Road pricing good for drivers, says new report


  • A new report today highlights the poor deal that British motorists are currently getting. Drivers currently pay £40bn per year in fuel duty and road tax yet face potholes, traffic jams and endless roadworks.
  • The report argues that road pricing would be better, but only if it is designed to help motorists rather than to tax them off the roads.
  • A new system of road pricing should replace fuel duty and road tax. Road pricing should not be used to raise more money for the Government.


Road pricing could improve the lives of drivers as well as commanding public support, concludes a new report from Policy Exchange, the UK’s leading think tank.

The report, A New Deal for Drivers, says that average road speeds around the UK’s cities are painfully low, damaging economic growth and forcing people to endure long commutes or to miss out on the best jobs. The report is authored by Ben Southwood, a Senior Fellow at Policy Exchange.

Drivers rightly feel hard done by when Governments propose schemes to impose yet further taxes on them without showing the clear benefits that will result. Both polling and evidence from around the world show that drivers can support improvements to the systems by which they pay for the roads, but only when these schemes do not treat their welfare as an afterthought.

Successful road pricing experiments around the world show that it does not need to force drivers to shift to public transport or to cycle, but mostly leads to journeys being more evenly spread around the day. Those who can work from home or work flexible hours tend to shift their driving time.

If road pricing is to win popular support, it must be clearly designed around and sold on the following six principles:

  1. No net additional costs to drivers on average i.e., revenue neutral compared to current total fuel duty and Vehicle Excise Duty;
  2. Most drivers should pay less under road pricing than they paid in fuel duty and road tax; in particular rural drivers and those in ‘left behind’ areas must pay less;
  3. The scheme must not rely on a shift to public transport or other transport modes;
  4. Nearly all drivers will be better off overall given the benefits of free traffic flow—all or nearly all drivers will experience faster roads;
  5. Improved safety of modern cars means that the Government should commission a study to assess whether speed limits on motorways can be safely raised to 80 mph;
  6. More of the budget should be shifted towards road improvements, road building, and infrastructure such as bridges and tunnels.

Road pricing in the UK should be implemented through location-tracking technology in cars. This system should be backed up by Automatic Numberplate Recognition (ANPR), as is currently done with Vehicle Excise Duty and car insurance.

In the Foreword to the report, Julian Glover OBE, journalist, author and former Special Advisor in the Department for Transport and 10 Downing Street, wrote:

“A few years ago, I was enthusing to a reforming Prime Minister about the many merits of road pricing. It could cut carbon, I said excitedly. It might fix potholes, I added. It would save billions in wasted congestion, I explained. He looked at me with the look of someone who had come to learn the difference between policy and politics. ‘It’s a brilliant idea, of course. Everyone agrees. I certainly do. But it will never happen’.”

“Losing revenue as more cars go electric, while picking up all the costs of our road network, isn’t just fiscally foolish. It is also a route to a transport system that’s starved of cash, as we can already see happening in the run-down nature of much of our local and major road network. That’s why this contribution to the debate is so timely.”

“We can pay for our roads in a more sensible and effective way and one day we will. Once we get there, we will wonder why we waited so long to change. In a year or two, political advisers will be at work on General Election manifestos. A better way to pay for better roads should be at the top of the list.” 

Ben Southwood, Senior Fellow at Policy Exchange, and author of the paper, said:

“Economists have agreed for decades: without road pricing we’ll never tackle rush hour traffic in cities. Without tackling rush hour traffic, our cities will always underperform. But they have consistently failed to make headway in the public debate because they have never understood how deeply people value the freedom that their car gives them. This has always seemed like an intractable tug of war, but if you put the interests of drivers first then I believe you can come up with a version of road pricing where they are the chief beneficiaries.”




Notes to editors


A New Deal for Drivers is available here

Road pricing and congestion charging operate successfully in many places, including Singapore, Valletta (Malta), Stockholm, Gothenburg, Milan and London. These examples are explored in the report.

Policy Exchange is the UK’s leading think tank. As an educational charity our mission is to develop and promote new policy ideas which deliver better public services, a stronger society and a more dynamic economy.

For more information about the report or to speak to the author, please contact:

Amy Fisher, Director of Policy and Communications, Policy Exchange:, 07799 624 594

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