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A pay-per-mile tax that would replace fuel duty and vehicle excise duty (VED) has scooped the prestigious 2017 Wolfson Economics Prize.
Answering the question 'How can we pay for better, safer, more reliable roads in a way that is fair to road users and good for the economy and environment?', Gergely Raccuja's idea suggests scrapping VED and fuel duty rates, and replacing them with a distance-based charge.
According to Raccuja's proposal 'Paying for road use could be Miles Better', the lightest and cleanest vehicles would pay the lowest per mile charges.
His suggestion indicates that insurers would collect the annual charge, as they already manage the data needed to calculate fees, with motorists paying their 'road bill' at the same time as they renew insurance premiums, thus avoiding privacy concerns.
The government would then pay insurance firms a "small fee" in order to collect the charge, with the Office of Rail and Road setting the base charge, so insurance companies could not unfairly profit from the scheme, while ring-fencing a "fair proportion" of the earnings for future road investments.
Ideas were judged by a panel of senior policymakers, including former chancellor Lord Darling and former deputy mayor of London for transport Isabel Dedring, with other shortlisted suggestions including adopt-a-highway naming rights to improve investment, proposed by AA President Edmund King.
"The 2017 Wolfson Economics Prize sought a better way to pay for better roads as congestion, pollution and potholes remain a source of daily misery for millions of people: undermining our economy, environment and quality of life," said Lord Wolfson of Aspley Guise, founder of the prize. "Gergely's entry met that challenge, and is ground-breaking, yet simple."
He added: "Policymakers can learn much from this year's prize, and I hope they will take forward solutions to solve one of the greatest infrastructure challenges of modern times."
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