‘Fair distance-based’ road charge idea when £250,000 prize
An idea for ‘safer and more reliable roads’ by scrapping
Vehicle Excise Duty and fuel duty and introducing a ‘fair distance-based charge’ has won a recent
graduate from UCL the £250,000 2017 Wolfson Economics Prize.
Prize posed the question: ‘How can we pay for better, safer, more reliable
roads in a way that is fair to road users and good for the economy and the
Raccuja entry, “Paying for Road Use could be Miles Better”, went head to head
on a shortlist of five, judged by senior policymakers including the former
Chancellor of the Exchequer Lord Darling.
entry argued that to restore trust between politicians and motorists, fuel duty
and Vehicle Excise Duty should be scrapped and replaced with a simple and fair
distance-based charge that also captured road and environmental impacts.
lighter and cleaner the vehicle, the lower the per mile charge. The system, it
was claimed, would boost investment and update the way roads functioned ready
for a new generation of electric and autonomous vehicles.
won’t be asked to pay more overall, paying in proportion to the distance they drive
each year. The charge would be collected by insurers who already managed all
data necessary for calculating the charge. When a driver paid their insurance,
they would also pay their ‘road bill’, thus avoiding issues of privacy and
reducing administration costs.
Office of Rail and Road would ensure drivers were guaranteed fair treatment by
setting the base charge and ensuring a fair proportion of the proceeds were
ring-fenced for spending on both local and national highways, pledging a
“pothole-free Britain” within five years.
Treasury won too, according to Mr Raccuja. With both the number of vehicles on
the road and total vehicle mileage projected to grow, government revenue would
rise over time. That, it is claimed, would stop and reverse the growing loss to
the Treasury from falling fuel duty, estimated at an extra £2.3 million a day.
his final submission, Mr Raccuja received input from the RAC Foundation, one of
Britain’s largest motoring organisations.
2017 Wolfson Economics prize, the third to be run, received more than 120
entries from seven countries.
Mr Raccuja said: “I’m over the moon. The key to our
entry was to keep things simple, yet come up with an answer that
was sophisticated enough to deal with an upheaval in cars and
road transport which hasn’t been seen since the introduction of the motor
car well over a century ago. I hope I can persuade our politicians too
that everything to do with our roads could be better.”
Director of the RAC Foundation, Steve Gooding said: “The really crucial thing is what happens
next. The common themes of several entries have been both
the pressing need for change and the belief there is a better
option to balance what drivers contribute to the finances of the country
and what they get in return.
if policy makers aren’t immediately persuaded by our arguments
they know the clock is ticking for them to show they have got a plan
that offers the country’s tens of millions of drivers a fair deal and keeps the
country moving in increasingly challenging times.”
The founder of the Prize, Lord (Simon) Wolfson of
Aspley Guise, said: “The
2017 Wolfson Economics Prize sought a better way to pay for better roads as
congestion, pollution and potholes remain a source of daily misery for millions
of people: undermining our economy, environment and quality of life.
entry met that challenge, and is ground-breaking, yet simple - with the backing
of a major motoring organisation.
can learn much from this year’s Prize, and I hope they will take forward
solutions to solve one of the greatest infrastructure challenges of modern