Pay-as-you-drive is the Government's new big idea. But how would it work? James Ruppert puts a spy in the cab...

ay as you drive has become the Department of Transport's new big idea. The new Transport Secretary, Douglas Alexander, has promised more cash will be available for congestion charging schemes as he pledged to get road pricing to work. He promised to make £200m available from 2008 to help councils with a view to setting up a pilot charging scheme within five years. This would be followed by a national scheme.

The anticipated scheme would use the Global Positioning System to fix the precise location of all vehicles, with cost anticipated to range from 2p a mile for rural stretches of road up to £1.30 for the busiest. Such a scheme could replace fuel and road tax. In 2004 the Department for Transport published a feasibility study on road pricing, claiming it would be "revenue-neutral", which means that the overall level of motor taxation will remain the same. Now that's good news isn't it?

Well, the only way to find out is to be tracked. I approached Quartix, a company that provides users, such as companies tracking fleets of vans, with a "point-and-click" source of real-time information (via a secure website, www. as well as an e-mail reporting system.

"Our customers want to know how to control wage bills, change routes and generally operate more efficiently," says Quartix director, Andy Walters . Fair enough. If I had a bunch of vans I would want to know exactly where they were and what they were doing.

I'd also appreciate the fact that I can use the system as an anti-theft protection (the car can ring me if it's being stolen) and as a tracking device to aid its recovery. Also as a company-car taxpayer I would be delighted that it could tell Gordon Brown just how much business and private mileage I had done. However, what if I was forced by Douglas Alexander to have a spy in my cockpit?

I borrowed a Ford Focus and called in Quartix. Fitting all the equipment, including a GPS receiver, took only an hour. A nondescript metal box was neatly hidden away. The fitter texted the device and immediately got a response from the box that everything was OK.

I drove from Peterborough down the A1(M), then on to the A14 and into Cambridge. From there I hopped on to the M11 south, then took the A10 to Royston during school-run. Then I went on a B-road to a Hertfordshire hamlet, shopped in Baldock and returned to Peterborough.

The next day an e-mail arrived from Quartix with a vehicle log that showed what I had been up to. It divided my journey in two, marked by when I had turned off the ignition. The log had calculated that I had done 98.5 miles (although the Ford's computer said I'd done 111).

My maximum speeds were 71 and 73mph so Mr Alexander might like to send me a couple of speeding fines. Logging on to the site meant that I could look at a detailed graphic of my journey. Unlike other vehicle-tracking systems, I did not need any special software. Simply hovering over the route of my journey showed my speed at any point during it. I could zoom in and out to an incredible amount of detail. But for now it cannot tell me what I would owe to the government.

According to ministers, the maximum £1.30-a-mile tariff would only apply to London but real details are lacking at this stage. I travelled 98.5 miles. The majority of the journey was on A-roads and motorways, which might attract per-mile fees of up to a £1. Driving into Cambridge and Baldock during peak hours would also be on the high side, but maybe half the cost of driving into London - let's say 60p. Then there was the excursion on to single-track roads which should cost pennies, unless Home Counties drivers are going to be penalised. Averaged out at 50p a mile, that's £49. If that sounds too much, let's halve it at 25p a mile - but that's still £25. So my guess at how much I'd pay for my 98.5 miles under the possible new road pricing is something between £25 and £50.

Now let's compare that with what I actually paid under the current regime. Petrol is 99p a litre, with 70p of that going in tax. I used nine litres, so that's £6.30 in tax. As for the road-fund licence, the annual £175 is 48p a day, so effectively I paid just under seven quid for the privilege of driving 100 miles. Now that's a bargain compared with paying by the mile. Indeed, applying the mileage rate rather than consumption rate means that a 4 x 4 will pay as much as a hybrid unless there is weighting for engine size.

And any reduction in congestion produced by a road-pricing scheme won't necessarily result in less traffic. Some would be redirected from expensive to cheaper routes, for example from motorways to A roads or to urban rat-runs.

In Germany in 2003 the government sank more than €730m (£494m) into a GPS system that would charge commercial vehicles for the distance driven on various routes. The toll of 12.4 euro cents per kilometre was meant to bring in €2.8bn a year.

But companies complained that they were charged a toll when using the non-toll road that ran near a toll road. Others reported that they were charged no toll, although they were using a toll road. Not surprisingly the scheme ran into huge trouble. It should be a lesson.

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