Road space is an asset like any other. Users should be charged for using it, at the point of consumption. That means a system of road congestion pricing, rather than the mixture of vehicle and fuel taxes that we have at present.
Our report The Road from Inequity shows that country dwellers pay far too much for road space, while urban road users pay far too little. Car users add to the congestion in towns, making public transport even less reliable and attractive, because there is no economic reason for them not to. The CBI has calculated that the consequent delays, pollution and accidents costs the country billions.
This is not to say that Ken Livingstone's scheme for London congestion pricing is a good one. It is a paper-based system, which means it has to rely on hard boundaries between the charged and the uncharged areas, causing many problems of parking and congestion for local residents just outside the boundary.
In our short report Charging Ahead, we favour a more flexible electronic system, which also allows vital traffic-flow data to be gleaned. Most of the benefits of road pricing can be gained by charging only the morning and afternoon peaks, allowing people to travel freely at less-congested times; but Livingstone’s charges are all day, leaving people no reason to come into town a bit later.
The issues and options around urban road congestion charging are detailed in our series of road pricing factsheets, and there's a review of international experience in our report and website Around the World in 80 Ideas.