On 10 September, ITS UK partnered with University College London (UCL) to host a discussion on Road User Charging (RUC).

The event, 60 Years Since Smeed, reflected on six decades of policy shifts, technological advancements, and changing public attitudes toward road pricing since the landmark Smeed Report of 1964. Experts from across economics, technology, Government, and academia gathered to explore how road user charging could be implemented in the UK.

Road Pricing: A Historical Perspective

What has happened since Smeed first wrote his report? Professor Emeritus Phil Goodwin shared a timeline of developments in RUC.

1964: The Smeed Report
The Smeed Report proposed road pricing as a means to manage road use but faced immediate opposition. The Treasury rejected the idea, as equity and distribution concerns were not considered central to the proposal.

1989: Revisions and Hypothecation
The concept of road pricing re-emerges, but amendments suggested it should be part of a broader strategy, with revenue earmarked for road construction, public transport, and other services. This shift acknowledged that pricing alone wasn’t enough—how the funds would be used was crucial.

1998: Congestion Charges & Parking Levys
Ken Livingstone’s introduction of congestion charges in London and Nottingham’s workplace parking levy set new precedents in road pricing, bringing the issue into public consciousness.

2004: Feasibility Study
A 2004 study outlined a decade-long implementation plan for road pricing, highlighting its complexity and long-term implications.

2006: The Eddington Transport Study
This pivotal study advocated for road pricing to reflect the marginal social costs of travel. It determined that road pricing could benefit the entire economy, not just the transport sector.

Road pricing today

Even with so much policy discussion, road pricing still seems like it is no by no means guaranteed. What has changed in recent years, however, is the electrification of the UK’s vehicle fleet, which will continue to impact fuel duty revenue.

Currently, fuel duty generates over £25 billion annually, accounting for some half of the cost of fuel. However, as electric vehicles (EVs), become more ubiquitous, the Government will need to find a way of replacing this revenue through a form of road charging.

So where are we today? Panellists at the event highlighted some key challenges any road pricing system will need to overcome:

• Public Perception and Selling the Concept: A major hurdle is how to present RUC to the public. The focus should be on explaining that people won’t necessarily pay more—they’ll just pay differently. Road user charging should be framed as a service, not a tax.
• Implementation Feasibility: When the Government decides to implement road user charging, the ITS sector must be ready to showcase practical, credible solutions for a nationwide rollout. Give how cost-effective fuel duty is as a tax, any RUC scheme will need to show simplicity and value for money.
• Dealing with the Politics: Political Strategists from Stonehaven suggested that road pricing must address political priorities, be effectively branded, and appeal to voters, the media, and policymakers. Coalition-building and seizing the right moment are essential for success. And, as Stonehaven suggested, it may be that ‘road user charging’ is not the best term to sell the concept to the public.

Learning from other countries

Neology, a company that manages toll systems in Europe, described the delicate balance needed for RUC success. It requires addressing concerns about acceptance, coverage, privacy, and the impact on fuel duty. But it can be done. Kapsch and Neology presented on their trials in Norway and Denmark respectively, where support for RUC is far higher and the public understand more the need, following a greater uptake in EVs. The political support in both countries shows RUC schemes can be implemented and even garner public backing.

Conclusion

The ITS UK and UCL event shed light on the evolving landscape of road user charging in the UK. As fuel duty revenue declines and the push for greener transport increases, RUC offers a potential solution to future transportation challenges. However, its success depends on smart policy design, public engagement, and strategic implementation. The lessons from 60 years of debate and discussion provide a roadmap for making road user charging a reality.

And finally…

We leave you with Professor Goodwin’s four RUC axioms, which give a great overview of the current state of play.

1. The ‘Paradox of Road Pricing’: It is a paradox to say we might use road pricing to fund projects that wouldn’t be necessary if road pricing already existed.
2. Road pricing isn’t inevitable: While road pricing is often discussed, it’s not guaranteed. It remains a possible but not inevitable solution.
3. Road pricing is probable: It’s a likely scenario in the future of transport policy.
4. The challenges without road pricing: A future without road pricing presents more complex issues than those posed by implementing it.