‘No viable alternative’: UK must introduce road pricing, MPs say | Transport policy


Motorists will have to pay by the mile to make up a £35bn tax shortfall that will arise from the shift to electric vehicles, MPs have warned, calling on the government to act urgently to bring in a national road pricing scheme.

The cross-party Commons transport select committee said it saw “no viable alternative” to road pricing and work should start immediately on creating a replacement for fuel duty before it dwindled away with the transition.

Without urgent reform of motoring taxation, the UK would face an under-resourced and congested future, the committee said. New petrol and diesel vehicles will be banned from sale from 2030, as part of the governments 2050 net zero plans, losing the Treasury roughly £28bn in fuel duty and £7bn in vehicle excise duty, under current tax rules.

With the exception of the Green party, few have consistently called for road pricing, after an attempt in 2007 by Labour to implement a scheme met with an enormous public backlash. The mayor of London,Sadiq Khan, last month said the capital should move to a smart road pricing scheme but claimed the technology was not ready to introduce it before the end of his current term in office.

Recognising the political difficulty, in its report published on Friday, the committee said new charges should entirely replace fuel duty and vehicle excise duty and be “revenue neutral”, with most motorists paying the same or less than they do now.

The MPs said the government should consider the impact on vulnerable groups and those in rural areas, and ensure that any data captured be subject to “rigorous governance and oversight” to protect privacy.

It should also incentivise people to continue to use public transport, walk or cycle, the committee said, with driving set to become an ever cheaper option once an electric vehicle is bought.

Drivers of electric vehicles should pay to maintain and use the roads, the MPs said, like petrol and diesel drivers do – although incentives to purchase cleaner vehicles must remain.

The report calls on the Treasury and Department for Transport to set up an arm’s length body to draw up a scheme by the end of 2022.

Committee chair Huw Merriman said it was “time for an honest conversation on motoring taxes” with the uptake of zero-emission vehicles ahead of official government forecasts.

He said that he believed the public would support a scheme despite previous opposition: “It’s important to emphasise that motorists won’t pay more. The difference between now and then is that the revenue – for roads, schools and hospitals – is ticking down to zero, unless we put 5p on to income tax. This issue can’t be dodged. We have to change policy.”

Merriman said that the technology now existed to deliver a national scheme that priced up a journey based on the road, time and type of vehicle, offering better prices at less congested times.

Motoring thinktank the RAC Foundation backed the call for road pricing but warned against “the temptation to create an over-complex system that’s expensive to run” – suggesting charges could be calculated and collected alongside vehicle insurance premiums.

Steve Gooding, director of the foundation, said: “Drivers choosing to go electric deserve to know what is coming next – particularly if the promise of cheap per-mile running costs is set to be undermined by a future tax change. If the Treasury is thinking it can leave this issue for another day but still recoup their losses from electric vehicles they risk a furious backlash.”

The Policy Exchange thinktank, issuing its own report, said road pricing could be “good for drivers” by easing congestion, and should be implemented through location-tracking technology in cars, backed up by automatic numberplate recognition.



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