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Let's Make Road-Charging Work for Us

Posted on: Saturday, 15 October 2005, 03:01 CDT

By Rankin, Tim

Transport secretary Alistair Darling's pay-as-you-go transport plan proposes replacing car and fuel tax with road charging as a means of reducing congestion. The scheme would work through satellite tracking systems monitoring black boxes fitted in all vehicles. Motorists would then be charged different rates per mile to use different roads at different times.

The plan follows a feasibility study that set out a range of charges from 2p a mile on country lanes to 1.34 a mile on the busiest roads in order to reduce urban congestion by nearly half. The study claimed that more than half of all drivers would pay less than they do now to use the road.

The plan has received a mixed welcome. The powerful fleet industry, although welcoming Government moves to beat congestion, stressed that it feared having to bear the brunt of the huge infrastructure costs involved in setting up the system.

The Association of British Drivers also said it was worried about the astronomical expense of the scheme, doubted that it would work, and warned of a huge potential danger to civil liberties.

The ABI meanwhile, has already opened preliminary talks with the Transport Department to discuss ways of using the system for the insurance industry's benefit.

One obvious potential benefit is that it could finally mean fairer motor premiums for all, ones that more realistically reflect the actual risk. In other words, the information provided by the scheme, once implemented, would enable underwriters to assess the risk more accurately and set the premium accordingly.

Opportunity

But the plan could do so much more. The black boxes for instance, could be used to provide vital information such as the date, time, and speed involved in any road accident. This would dramatically speed up the resolution of motor claims, particularly in relation to providing details of third parties who might flee the scene of an accident.

Another potential benefit would involve the satellite technology offering precise geographical information on a roadside recovery following an accident or breakdown. Indeed, a survey of motorists following the announcement of the road-charging plan revealed this particular by-product of the scheme as one of its most popular aspects.

The black boxes could also prove a vital resource in the battle against car crime by being linked to the latest tracking technology and thereby providing the location of stolen vehicles to police. At the moment, this technology is available to a small number of fleets and private motorists who are prepared to pay for it. But the road charging plan could actually factor the costs into the scheme so that the service becomes standard.

Omission

One major omission in the current Government plan however, is that it does not differentiate between environmentally friendly vehicles and gas-guzzlers. Alistair Darling has said that he believes it would be too difficult to introduce this 'green' element into a scheme that is already expected to take around 10-15 years to bring to fruition.

I believe that this is a serious mistake. All fuel-efficient vehicles should attract a discount. Apart from making the plans more attractive to the most responsible motorists, it would also make a significant contribution towards reducing pollution.

The Transport secretary has already said that as well as significantly improving the reliability of drivers' journey times, his plan would also bring about real environmental benefits. In this respect, he needs to back up his words with actions by discriminating against the least fuel-efficient vehicles, even if this means that the plan takes a little longer to realise. Anyway, the mere threat of such discrimination would be enough to discourage some drivers from choosing gas-guzzling vehicles.

Lobby

But the crucial factor in all this is that pay-as-you-go provides a unique opportunity for brokers to lobby for highly desirable benefits both for themselves and for their customers. The more open the debate now, the more likely the Government is to put into place not only a system that would be the first of its kind in the world, but also one that would offer highly desirable benefits in the process.

At the same time, it is essential to ensure that the new measures do not trespass on civil liberties. The spectre of Big Brother could all too easily enter the equation in an effort to make the plan as foolproof as possible.

If this danger can be avoided however, then I believe that the plan provides us with a great opportunity to solve a number of problems that are highly relevant to us all.

by Tim Rankin

Managing Director

WNS Assistance

Copyright Insurance Publishing & Printing Company Oct 2005

Source: Insurance Brokers' Monthly and Insurance Adviser

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