Devising a road charging mechanism to replace fuel duty (FD) and vehicle excise duty (VED) is “urgent” and a recommendation for such a transition should be developed by the end of 2022, the Transport Committee has said in a report on road pricing that has largely been welcomed by the industry.
Road pricing should be part of that work, with the Committee advocating a system that charges vehicles according to type, distance driven and with congestion factored in. It adds that if future motoring taxation is linked to road usage, the Committee has seen no viable alternative to road pricing as a solution.
Publication of the report adds urgency to discussion around road pricing, although the Committee notes that levies in addition to FD and VED – such as congestion charges and those for entering emission control zones – “may make it impossible to deliver a national road pricing scheme” because they “would create confusion and unfair double taxation.”
The report advocates future taxation of roads being revenue neutral to leave most motorists paying “the same or less” than they do presently. FD and VED currently generate £35bn per year, but the transition to zero-emission will cut that to zero by 2040. Cheaper driving is likely to lead to a severe impact on congestion, the document continues
Other proposals aired in the report include a “roads surcharge” on electricity used to power vehicles, although it notes that taxing zero-emission vehicles where the owner has become accustomed to no-charge usage could be difficult.
Trade bodies RHA and the Confederation of Passenger Transport (CPT) were quick to welcome the report, although RHA Policy Director for England and Wales Duncan Buchanan says that “a real concern” for operators of commercial vehicles is “the multiplicity of local charging schemes.” As a result, RHA believes that road pricing must be a national scheme, saying that will give operators confidence to invest in vehicles.
CPT has applauded the Committee’s recognition that road pricing will play an important role in the future of road transport, but it says that the “true cost of car travel to the environment, economy and society” should be better reflected in the cost to the driver. “That will empower people to make informed decisions about their journeys,” the Confederation adds.
