Road pricing in the United Kingdom

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Entering the London congestion charge At Old Street with road markings, showing inset Sign. London Congestion Charge, Old Street, England.jpg
Entering the London congestion charge At Old Street with road markings, showing inset Sign.

Road pricing in the United Kingdom used to be limited to conventional tolls in some bridges, tunnels and also for some major roads during the period of the Turnpike trusts. The term road pricing itself only came into common use however with publication of the Smeed Report in 1964 which considered how to implement congestion charging in urban areas as a transport demand management method to reduce traffic congestion.[ citation needed ]

Contents

Road pricing schemes in place in the UK as of 2012 include road congestion pricing in London and Durham; the London low emission zone which is a pollution charge scheme only affecting trucks with less efficient engines entering London; and the M6 toll, the only existing toll road on a strategic road in the UK. The Dartford crossings toll was retained as a demand management tool in 2003.

The various local and any national road pricing schemes were promoted by the 19972010 Labour government which were then abandoned following strong public opposition. A heavy goods vehicle (HGV) road user charging scheme had been proposed by the 20102015 coalition government together with a suggested new ownership and financing model to fund new road construction.

History

In the 1960s the Smeed Report considered how to implement congestion charging. [1]

In September 2002, the Durham congestion charge, England's first congestion charging scheme was introduced. It was restricted to a single road in that city, with a £2 charge. [2] [3] In 2003 the London congestion charge was introduced.

In November 2003, Secretary of State for Transport Alistair Darling said that despite apparent initial interest from many city councils, including those of Leeds, Cardiff, Manchester, Birmingham and Bristol, no city apart from Edinburgh had yet approached the Government for assistance in introducing a charge. [4]

The Western Extension of the London congestion charge was introduced in 2007 (and withdrawn on 1 January 2011).

In July 2008, the Drivers' Alliance was established, an organisation which has subsequently campaigned against the introduction of a number of schemes. [5]

Design considerations

Finance models

There are no multiple zones in operation in the UK; when it was decided to extend congestion charging from central London to include the West End of London, there was some discussion about having two zones running side-by-side. However, the Western zone was introduced by simply extending the area of the earlier London zone and use the same charges and conditions for simplicity.

Edinburgh seriously considered a two-cordon road pricing scheme but rejected it in 2005 after a public referendum. [6]

Tolls and Shadow tolls.

Metering and billing

The Durham scheme uses an automated toll booth, [7] while London uses a remote system based on CCTV and automatic number plate recognition. [8]

The costs of tracking and billing are very large; for the remote monitoring of the London scheme the majority of the income raised is absorbed by the costs. There are suggestions that a wireless "tag and beacon" scheme could be introduced as a potentially better and cheaper alternative. [9]

Privacy

Although the more recent Data Protection Act now gives a framework for the responsible collection of personal data in the UK, the privacy concerns identified in the Smeed report were not addressed by the London scheme, with fears expressed over mass surveillance [10] and abuse of the systems. [11]

Current schemes

Road pricing

There are also the following traditional toll roads in Great Britain in operation: M6 Toll, Clifton Suspension Bridge, Humber Bridge, Mersey Tunnels, Tyne Tunnel and a few others on more minor roads.

Proposed schemes

HGV road user charging

In 2012 the government announced that it was consulting on introducing a heavy goods vehicle (HGV) road user charging scheme, known as the 'HGV Road User Levy' in order to ensure that foreign hauliers make a contribution towards the upkeep of British roads. [14]

The HGV Road User Levy Bill, [15] legislation to introduce a time based charging scheme, was brought into Parliament in October 2012, and subsequently passed, receiving Royal Assent in February 2013. The levy scheme will charge all HGVs weighing 12,000 kg or more is due to be introduced from April 2014. Under the scheme, the largest heaviest vehicles will pay up to £10 per day, or £1,000 per year to use roads in the UK.

