Smart Road Pricing

Sarah Olney Excerpts

Wednesday 9th March 2022 Westminster Hall

[Sarah Olney (Richmond Park) (LD)]

It is a pleasure to serve under your chairmanship, Sir Charles. I welcome this debate and congratulate the hon. Member for Carshalton and Wallington (Elliot Colburn) on securing it. He will be interested to know that the Liberal Democrat leader of Sutton Borough Council would agree with many of the points he has raised. She wrote to the Mayor recently about this issue, highlighting the points raised by the hon. Member for Carshalton and Wallington about the lack of public transport in Sutton and how that needs to be addressed before further plans for road pricing can be progressed.

The hon. Gentleman’s constituency and mine face many of the same issues. My constituency also lies in the suburban outskirts of London and has relatively high car usage. I certainly sympathise with some of his remarks and concerns about taxes imposed on car users. My constituents also have reservations about the ultra low emission zone, which has been in place since late October and cuts right through the middle of my constituency. I welcome any move to improve air quality, but it has created issues by cutting people off from essential services such as Mortlake crematorium and Townmead recycling centre.

Despite my reservations about the arbitrary boundary divisions of the ULEZ, I firmly believe that action needs to be taken to dissuade car usage. I am strong advocate for the implementation of a simpler, fairer and more sustainable road pricing solution. London is extremely congested, our air quality is poor, and current levels of car usage cannot be maintained if we are to achieve our net zero goals. A report published by the Greater London Authority earlier this year found that car traffic must reduce by at least 27% across the capital, in order to achieve net zero by 2030.

There is a cross-party consensus that some kind of road pricing scheme that charges motorists on a per-mile basis would be beneficial, especially in London. It now seems inevitable that such a scheme will be implemented in due course. Current taxes on fuel and vehicle ownership will raise nearly £37 billion this year, but those revenues will dwindle as fossil fuels are replaced by zero-emission alternatives. The need for change is pressing if the Government are to retain current levels of tax revenue while also reducing toxic air pollution and cutting congestion.

The majority of road users would be set to benefit financially from smart road pricing. Those who are not high mileage users would bear only a small cost if other road charges and vehicle excise duty were removed.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

The hon. Member is making some good points about London, but I urge her to think about the solution recommended by the Transport Committee that this should be at national level. Certainly, those people who live in rural communities and counties outside metropolitan areas could be very adversely affected by per-mile road pricing. It could, in fact, put people out of work; it could affect the ability of families to take their children to school and all sorts of other issues. I urge her to look at that and consider it in the suggestions and remarks she makes to the Minister.

[Sarah Olney]

The hon. Member raises an important point. What we are trying to achieve is a certain amount of equity. He is absolutely right about the contrast between rural and urban car usage and ownership. Although my remarks focus on what might be best for my constituents, I accept that it would be an entirely different matter in his part of the country. Per-mile road usage charging may not be the most equitable solution across the country. Certainly, for my constituents, a per-mile scheme would mean less cost than now in terms of the taxes they pay on petrol and vehicle excise duty.

Polling undertaken by YouGov for the Institution of Civil Engineers in 2019 suggested that a pay-as-you-go model of road pricing has popular support—47% of British adults stated that they would support a pay-as-you-go model if it replaced both vehicle excise duty and fuel duty, and just 23% opposed. For those living in urban areas, the first means of transport should automatically be public transport but, presently, in constituencies such as Richmond Park, and Carshalton and Wallington, public transport is both underfunded and unreliable.

It is not right that those who use cars simply because they have no other practical way of getting around should face large increases in taxes. Any new road pricing scheme must also be matched with adequate investment in public transport. In London, that begins with a long-term funding settlement for Transport for London. Constituencies on the outskirts of London require a central London-style public transport system that allows my constituents and others to travel across the borough and between neighbouring boroughs easily and quickly, in order to decrease car usage.

In addition to public transport options being made available, they must also be accessible and affordable. This month, the Government have increased rail fares by 3.8%, with another increase set for July. The Liberal Democrats have proposed to scrap this rail fare increase and to further implement a five-year freeze on fares to encourage people in urban areas out of cars and on to trains. If residents in urban areas are properly supported to reduce car usage through increased availability of affordable public transport, a smart road pricing scheme can offer a fair alternative to current vehicle and fuel duties. Such a scheme will be coming in some form. In principle, I think we can all agree it is necessary.

