Paying for road use

This paper by Professor David Begg discusses the challenges involved in implementing road pricing.

The dilemma and the challenge we face in paying for roads is how to achieve the economic and environmental objective of ensuring that road users cover their external (social costs) while at the same time winning public and political acceptance. Economists believe that many road users are paying too little road tax as they don’t in aggregate cover their external costs (mainly congestion and pollution). However, the public feel they are paying too much in road taxation.

Begg argues that there would be little appetite at Whitehall for a “Big Bang” approach to changing the way we pay for roads. The risks are too high both in term of public acceptance and the precariousness of introducing new technology.  He recommends an incremental approach which in the first phase would entice road users to opt in to a new way of paying for roads, which in return would exempt them from paying fuel duty and VED.