The levy was suspended in August 2020 as a measure to support hauliers affected by the coronavirus pandemic, [16] but levy payments will be resumed on 1 August 2023. [17]

New ownership and financing models (2012)

In a speech in April 2012 the Prime Minister, David Cameron spoke of the urgent need to fund more road construction, proposing road tolling for new roads as one answer. He also mentioned the possibility of shadow tolls and new ownership and financing models. [18] Shadow tolls are fees paid to a road maintenance company per driver using a road, but the fees are paid by the government rather than drivers. [19]

Nationwide road pricing (2012)

A 2012 study by the Institute for Fiscal Studies (IFS) funded by the RAC Foundation found that the government's drive to promote green vehicles with a lower carbon footprint could result in a significant loss of revenue from motoring taxes, estimated at £13 billion by 2029 at current prices, according to forecasts by the Office for Budget Responsibility. This revenue decline is partly due to improved vehicle efficiency and the growth of plug-in electric vehicles. Among the options available to the government to offset the loss, a further increase of the duty on petrol and diesel or the introduction of new taxes on alternative energy sources such as electricity for vehicles were considered. However, due to lack of popularity of the former and the risks of hindering the entire green vehicle strategy, the IFS study recommended to introduce a nationwide system of road pricing to charge drivers by each mile driven, with higher pricing in congested areas at peak times, while reducing the existing motoring taxes. Under this strategy drivers in the countryside would be likely to pay less, as rural motorists are currently overtaxed according to the study. [19] [20] [21]

Road charging by the Welsh Government (2021)

In January 2021, the Welsh Government consulted on introducing possible charges on trunk roads and motorways across Wales as part of their White Paper on a Clean Air (Wales) Bill. [22] The charges would likely apply across Wales and apply numerous emissions-based charges across numerous vehicle categories. The bill directly gives both local authorities and the Welsh Government powers to introduce charging schemes on different roads across Wales. This has, however, met strong opposition from the Welsh Conservative Party, of whom disagree with all possible toll charges being applied on Welsh roads and has been a strong point in their 2021 Senedd election campaign, especially in North Wales. [23]

Earlier proposals

HGV Road user charging (2000–2005)

The Labour administration first proposed HGV road user charging in 2000 with encouragement for the Conservative opposition. [24] A Treasury progress report was published in 2002 [25] followed by a second report in 2003. [26] In 2005 the government announced that it was halting the development of the scheme and would be progressing with the development of a National road pricing scheme covering all vehicles, a scheme which was itself abandoned in 2009. [24]

Primary legislation, titled 'The Heavy Goods Vehicles (Charging for the Use of Certain Infrastructure on the Trans-European Road Network was however enacted in 2009' [27] in response to an EU Directive. [24]

Local schemes 2005–2008

Edinburgh 2005

Edinburgh City Council proposed a congestion zone, but this was rejected in a postal referendum by around 75% of voters in Edinburgh. [28] Unlike in London, where Ken Livingstone had sufficient devolved powers to introduce the charge on his own authority, other cities would require the confirmation of the Secretary of State for Transport. [4] Manchester proposed a peak time congestion charge scheme which would have been implemented in 2011/2012. [29] [30] This was rejected in a referendum held on 12 December 2008 by over 70% of voters. [30] [31] Plans for similar charges in both the West Midlands and East Midlands have also been rejected. [32] [33] The government has proposed a nationwide scheme of road tolls, but public opposition has been fierce and included a petition of nearly 2 million signatories on the 10 Downing Street website. [34] In an article in the Sunday Times in December 2007, the author describes how he believes that the failure of the London scheme, in terms of value for money, could undermine the Government's desire to convince other parts of the UK to introduce similar schemes. [35]

The scheme was rejected in a public referendum in February 2005. [36]

Manchester 2007

A scheme similar to the one in London was proposed in Manchester, covering a wider area but with a much smaller daily charging window covering the morning and evening rush hours. However, this was overwhelmingly rejected when voted upon in Greater Manchester. [37]

Cambridge 2007

A scheme for Cambridge is currently under consideration and the subject of heated public debate, [38] with council surveys showing that a majority of Cambridge-area residents reject the scheme. [39]