The conversation must now focus on how we can best support our constituents to reduce car usage and to ensure that the design of any road pricing scheme is given adequate consideration. Consultation must be undertaken with key stakeholders to avoid unfairly disadvantaging car users with no other practical means of transportation.

[Gareth Bacon (Orpington) (Con)]

It is a pleasure to serve under your chairmanship, Sir Charles. I thank my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) for securing this important and increasingly topical debate.

Finding new ways to justify charging motorists to drive their cars is becoming increasingly fashionable among certain politicians in this country, especially in London. Just last week, the Mayor of London, Sadiq Khan, announced a consultation on expanding the ultra low emission zone to the Greater London boundary. He claims, of course, that it is to do with air quality and congestion, but it is not.

I am holding up a map taken from Transport for London’s website at the time when it was investigating setting up the ultra low emission zone. There is a colour code. Yellow is the legal limit for air pollution in London. The worse the air gets, the redder or more orange the map gets; the better the air gets, the bluer or greener it gets. As hon. Members can see, bad air quality is located in central London, around Heathrow airport and on some of the trunk roads into and out of those areas. There is not bad air quality outside the North and South Circulars or in outer London.

The expansion of the zone is actually about raising revenue—not surprising, given the financial mess that Transport for London is in. It is true, of course, that the pandemic hurt Transport for London grievously, and it would not be sensible to deny that. However, a catalogue of blunders preceded the pandemic, such as the unaffordable fares freeze, which, by its own calculation, cost Transport for London at least £640 million although likely much more. There was the failure to maximise the commercial revenue for Transport for London and of course the complete mess that Sadiq Khan made on the oversight of Crossrail. The Mayor’s TfL business plan was predicated and extremely reliant on the revenue that Crossrail was going to deliver if it was on time and on budget. But thanks to the Mayor’s failure to adequately scrutinise Crossrail despite his role as chairman of Transport for London, which is the overseeing body, TfL is now short of billions of pounds of fares revenue that it would otherwise have raised.

Expanding the ultra low emission zone to the Greater London boundary will have shattering consequences for people living in outer London. It will cost the owner of an older vehicle who uses it every day £4,500, even before they have paid for fuel or road tax. That will hit everybody, of course, but the poorest Londoners—those less able to replace their vehicles—will be hit hardest.

[Sarah Olney]

I just want to challenge the hon. Gentleman on the point that the charge will hit everybody. Obviously, I have experience of ULEZ coming into my constituency. It applies only to diesel vehicles and petrol vehicles over a certain age. I was worried about the impact, but I have to say that the number of people actually affected has been much less than I thought.

[Gareth Bacon]

The hon. Lady is correct. The charge will hit petrol vehicles registered in 2006 or before; as I just said, poorer Londoners will own those. It will hit diesel vehicles registered in 2014 or before. A car registered in 2014 is not particularly old. I had a diesel vehicle that was registered in 2012, which I got rid of the minute Sadiq Khan was elected Mayor of London. I knew that the charge was coming, that it would be unaffordable and that there would soon be no second-hand market for the vehicle. I was fortunate enough to be able to afford a newer car, but many people in London will not be able to, and the charge will hit them. The point that I have made using the map in my hand is that the charge will be hitting them completely unnecessarily.

There will be a devastating hit on an economy struggling to recover from the pandemic—for no reason. This is the thin end of the wedge. We know that Sadiq Khan’s ultimate ambition is to introduce road pricing in London. He has not hidden that. The letter to every London MP accompanying the announcement of the ultra low emission zone actually said that his ultimate objective was to replace all forms of charge in London with a road pricing scheme. The Mayor’s transport strategy of 2018 says that he will give consideration to the development of

“the next generation of road user charging systems. These could replace schemes such as the Congestion Charge, Low Emission Zone and Ultra Low Emission Zone. More sophisticated road user charging…could be used to contribute to the achievement of the policies and proposals in this strategy…to help reduce congestion on the road network and support efficient traffic movement. In doing so, the Mayor will consider the appropriate technology for any future schemes, and the potential for a future scheme that reflects distance, time, emissions, road danger and other factors in an integrated way.”

