The fast lane to more traffic jams: Road pricing pleases economists and ecologists. But it is no substitute for a transport policy, argues Christian Wolmar

THERE'S nothing quite so easy as getting the motoring organisations to bleat. And bleat they did last week when the Government tentatively suggested that the days of a free ride on the motorways may be over. Yet the concept of road pricing has a lot to commend it. Nobody can deny that there are too many cars scrabbling after insufficient road space or that traffic congestion is the new enemy within. And what better way to slow down the inexorable growth of traffic than through the price mechanism?

The idea has potentially wide appeal. It commends itself to both economists and ecologists because, as part of a coherent transport strategy, road pricing could shift traffic from road to rail, helping the Government to meet its own targets on the emission of greenhouse gases and to collect revenue which could pay for improvements to roads and to public transport.

However, that is not what is on offer. The proposals set out in the Green Paper, Paying for Better Motorways, offer a limited but nightmarish analysis which goes something like this: we are facing an unending rise in road traffic about which we can do nothing but which is likely to mean that much of the motorway network will soon be as congested as the M25 on a wet Friday night; the roads programme is running at record levels - about pounds 1.5bn on new motorways and trunk roads - but it will still take 15 to 20 years to complete the current pounds 23bn roads programme; the taxpayer cannot be expected to shell out more money and, therefore, if the programme is to be speeded up and more roads are to be built sooner, new sources of revenue have to be found. Hence motorway tolls.

The trouble with this strategy is that it starts in the middle. In the beginning there is the need for people and goods to be transported from one place to another. Various policies affect the amount of freight moved, the number and length of people's journeys and what method is chosen. The starting point of a transport investment programme should be to look at how to influence those choices, rather than to concrete over yet more of this small island and seek new ways of paying for it.

That is the approach used in the Netherlands. John Whitelegg, whose book Transport for a Sustainable Future has just been published (Belhaven pounds 12.99), cites a study under way on the busy Amsterdam-Utrecht 'corridor': 'They (the Dutch government) are looking at traffic growth forecasts and then studying how to meet the demand. Instead of just accepting that, say, most of it will go by road, they try to assess what infrastructure is needed to make sure it goes by more environmentally friendly methods such as rail or waterways.'

Whitelegg also looks at Germany, where drive-on-drive-off freight trains carry lorries between major centres. This saves wear and tear on the motorways and on the drivers. On simple accounting, not unlike the methods used by the Department of Transport, these trains lose money and need to be subsidised. But if the reduction in damage to roads and environment, as well as the savings from not having to invest in more roads, are considered, the overall picture is very different.

Naively, one would expect that investment criteria in Britain would involve similar calculations here. Every year, the Department of Transport has pounds 3.5bn to allocate to capital projects. In a rational world, politicians and officials would choose between the competing projects by finding out which ones best met their overall transport objectives.

Fat chance. The department does indeed have some very sophisticated models for determining the benefits of capital projects, particularly road schemes. But it only uses them after determining how much it will spend on each means of transport. There is no attempt to compare, say, the benefits of upgrading the West Coast mainline from London to Glasgow, which currently needs around pounds 800m worth of investment, with those of building an extra lane on the M6. Instead, the Government decides to spend a set amount on each mode of transport and schemes are given approval within those budgets. (This is not just a failing of the current Government: the Department of Transport has always done it.)

For roads, the system used to determine whether a project is good value for money is a notional cost-benefit analysis based largely on the time the new road will save motorists. The Department of Transport bases the calculation on an estimate of people's readiness to pay to save time when, for example, they use a toll bridge or tunnel. However, the weighting given to such time savings makes up the bulk of the 'benefits' of a potential scheme, since even very small time savings, rated at around 3p per minute, build up to enormous sums when extended over 30 years (given that leisure travel is also included).

If these figures add up to more than the cost of the scheme, then, broadly, the Department will support it. This allows John MacGregor, the Transport Secretary, whose instincts are to favour roads, to justify the stream of projects that make up the pounds 23bn national roads programme. He can argue that they all have a positive 'net present value', the difference between the costs and benefits over 30 years.

However, as John Whitelegg points out: 'Even if one accepted that this is a valid way of assessing schemes, many of these time savings never materialise. As more and more people use the new road the time savings are reduced, but this is not taken into account in the model.' He suggests that the National Audit Office should go back over schemes built 10 years ago to assess what savings have been realised.

Rail schemes are looked at in a different way. They are first assessed to see whether they can meet the Government's financial target of an 8 per cent real rate of return on capital (a test, incidentally, that is not applied to roads). If they fail, then a limited cost-benefit analysis will be used, looking at savings as a result of reduced congestion on roads or savings in time by rail passengers.

Road pricing will, therefore, do nothing to rectify the imbalance between rail and road. Indeed, if the money is used to pay for more roads it may lead to yet more road-building and more traffic, since the prices for tolls suggested in the Green Paper are far too low to act as much of a deterrent.

Instead, Mr MacGregor should be looking into his crystal ball and asking himself whether Britain can really cope with the increase in traffic that his own department has forecast. This is expected to rise by between 70 and 100 per cent by the year 2015. The prospect of the consequent rise in exhaust fumes alone should be enough to deter him.

The Government rejects accusations that it does not have a transport policy. It says that it tries to ensure that market forces determine provision and only when they fail does it intervene. That 94 per cent of passengers and nearly 90 per cent of freight use road, it argues, is a reflection of what the market demands. For John Whitelegg, this amounts to a hidden policy: 'They are setting out to ensure that 98 per cent of movements go by road. But they don't dare say that.'

Road pricing must come, given the environmental and social damage caused by the unfettered growth of motor car use. However, it should not be used as a means of justifying more road- building, nor of avoiding the increasingly urgent need for a coherent transport policy.