West Midlands 2008

In March 2008, councils from across the West Midlands, including those from Birmingham and Coventry, rejected the idea of imposing road pricing schemes on the area, this was despite promises from central government of transport project funding in exchange for the implementation of a road pricing pilot scheme. [40]

East Midlands 2008

Similar schemes proposed for cities in the East Midlands have also been dropped. [41]

National road pricing proposal (2005–2007)

Extensive studies were done in 2005 related to a proposed national scheme for the UK, with an aim to implementation at the earliest around 2013. [42] In October 2005 the UK government suggested they explore "piggy-backing" road pricing on private sector technologies, such as usage based insurance (also known as pay-as-you-drive, or PAYD).[ specify ] This method would avoid a large-scale public sector procurement exercise, but such products are unlikely to penetrate the mass market.

If introduced, this scheme would likely see a charge being levied per mile depending on the time of day, the road being driven along, and perhaps the type of vehicle. For example, a large car driving along the western section of the M25 in rush hour would pay a high charge; a small car driving along a rural lane would pay a much lower charge. The very highest charges would be likely in the most congested urban areas.

It is expected that rural motorists would benefit the most from such a scheme, perhaps by paying less through road pricing than they do at present through petrol and car taxes, whereas urban motorists would pay much more than they presently do. However, this is highly dependent on whether such a scheme would be designed to be either revenue neutral or congestion neutral. A revenue neutral scheme would replace (at least in part) petrol and vehicle taxes, and would be such that Treasury revenue under the new scheme would equal the revenue from current taxes. A congestion neutral scheme would be designed so that growth in congestion levels would stop as a result of the new charges; the latter scheme would require significantly higher (and increasingly higher) charges than the revenue neutral scheme and so would be unpopular with the UK's 30 million motorists.

The carbon emission consequence of moving from fuel duty to a charge per mile has been raised as a concern by some environmentalists, as has any diversionary response from heavily trafficked (and hence more expensive) roads.[ specify ] The UK government announced funding for road pricing research in seven local areas in November 2005. [43]

In June 2005, Transport Secretary Alistair Darling announced the current proposals to introduce road pricing. [44] [45] Every vehicle would be fitted with a satellite receiver to calculate charges, with prices (including fuel duty) ranging from 2p per mile on un-congested roads to £1.34 on the most congested roads at peak times. [46]

A 2007 online petition against road pricing attracted over 1.8 million signatures, equivalent to 6% of the entire driving population. Over 150,000 signatures were added during the last day before the petition closed on 20 February 2007.[ specify ] In reply, the prime minister e-mailed the petitioners outlining his rationale, denying that the proposals were to introduce a stealth tax or increase surveillance, and promising 'debate' before a decision was made as to whether to introduce a national scheme. [47] Also, in a recent poll 74% of those questioned opposed road pricing. [48]

See also

Related Research Articles

<span class="mw-page-title-main">Transport economics</span> Branch of economics

Transport economics is a branch of economics founded in 1959 by American economist John R. Meyer that deals with the allocation of resources within the transport sector. It has strong links to civil engineering. Transport economics differs from some other branches of economics in that the assumption of a spaceless, instantaneous economy does not hold. People and goods flow over networks at certain speeds. Demands peak. Advance ticket purchase is often induced by lower fares. The networks themselves may or may not be competitive. A single trip may require the bundling of services provided by several firms, agencies and modes.

<span class="mw-page-title-main">Dartford Crossing</span> Tunnel and bridge between Kent and Essex, UK

The Dartford-Thurrock River Crossing, commonly known as the Dartford Crossing and until 1991 the Dartford Tunnel, is a major road crossing of the River Thames in England, carrying the A282 road between Dartford in Kent in the south and Thurrock in Essex in the north.

<span class="mw-page-title-main">London congestion charge</span> Fee for vehicles entering Central London

The London congestion charge is a fee charged on most cars and motor vehicles being driven within the Congestion Charge Zone (CCZ) in Central London between 7:00 am and 6:00 pm Monday to Friday, and between 12:00 noon and 6:00 pm Saturday and Sunday.

