Ministers want to reignite the debate about road pricing to charge motorists to drive

Daily Mail Online Automobile 1 month ago

Ministers want to reignite a national debate regarding the introduction of road pricing to bolster Treasury coffers when motorists switch to electric vehicles.

MPs estimate there will be a £40billion-a-year 'fiscal black hole' when plug-in cars become mainstream and drivers won't be taxed for petrol and diesel and - under current rules - vehicle and excise duty.

The Transport Committee's inquiry into road pricing, which would force motorists to pay per mile they drive, will be formally announced in early 2020.

Road pricing: The Transport Committee is due to launch an inquiry into road pricing next year, but wants to know what people think of the concept
Road pricing: The Transport Committee is due to launch an inquiry into road pricing next year, but wants to know what people think of the concept

Previous plans for a road pricing scheme were scrapped a decade ago under the Labour Government following an opposing petition that racked up 1.8million signatures.

But it has recently been rekindled by ministers who are in desperate need to find new ways to raise funds for the Treasury that will be lost when petrol and diesel vehicles vanish from the streets.

Motoring groups said the Government's existing taxation revenue streams are on 'borrowed time' in the advent of an electric car revolution.

These road pricing efforts could include tolls, congestion charges, HGV levies, workplace parking fees, plus low emission and clean air zones.

Similar levies such as London's Congestion Charge raised £1.9billion in 2017.

The House of Commons' Transport Committee announced last week that it wants to open a debate with drivers and non-motorists regarding road pricing ahead of next year's formal inquiry.

Funding from fuel duty - with drivers paying 57.95p in tax for every litre they pump into their vehicles - will eventually dry up entirely, as the motoring industry moves away from traditional fuels.

The Office for Budget Responsibility estimates that fuel duty alone will generate £28.4billion in the financial year 2019/20 while VED will haul in another £6.5billion. 

The committee said new schemes new to be put in place if the Government is to 'continue to invest in transport infrastructure and prepare the transport network for a new greener future'.

Road pricing efforts could include tolls, congestion charges, HGV levies, workplace parking fees, plus low emission and clean air zones
Road pricing efforts could include tolls, congestion charges, HGV levies, workplace parking fees, plus low emission and clean air zones

Lilian Greenwood, who chairs the Transport Committee, said: 'It's been almost ten years since the last real discussion of national road pricing. 

'In that time, we have become much more aware of the dangers of air pollution and congestion. 

'Parliament declared a Climate Emergency in May, and local councils have begun to do the same. This requires a serious response, including rethinking how we manage our road network.'

She added: 'We cannot ignore the looming fiscal black hole. We need to ask how we will pay for roads in the future and in answering that question we have an opportunity for a much wider debate about our use of road space, cutting carbon emissions, tackling congestion, modal shift and how we prioritise active travel. 

'Tackling the Climate Emergency is essential but this is about more than what we must do to meet that challenge. It's also about our health and the sort of towns and cities we want to live in.' 

Nicholas Lyes, RAC head of roads policy, said previous surveys by the motoring group found that drivers are open to a new form of motoring taxation but three-quarters are worried they may end up paying more tax than they do now. 

'For this reason, we believe any new tax should be in place of the current one and not in addition to it,' Lyes said.  

'Our research also suggests that a sizeable number of drivers would see a 'per mile' road pricing option as fairer than the current system of paying fuel duty, and there is a large level of support for the principle of the 'more you drive, the more you pay.

'In addition, drivers tell us that any "pay per mile" system of road pricing would make them consider cutting out short journeys.' 

The Office for Budget Responsibility estimates that fuel duty alone will generate £28.4bn in the financial year 2019/20
The Office for Budget Responsibility estimates that fuel duty alone will generate £28.4bn in the financial year 2019/20

Edmund King, president at the AA, has been calling for the Government to modify the scheme to a 'Road Miles' policy.

With this scheme motorists would receive at least 3,000 free road miles each year, tracked by a telematics dongle in the car.  

Once motorists go over that allowance they would be charged 1p per mile in the first year after the free miles and fuel duty discounts are deducted.   

'We do need a national debate about how we pay for our road infrastructure to bridge the taxation gap between falling fuel duty revenue and the electric vehicle revolution,' Mr King said in response to last week's announcement. 

'However, the British public will never vote for 'national road pricing' so we need greater imagination to sell the public something that they actually want – our answer is Road Miles.

'In Road Miles drivers pay less, more is spent on roads, tunnels, cycling, buses and the Government gets £2billion extra per year.' 


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