Scrapping Road Pricing

Well, I didn\’t think they would have the courage to do it even though it would be the economically rational thing to do:

Ministers are to perform a U-turn by shelving plans for a national road pricing scheme that would have cost motorists up to £1.30 a mile.

If you\’ve got a scarce resource then you want to charge people for using it. The charge should also be proportional to the usage. Fuel tax is a proxy, but not a very good one, as it doesn\’t account for the time and place of use: which is the congestion part that we really want to tackle.

In one of those little bits of serendipity, the new Oxford Entrance exams have been revealed. The first question is as follows:

Every motorist pays the same amount for road tax, regardless of how much they use the
roads: someone who covers as little as 1 000 miles pays the same as someone who
covers 20 000. This is unfair. Road tax should be scrapped and the money raised by an
increase in the tax on car fuel. Making this change would ensure that those who use the
roads more would pay more. This would not only be a fairer system, but could also bring
in more revenue.
Which of the following best illustrates the principle underlying the argument above?
A People should receive free medical treatment only if they cannot afford to pay
for it.
B People who travel to work every day by train should pay a lower fare than
those who travel only occasionally.
C People who earn more than double the average wage should be made to pay
much higher charges for dental treatment.
D Television channels should be paid for by subscription so that only those
people who watch them should be made to pay.
E Telephone charges should be higher for business customers than for
domestic customers because they are using the system only to make money.

Spooky, huh?

7 comments on “Scrapping Road Pricing

  1. The National Road Pricing is being scrapped. But people have short memories.

    SMOKE AND MIRRORS.

    It was replaced quietly by the The LOCAL TRANSPORT ACT and has 9 regional transport pricing areas in it, 1 for each region, and they are located at major intersections of motorway in each case, which means that you cannot move across the UK without encountering any 1 of these schemes, and says that any road pricing schemes run by local governments in future must be interoperable.

    The government submitted two tender notices in May 07 to the Official Journal of the European Union, asking companies to come forward for the demonstrations, which are now expected to start in spring 2008..

    see http://tinyurl.com/2qsbjr
    AND http://tinyurl.com/3d2w7o
    AND http://tinyurl.com/3dduac

    Greater Bristol area
    Cambridge area
    Durham
    Greater Manchester
    Shropshire for Shrewsbury
    Tyne & Wear
    West Midlands
    Reading
    Norwich area
    Nottingham, Leicester and Derby and the surrounding counties

    SMOKE AND MIRRORS

    and they all have to be done under a common system dictated by the EU.

    http://tinyurl.com/2otk6w

    THE government has moved into the phase now where everything will be done on a regional basis, as they no longer have powers over the UK as a whole.

  2. Thanks, IanP.

    Regionalisation – EU destruction of England by stealth.

    What is shocking is that the Tories do not seem to have grasped it, but why should they, for they seem happy to ride the gravy train of Regionalisation and the EU Superstate.

    The DfT statement was telling: “It is not the department’s intention, at this stage, to take the separate powers needed to price the national road network.”

    This bit was the rub: However, he said a network of local schemes could end with motorists paying more in some parts of the country without any reduction in fuel duty or car tax.

    Clearly Cyclops cannot bear to let go a red cent of taxation.

  3. Brown is no longer allowed to touch primary taxation, such as income tax or VAT, as it fits into the harmonous levels of the EU.

    The Regions must now begin to raise their own revenues, so we will begin to see lots of new taxes being driven supposedly from Westminster, but will be raised locally in the regions, such as Rates reassesments on houses, we have already seen the announcement on Pubs, and there are more to come.

  4. Forget the text book for once Tim. Road pricing will be nothing but an economic millstone that will drag down the rest of the economy. For a start the price won’t be set to maximise the utility of the resource, it will be set to minimise the utility. That’s the whole point, it’s being done as a response to the climate change loonies, and because of the increased control and leverage it will give to the bodies and politicians who will benefit from the income stream.

    The argument might just stick if the revenue was hypothecated and used to improve the road infrastructure, but we know motorists already pay many more times tax than is ever spent on roads. It might just stick if toll roads could be built as in France, but this is all stick, there is no carrot.

    Park the dogma, and get with pragmatism.

  5. We also have to consider the fact than a road pricing scheme will cost a lot more to implement (including the inevitable fraud) than the simpler fuel tax. So we could end up paying a lot more money, yet raising very little to either pay for improvements in transport infrastructure or reduce other taxes.

  6. “Brown is no longer allowed to touch primary taxation, such as income tax or VAT, as it fits into the harmonous levels of the EU.”

    That’s kind-of true for VAT (not in terms of actual rates, which he’s free to change, but in terms of exemptions etc); it’s complete nonsense for income tax.

    “The argument might just stick if the revenue was hypothecated and used to improve the road infrastructure, but we know motorists already pay many more times tax than is ever spent on roads.”

    However, we don’t know they pay many more times more tax than the social costs of their motorism – some studies suggest they do, some suggest they don’t.

    …anyway. The killer argument here, irrespective of personal ideology, is Ed’s – it’d be a massive waste of money that could more productively be spent on public transport improvements.

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