Taxes and charges on road users (HC 103-iv) Transport Committee 11 Feb 2009

Evidence given by:
2.45 The Royal Dutch Touring Club (ANWB); Ferry Smith, Public Affairs Manager
Federation of German Industries; Thomas Fabian, Senior Manager, Transport Policy
3.30 Department for Transport Paul Clark MP, Parliamentary Under-Secretary of State
HM Treasury Angela Eagle MP, Exchequer Secretary to the Treasury.

Q460 Mr. David Clelland: Mr Smith, I think all of us were intrigued when we listened to your presentation in the Netherlands about the proposals for a national price per kilometre charging scheme. Perhaps you could remind the Committee why an organisation likes yours, which is a motorist organisation, is supporting such a scheme?

Mr Smith: We support the general idea, the principle of the system in which motorists pay per use. Our members, which are about four million motorists in the Netherlands, feel that it is an honest way of paying for your mobility. Another argument to support the idea of the scheme is that we are not going to pay any extra in the Netherlands; we are only dividing the existing taxes in another way. We will abolish the circulation tax and the registration tax and that amount of money is divided over the kilometres driven yearly. A third argument is that for the Dutch situation we calculated that everyone driving less than 16,000 to 18,000 kilometres a year is better off than he is now in the system. There are strong arguments for our members to look seriously to the proposals being prepared by our government, and working with them together, to try to work it out in a way that is accepted. Of course, there are also some other societal aspects on this scheme because we want to decrease pollution and we want to decrease traffic jams. But, to be honest, if you go over with those arguments to the car driver, he is not impressed by it, because he feels those problems are a societal problem not a personal problem, so it is very important that we convince our government that if we do so that there should be some kind of benefit and the benefit, as I told you, is more or less an argument in itself to convince car drivers.

Q461 Mr. David Clelland: You say your members are in support of this. Have you conducted a poll of your members? What was the percentage of members in favour?

Mr Smith: It becomes a little bit complicated, but we had a poll of our members and, at this moment, 30% are in favour of the scheme presented and 70% are against it, or have doubts about it. We know, however, because the poll was done in two phases, in the second phase we gave some in-depth details of the scheme and some arguments, and when we did so, and we did it in three stages, we saw that the percentage turned around. If you do it very thoroughly and very well and give them good information, then people decide in favour of the system, but it is all is based on the fact that of course the devil is in the detail, when the system is worked out that it is as solid as we want it to be. We have defined 11 criteria and we have made those criteria very transparent to our government and to our members and if the system does not fulfil those criteria we do not have any agreement on it.

Q462 Mr. David Clelland: Are you confident that this scheme will go ahead?

Mr Smith: Just yesterday I met our Minister of Transport and my confidence grows by the day.

Q463 Mr. David Clelland: How confident are you that the technology behind this scheme will work?

Mr Smith: Well, that is of course a challenge for the industry. I have the impression that they can provide suitable technology for this system, but of course we will only know that in time. Just a couple of weeks ago the performance criteria for the system were delivered by our government, so in the next couple of months we will have to see if the industry succeeds in defining an affordable system.

Q464 Mr. David Clelland: Because this is a system which has to work on every road in the country, it has to work in all conditions, in the sense of cities with high buildings that may block signals. Will your drivers have confidence in its accuracy and its reliability?

Mr Smith: I think that the confidence in technology is great, but we have to combine this with good information. I have seen systems that even in very hard conditions do work, so it is possible.

Q465 Mr. David Clelland: These are systems which have been experimented with in Holland, have they? Where did you see these systems?

Mr Smith: They were presented to us in Holland. They were developed in Canada and in Israel. Those are the different systems which I have seen which do perform in very difficult situations.

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Q535 Mr. David Clelland: In the written evidence from the Treasury we are told that "Her Majesty’s Treasury continues to work closely with DfT to explore the potential for developing charging systems", yet the Minister has just told us that there are no plans for introducing road charging systems in the DfT. What is it that you are working on together?

Angela Eagle: Certainly the economic gains and productivity gains of reducing congestion are obvious to everybody so our interest as an economic department is more effective and efficient use of the road system. We sit on the Road Pricing Programme Board which is planning these early forays into practicality and demonstration projects and things like that.

Q536 Mr. David Clelland: Does the Treasury have a view on a national road charging scheme and have you conveyed that view to the DfT?

Angela Eagle: The Government has policies but there is not ---

Q537 Mr. David Clelland: The Government’s policy in 2006 was that the Prime Minister said it was a top priority.

Angela Eagle: These are very complex issues and there are all sorts of different technologies that could be brought to bear. We have to work our way through them in a very planned way so that we can see whether the practicalities are that the costs are going to be less than the benefits. The overall effect of the proper introduction of a road pricing scheme would be to gain benefits from reducing congestion, not to cost ourselves a whole lot of money and then not see any productivity gains, so we are at the analytical stage and we are at the looking at process and technology stage, so it is far too early to say that we can be ready to have a national road congestion scheme going in the next three or four years. So there is work ongoing and the Treasury takes a close interest in co-operation with the Department for Transport in that.

Q538 Chairman: But the work has been on-going for many years, has it not?

Angela Eagle: It is a complex area.

Q539 Chairman: We have raised this issue a number of times, so what has been learned and what are you still looking for?