<span class="mw-page-title-main">Road pricing</span> Revenue generation for road infrastructure

Road pricing are direct charges levied for the use of roads, including road tolls, distance or time-based fees, congestion charges and charges designed to discourage the use of certain classes of vehicle, fuel sources or more polluting vehicles. These charges may be used primarily for revenue generation, usually for road infrastructure financing, or as a transportation demand management tool to reduce peak hour travel and the associated traffic congestion or other social and environmental negative externalities associated with road travel such as air pollution, greenhouse gas emissions, visual intrusion, noise pollution and road traffic collisions.

<span class="mw-page-title-main">Congestion pricing</span> System of surcharging users of public goods that are subject to congestion

Congestion pricing or congestion charges is a system of surcharging users of public goods that are subject to congestion through excess demand, such as through higher peak charges for use of bus services, electricity, metros, railways, telephones, and road pricing to reduce traffic congestion; airlines and shipping companies may be charged higher fees for slots at airports and through canals at busy times. Advocates claim this pricing strategy regulates demand, making it possible to manage congestion without increasing supply.

<span class="mw-page-title-main">Electronic toll collection</span> Wireless system to automatically collect the usage fee or toll charged to vehicles

Electronic toll collection (ETC) is a wireless system to automatically collect the usage fee or toll charged to vehicles using toll roads, HOV lanes, toll bridges, and toll tunnels. It is a faster alternative which is replacing toll booths, where vehicles must stop and the driver manually pays the toll with cash or a card. In most systems, vehicles using the system are equipped with an automated radio transponder device. When the vehicle passes a roadside toll reader device, a radio signal from the reader triggers the transponder, which transmits back an identifying number which registers the vehicle's use of the road, and an electronic payment system charges the user the toll.

<span class="mw-page-title-main">M6 Toll</span> Toll motorway in England bypassing a busy section of the M6

The M6 Toll, referred to on signs as the Midland Expressway, and stylised as M6toll, connects M6 Junction 3a at the Coleshill Interchange to M6 Junction 11A at Wolverhampton with 27 miles (43 km) of six-lane motorway.

<span class="mw-page-title-main">Electronic Road Pricing</span> Singaporean toll collection scheme

The Electronic Road Pricing (ERP) system is an electronic toll collection scheme adopted in Singapore to manage traffic by way of road pricing, and as a usage-based taxation mechanism to complement the purchase-based Certificate of Entitlement system.

Vehicle Excise Duty is an annual tax that is levied as an excise duty and which must be paid for most types of powered vehicles which are to be used on public roads in the United Kingdom. Registered vehicles that are not being used or parked on public roads and which have been taxed since 31 January 1998, must be covered by a Statutory Off Road Notification (SORN) to avoid VED. In 2016, VED generated approximately £6 billion for the Exchequer.

<span class="mw-page-title-main">Edinburgh congestion charge</span>

The Edinburgh congestion charge was a proposed scheme of congestion pricing for Scotland's capital city. It planned to reduce congestion by introducing a daily charge to enter a cordon within the inner city, with the money raised directed to fund improvements in public transport. The scheme was the subject of intense public and political debate and ultimately rejected. A referendum was held and nearly three-quarters of respondents rejected the proposals.

<span class="mw-page-title-main">Motoring taxation in the United Kingdom</span>

Motoring taxation in the United Kingdom consists primarily of vehicle excise duty, which is levied on vehicles registered in the UK, and hydrocarbon oil duty, which is levied on the fuel used by motor vehicles. VED and fuel tax raised approximately £32 billion in 2009, a further £4 billion was raised from the value added tax on fuel purchases. Motoring-related taxes for fiscal year 2011/12, including fuel duties and VED, are estimated to amount to more than £38 billion, representing almost 7% of total UK taxation.

