potentially be implemented in the UK.

What is road pricing?

Road pricing involves direct charges levied on motorists[4] for driving on public roads.[5] It has two purposes: first, to generate revenue; and, secondly, to manage the costs of motoring such as pollution, emissions and congestion. There are already some local road pricing schemes in place across the UK, including toll roads, charges to enter bridges and tunnels, and zonal charging schemes like London’s Congestion Charge zone. They are more common in other countries including Sweden, Germany, the United States, and Singapore, which arguably has the world’s most advanced scheme.

How does it work?

There are two distinct ways of charging for road use – congestion charging and tolling – according to a report[6] by the Chartered Institution of Highways and Transportation (CIHT).

Tolling is generally used on motorways or bridges and the motive is usually for raising revenue to pay for road infrastructure, rather than relieve traffic congestion. However, congestion charging, where vehicles are charged as they cross a cordon on the outskirts of the city, or through a series of zones within a city, aims to “achieve transport policy objectives such as reducing congestion and encouraging a shift to public transport”, the CIHT says.

An electronic road pricing toll in Singapore. (Alamy) Road pricing can be enforced with a pay-per-mile scheme, which sees road users paying a charge based on how far they travel in a given time period. Such a system is used in Singapore, where users pay more to use roads at peak hours, with real-time traffic data used to adjust toll rates and manage traffic congestion.

Gantries are fitted with sensors to track vehicles, which have electronic passes allowing drivers to pay as they drive. Public transport charity Campaign for Better Transport (CBT) has urged Reeves to adopt a pay-per-mile scheme for electric car drivers, suggesting they should pay less than motorists pay in fuel duty but should be “fairly charged” for their road use. Other campaigners including the RAC’s head of policy Simon Williams have called for fuel duty to be replaced entirely by a pay-per-mile system.

Why do campaigners support road pricing?

While making it easier for drivers to commute into city centres is “vital to economic growth”, it has to be done in a “sustainable way”, says Michele Dix, Commissioner at the National Infrastructure Commission.

She told Yahoo News: “Increased investment in public transport to encourage people out of their cars is important – but in some larger cities, it may not be sufficient. “As populations grow some type of demand management scheme, whether road pricing or some other measure, may be needed in addition to give cities the flexibility to generate more trips with fewer negative impacts. “It will be for city leaders to decide which option is best for them – but it’s important that any revenue raised goes to investing in public transport and active travel.”

Analysis by the Social Market Foundation[7] suggests fuel duty is regressive, “falling more heavily on lower-income drivers”, even though they “drive fewer miles than richer ones”, as the tax takes up a larger share of their disposable income.

London’s ULEZ zone is another form of road pricing in the UK. (Alamy) For this reason, the think-tank says replacing this with a “simple” national road pricing regime with a fixed per-mile charge could be “revenue neutral”, meaning it could raise the same amount as fuel duty while distributing costs in a fairer way. It adds that a growth in electric vehicles – which do not incur fuel duty – will eventually leave the Treasury with a GBP30bn gap in tax revenue, equal to around 2p on the basic rate of income tax, suggesting that a shift to road charges is “inevitable and sensible”.

Looking at one existing form of road pricing, London’s ULEZ zone, a report by City Hall[8], reviewed by Imperial College London, suggests that between 2019 and October 2022, ULEZ reduced nitrogen dioxide levels next to the roadside by an estimated 21% in inner London and by 46% in central London. However, the study also noted that London was already undergoing a drive to improve air quality, including the original Low Emission Zone of 2008 and measures to bring in cleaner buses and taxis.

Why are some people against it?

Writing for Car Magazine[9], journalist Graham King suggests a “maximalist” approach, which would involve a grid of cameras covering every inch of the UK road network is “never going to happen”. “Building the infrastructure and systems needed would cost tens, even hundreds of billions.

Even if the project went completely smoothly (what are the chances of that happening?) it could take decades for the scheme to pay for itself and start actually contributing to the country’s coffers,” he adds. An alternative could be to adopt a model similar to New Zealand’s, where drivers are charged £76 (GBP36) per 1000km driven – which in the UK could be tracked on mileage between MOTs.

The transition to electric cars is forcing the government to think of alternatives to fuel duty. (Alamy) However, he says the rates would have to be relatively low to avoid “damaging political backlash, especially from the haulage industry” and would almost certainly lead to people winding back the mileage on their cars, or changing vehicles to get around the charge.

A 2022 report presented to the House of Commons warns that devolution of road pricing – letting city mayors decide how to run their own schemes – “could lead to the introduction of clunky, unconnected schemes that charge users the same price for driving one mile into the zone as those who drive across it for hours in a day”.

“The more regional schemes that are created, the harder it will eventually be for the government to implement a functional national system,” it adds, warning that a “patchwork” of schemes would risk “engendering regional inequality and driving economic disadvantage”.