Motorway pricing plan scrapped

The plan to introduce road pricing on motorways by 1998 has been scrapped by Brian Mawhinney, the Secretary of State for Transport, who has launched a rethink of government policy.

Dr Mawhinney is seeking to distance himself from the policy of his predecessor, John MacGregor, who was an eager advocate of road pricing. Mr MacGregor had committed the department to introducing road tolling on motorways and major trunk roads by 1998, with the aim of raising at least £700m a year to help pay for new roads.

However, Dr Mawhinney, presented with a summary of the policy by officials, realised that the plan was unworkable. The scheme also risked pushing motorists from tolled roads on to parallel ones that were free, as has happened with the Severn Bridge since tolls were raised dramatically after it was privatised in 1992.

With growing opposition to the road-building programme, Mr MacGregor's pet project, using the revenue from road tolling to build more roads, is seen as politically unrealistic.

Dr Mawhinney was apparently angered by the intellectual incoherence of the proposed scheme. Officials have been told to study the option of more widespread road pricing, combining urban congestion charging with motorway tolling.

A senior department source said: "It's ridiculous to think of road tolling as solely a way of raising revenue. Clearly it's also a way of getting people to use their cars less and to consider alternatives like rail." A more comprehensive road-pricing policy would also fit in with Dr Mawhinney's aim of presenting a "greener" transport policy. However, another option being looked at is to scrap the whole idea altogether.

The department has postponed the announcement of the shortlist of consortia to be asked to conduct trials of the equipment that would be used for road pricing. Originally, trials were to have started this month but now they have been postponed until the autumn.

Virtually all leading European electronic companies and several from the US and the Far East are involved in one of the 29 consortia which have expressed an interest in the project. The prize for the winning company would be enormous. Installing the gantries and the roadside electronics would cost at least £300m and an estimated further £500m would be needed to fit Britain's 25 million vehicles with on-board charging units.

While this may seem expensive, such a scheme would pay for itself in about a year. The winning consortium would also be in a good position to sell its system overseas or to other parts of Britain if the road tolling were extended to towns.

Potential bidders consider there is no hope of a scheme for motorways being introduced before the end of the decade.