A toll road is a road over which users may travel over on payment of a toll, or fee. Tolls are a form of use tax that pays for the cost of road construction and maintenance, without raising taxes on non-users. Investor's bonds necessary for the construction of the roads are issued and sold with the expectation that the bonds will be paid back with user tolls. The toll roads may be run by government agencies that have bond issuing authority and/or private companies that sell bonds or have other sources of finance. Toll roads are usually a government guaranteed road monopoly that guarantees limited or no competing roads will be built by government agencies for the duration of the bonds. Private toll roads built with money raised from private investors in expectation of making money from the tolls probably dominated early toll roads. Government sponsored toll roads often guarantee a minimum payment to the bond holders if traffic volume and toll collections are less than predicted. If the toll authority is a private company there is often a maximum amount of fees that they may extract from users. Toll road operators are typically responsible for maintaining the roads. After the bonds are paid off the road typically reverts to the government agency that authorized the road and owns the land it was built on. Like most government taxes it is not unusual for tolls to continue to be charged after the bonds have been paid off.

Toll roads in Great Britain, used to raise fees for the management of roads in the United Kingdom, were common in the era of the turnpike trusts. Currently there is a single major road, the M6 Toll and a small number of bridges and tunnels where tolls are collected. In addition, there are also two UK road pricing schemes, the London congestion charge and the Durham congestion charge.

<span class="mw-page-title-main">Durham City congestion charge</span>

The Durham City congestion charge was the first congestion charge to be introduced in the UK in October 2002.

<span class="mw-page-title-main">Congestion pricing in New York City</span> Traffic congestion fee in New York City

In New York City, a planned congestion pricing scheme will charge vehicles traveling into or within the central business district of Manhattan. First proposed in 2007, this disincentivizing fee to cut down on traffic congestion was approved and included in the 2019 New York State budget.

The Greater Manchester congestion charge was part of a bid to the Government's Transport Innovation Fund for a £3-billion package of transport funding and the introduction of a road congestion charge for Greater Manchester, a metropolitan county in North West England. In 2008, two cordons were proposed—the outer encircling the main urban core of the Greater Manchester Urban Area and the inner covered Manchester city centre. The Greater Manchester Transport Innovation Fund was rejected by a referendum on 12 December 2008.

<span class="mw-page-title-main">London low emission zone</span> Traffic air pollution charge scheme

The London Low Emission Zone (LEZ) is an area of London in which an emissions standard based charge is applied to non-compliant commercial vehicles. Its aim is to reduce the exhaust emissions of diesel-powered vehicles in London. This scheme should not be confused with the Ultra Low Emission Zone (ULEZ), introduced in April 2019, which applies to all vehicles. Vehicles that do not conform to various emission standards are charged; the others may enter the controlled zone free of charge. The low emission zone started operating on 4 February 2008 with phased introduction of an increasingly stricter regime until 3 January 2012. The scheme is administered by the Transport for London executive agency within the Greater London Authority.

The Smeed Report was a study into alternative methods of charging for road use, commissioned by the UK government between 1962 and 1964 led by R. J. Smeed. The report stopped short of an unqualified recommendation for road pricing but supported congestion pricing for busy road networks.

The Greater Manchester Transport Innovation Fund was a failed bid by the Greater Manchester Passenger Transport Authority (GMPTA) and Association of Greater Manchester Authorities (AGMA) to secure £1.5 billion from the Transport Innovation Fund (TIF), a major public transport funding mechanism in England, for the metropolitan county of Greater Manchester. There would have been an additional £1.2 billion borrowed and paid back through a mixture of public transport revenues and weekday, peak-time only Greater Manchester congestion charge.

<span class="mw-page-title-main">San Francisco congestion pricing</span> Proposed fee for congested areas

San Francisco congestion pricing is a proposed traffic congestion user fee for vehicles traveling into the most congested areas of the city of San Francisco at certain periods of peak demand. The charge would be combined with other traffic reduction projects. The proposed congestion pricing charge is part of a mobility and pricing study being carried out by the San Francisco County Transportation Authority (SFCTA) to reduce congestion at and near central locations and to reduce its associated environmental impacts, including cutting greenhouse gas emissions. The funds raised through the charge will be used for public transit improvement projects, and for pedestrian and bike infrastructure and enhancements.

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