Paul Clark: There have been various options going on, there have been various feasibility studies on managing and getting better use of our existing networks, but in terms of taking forward detailed work in terms of any scheme - in fact our guiding principle was of course what was laid out in the 2005 manifesto on which we fought the election, which was we would look at seeking a consensus in tackling that congestion and looking at ways in which you could do that, including the possibilities of a national system of road pricing. The point is that there would be a whole range of different schemes that are potentially possible in our minds, if I went around the table, where they should be implemented, whether they would work, and how does that happen. Is that provided by one provider, is there a range of different providers; those are issues that we need to know answers to as to what is possible, what is not possible and then you can make an informed decision, but we are not at that stage yet, we are a long way in fact from that stage as I have indicated. The demonstration projects will get under way this coming spring and we will start to get feedback of data from those within around about 12 months.

Q540 Chairman: You do not give the impression of any sense of urgency about this, or are you hoping this will all go away?

Paul Clark: One of the things I know 100% is that the issue of congestion is there now; we need to look at a whole range of different tools that we can use either nationally but more importantly at local levels to deal with the local issues in the best way with the best knowledge that is there locally to tackle those issues. Road pricing could be one of those schemes but what would be wrong would be to rush to introduce something that did not achieve what is a common goal of ours, to reduce that congestion and improve, clearly, the well-being of our transport system and the individuals that are trying to use it.

Q541 Mr. David Clelland: To what extent is the managed motorways programme, including hard shoulder running, an alternative to road user charging?

Paul Clark: What it is is something that we can introduce relatively quickly and, having undertaken a pilot on the use of hard shoulder running, we have recognised that we can increase the capacity and we can actually reduce the level of congestion very substantially by actually increasing that capacity and managing that capacity at peak times in various ways with a whole range of facilities around that ATM model. That will help and a few weeks ago in fact the Secretary of State announced further rolling out of that as part of a £6 billion programme in some of our most congested areas, for example the Birmingham box and so on is a classic example of where there will be hard shoulder running as well as the M1 and the M6 in Greater Manchester.

Q542 Mr. David Clelland: What estimates have you made about the additional capacity we can expect from hard shoulder running and how long will that last before it is used up?

Paul Clark: In terms of the monitoring that we have done through the transport model that we have, we have been able to assess that in terms of motorways at peak times you could actually reduce the congestion by some 50%, which will obviously bring about further time savings in terms of congestion. There are then modellings in terms of forecast of growth and in terms of transport requirements as well, but certainly the business about utilising, for example, hard shoulder running and also other facilities in terms of management tools of flows onto and from motorways and strategic networks obviously help to improve the flow substantially by relatively small reductions.

Q543 Mr. David Clelland: Is it the Department’s policy to put in place a national standard for motorways and should they all be three lanes with a hard shoulder, because there are some areas with very congested roads - I just pluck one out of the air, the Gateshead Western Bypass, which is a two-lane motorway with no hard shoulder. What are you going to do about that?

Paul Clark: You will accept that in terms of specific roads there are possibilities that can be introduced but of course you cannot have hard shoulder running on a dual carriageway if there is not a hard shoulder in the first place, so you have to look at other options and ranges of options there, and which I know you are well aware have been looked at. Obviously what you have to do is look at where it is most beneficial - and that includes safety options as well - to introduce hard shoulder running on whatever stretch of road we are talking about, but also being able to introduce other management techniques in terms of flows of traffic as well.

Q544 Mr. David Clelland: If we are going to have an efficient national motorway network surely it should all be up to a minimum standard.

Paul Clark: The investment that we are putting into clearly our network - we have some of the safest roads in Europe and that obviously shows that the standards ---

Q545 Mr. David Clelland: It shows that we are standing still.

Paul Clark: It shows that the standards are high in terms of the provisions we have made and that the way we have developed our strategic road network has in fact been to a high standard, and of course that has improved. Speaking in terms of the time that has been taken to roll out some of these improvements to help to tackle the congestion issue is very much about making sure that the pilots that we have undertaken have been robust in answering exactly some of the issues that are obviously a cause for concern to this Committee and to others in terms of safety and efficiency and of course value for money in terms of the investment that goes into it, whether it is hard shoulder running or whether it is conventional widening of our motorway network and strategic roads.

Q546 Mr. David Clelland: I hope it is going to take a bit less than the 25 years it has so far taken to resolve the problem I have just referred to.

Paul Clark: We work on these problems.

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Q572 Mr. David Clelland: Is funding beyond TIF going to be dependent on whether or not the likes of Newcastle, Tyne-and-Wear and areas like that actually accept a road charging scheme?

Paul Clark: No.

Q573 Mr. David Clelland: Is that not what happened in Manchester?

Paul Clark: The Transport Innovation Fund has always been an additional stream of money that is linked to demand management and investment in public transport, but that is over and above the funding streams that are still there in terms of local transport plans and in terms of regional funding allocations - indeed, Manchester is still receiving the moneys to go into the Metrolink extension to Rochdale and Oldham. That is still happening and that will still be the case.

Mr. David Clelland: But additional money was promised if the congestion charge was brought into Manchester.

Q574 Chairman: That is still there.

Paul Clark: That is still there.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

The full transcript may be read here.