The gold standard for a reform of motoring taxation would be a full national road pricing scheme. This would replace some or all of the current motoring taxes with a variable charge per mile driven. Using busy roads during peak times would incur a hefty charge, whilst driving on quiet roads away from peak times would cost very little.
Whilst this system is technically feasible it has significant downsides. It would be costly, bureaucratic and mean tracking of vehicles and their drivers on a scale that would make many fear 'Big Brother' style state intrusion intotheir lives. But above all full road pricing is considered by many to be politically unacceptable, and liable to see any party who implemented it rejected at the ballot box.
The Road Ahead Group have proposed a half-way house to road pricing that could possibly provide many of the benefits of full road pricing but with much less in the way of bureaucracy, invasion of privacy and political risk.
Under the proposals Vehicle Excise Duty (your tax disc) would be reformed as a flat rate tax, however drivers would receive a number of 'discount points' along with their tax disk. The points could be used to get a discount on the following year's tax disc, however driving within a 'peak zone' on any given day would mean the loss of a discount point and the associated saving the following year.
This system would see drivers who avoided peak zones receive a chunky discount on their tax disc, whilst drivers who regularly entered the zones would pay the full amount. Crucially the maximum amount anyone could pay would be the full cost of the tax disc, allowing the scheme to be presented as a way of saving money rather than an additional cost for drivers. The report's authors think this would make the scheme much easier to sell to the UK's drivers.
The report proposes to establish the peak zones as the areas of managed motorway now appearing across the road network. Managed motorways were pioneered on the M42 around Birmingham, and involve variable speed limits and hard shoulder running during times of road congestion. Managed motorways already feature numberplate recognition cameras to measure average speed, and it should be technically possible to use these to manage the discount points system.
The driver for this report, and other ideas for road tax reform, is the increasing congestion and delay we experience across the UK's roads network. Our roads are one of the only forms of transport where there is no peak time cost penalty. If you want to catch a train you'll find it's expensive (some may say extortionately expensive) to travel during the morning and evening peaks, whilst tickets during the day and the evening are often heavily discounted. This pricing differential, in theory, helps to manage demand – people only travel during the peaks if they really need to, whilst cheap tickets during the day help to fill trains that would otherwise by largely empty.
Our roads on the other hand have no price signal at all, if fact the only real signal they have for drivers is the amount of congestion they experience. If you want to drive round the M25 during the morning rush hour it'll cost you no more and no less than driving round in the middle of the night, but the congestions and lengthy delays just might put you off.
A road pricing system – even a halfway house as the Road Ahead Group propose – would help move us from road capacity managed by queuing to one managed by price. They key perhaps is explaining this to the everyday driver, and trying to make sure that the off peak users who will benefit make as much noise as the howls of protests that will be sure to come from rush hour drivers.