In the same document, which is revealing of the Mayor’s thinking, he says that people need to address

“the fundamentally inadequate and unfair way in which road use is paid for in London, with motorists paying too little, and in effect being subsidised by public transport fare payers. Measures such as road user charging (where appropriate), land value capture and the devolution of financial powers to local level are essential to delivering an efficient and fair funding system.”

I want to concentrate on the claim that motorists are subsidised by public transport users. That claim simply does not stack up. Setting aside the fact that most Londoners use a mixture of travel modes and cannot easily be categorised as motorist, pedestrian or cyclist, it is notable that at the time at which the strategy was launched, the Transport for London annual bus subsidy amounted to £722 million and, in addition, Transport for London provided in excess of £318 million for concessionary travel across its network, taking the level of publicly funded subsidy to well over £1 billion per annum. By contrast, London’s 2.6 million drivers were collectively paying £1.9 billion in motoring taxes, so I do not see how the Mayor can make the claim that motorists are being subsidised by public transport users. It is actually very much the reverse.

For many people, driving represents freedom. We should not be sanguine about the state seeking to undermine people’s ability to get into their own car and drive directly to wherever they want to go. Owning or having access to a car can significantly increase an individual’s travel opportunities, but road pricing is a policy that seeks to curb, undermine or remove that.

I would like to make a further point regarding freedom and it touches on a point that my hon. Friend the Member for Carshalton and Wallington made in his introductory remarks. The technology required to make this form of road pricing work would almost inevitably have to include some form of global navigation satellite system technology. In other words, there would have to be in every vehicle a black box that would be capable of identifying exactly where each car had been located at any given time. That creates both practical and civil liberties considerations.

In practical terms, there is the question of how the technology would be imposed on those driving in London—if indeed we are talking about road pricing solely in London. Currently, some British motorists choose to install a black box in order to get cheaper car insurance, but a situation in which the technology was mandatory would be very different. How would the Mayor ensure that anyone who wished to drive in London had a black box in their car? Londoners drive around London, but people from outside London also drive across the Greater London boundary, so how would that work? Trying to introduce road pricing in Greater London alone, rather than in the whole of the UK, would be, as has been touched on by colleagues, fraught with difficulties for that very reason. In terms of civil liberties, many people would be very uncomfortable with the idea that the state might be able to track their every move via their car. As yet, that issue has not been addressed by anyone advocating any form of road pricing.

Therefore there are significant economic, practical and civil liberties problems with this idea, but it is the impact on people’s everyday lives that merits the highest consideration. If Sadiq Khan tries to force Londoners out of their cars by increasing the cost of driving, he will inevitably catch those who have little choice but to drive. Even if there are exemptions for specific individuals —for example, blue badge holders—there will still be ordinary Londoners who need to drive but can no longer afford to do so. For a great many of my constituents, in common with those of the hon. Member for Richmond Park (Sarah Olney) and of my hon. Friend the Member for Carshalton and Wallington, a car is an essential feature of their everyday lives, not least because there are few genuine alternatives for many journeys. In much of outer London and particularly in south London, the choice for those using public transport is the train or the bus. Trains are mostly a radial option; they are very useful for travelling into central London, but they are of little use if people want to make an orbital journey. Buses are much more useful for orbital journeys, but by their very nature, they are both relatively slow and often indirect. Many Londoners feel that their car is their best option for journeying outside London. That is particularly the case when the public transport alternative would involve travelling into central London and then out again. Road pricing, even if applied only to the London-based section of a journey, would increase the cost of those journeys without doing anything to improve them.

In conclusion, it is not a surprise that the current Mayor of London would prefer to squeeze more money out of Londoners and, ideally, outer Londoners, who are less likely to vote for him. Nor is it a surprise that he should seek to dress this cash grab up with high-minded justifications about air quality and emissions. Such a policy is fraught with difficulties and has so many downsides that it should be a non-starter, but if the Mayor of London decides to proceed with expanding the ultra low emission zone or, worse, introduce per-mile road charging, the Government should step in and stop him.