Pricing in Practice — Charging for Roads

Abstract

The most important form of transport infrastructure in Britain, as in most countries, is the road system. The theoretical pricing problems that have been discussed can be illustrated by examining some of the main issues involved in charging for road space. Although some countries, notably Italy and the United States, charge directly for the use of motorways, the adoption of a toll system has so far been rejected in Britain. A Ministry of Transport memorandum presented to the Trunk Roads and Motorways Estimates Committee gave reasons for refusing to use tolls [10]. The chief objections were the costs of collection, and the likelihood of diverting traffic to other congested roads with a consequent reduction in the level of the benefits obtained from the tolled road. Work carried out by the Road Research Laboratory suggested that the conversion of an existing motorway like the Ml to toll charging would result in collection costs equal to approximately 25 per cent of the revenue from the toll, though the figure would be lower on a road designed to have toll booths. The Ministry memorandum gave official recognition to the existence of consumer surpluses by arguing that tolls paid would not measure the benefit received from a motorway adequately because ‘… the payment of a toll is an indication only of the minimum benefit derived by the toll-payer from the facility; in most cases the benefit would be considerably higher’ [10].