Tuesday, July 20, 2010

Pay as you Drive

I'm convinced that road-pricing is inevitable, but politicians are as yet too scared to make the case to the public.

However, reported in the Standard, Tim Yeo, former environment minister in the Major government, is proposing it as chair of the all-party Commons Energy and Climate Change Select Committee. About time too.

If I go to Cumbria with my wife and kids, it can cost the wrong side of £400 if I go by train. Cheaper fares are available, but only if I book early and spend time scouring around the interweb looking for cheap tickets, which is a pain. It's so much easier to take the car, and I can do the round trip with about £60's worth of diesel. It really is a no-brainer.

Contrast that with the situation in France, where your fuel cost is doubled by the 'payage' road charges, and train tickets are sooo much cheaper. I once went first-class from Paris to Bordeaux for about £30. Plus the TGV trains are sooo much faster than our steam-era network.

There's not much point in building a high-speed rail network if it's going to be too expensive relative to driving to attract large numbers of people off the roads. Even with the oil price doubling or trebling, driving could still be cheaper if the price of rail travel stays the same or increases - and increases seem odds-on given recent warnings about transport budget cuts and fare rises.

At the moment, the costs of each mile driven in a car is massively front-loaded or externalized. The costs of the road system - including the cost of the land and infrastructure, the environmental costs, the cost of policing, of the consequences of road crashes, of the blight that a major road puts on all land around it within a half-mile corridor - is externalized and paid for by the taxpayer, by road crash victims, and by people whose house prices and land values are damaged by the presence of roads. Insurance, servicing and VED is paid for up-front by the vehicle owner, and depreciation on the vehicle only gets realised when it's sold.
When deciding how to travel, most people consider only what they could save by not making the journey by car - the marginal cost - which is only the cost of the  fuel (including fuel duty). If price is going to influence people's choice of transport mode, we need to make the marginal cost of driving a mile more reflective of the actual all-in cost. Road pricing helps us do that.

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