The UK Transport Committee has released a report highlighting the need for a road pricing system that will allow the government to maintain the existing link between motoring taxation and road usage.
The Road Pricing Report warns that the transition to zero emission vehicles could result in a loss of 35 million GBP in Treasury revenue. As fuel duty and vehicle excise duty are not applied to electric vehicles, the ban on selling new petrol and diesel vehicles from 2030 and the commitment to delivering net zero emissions by 2050 will significantly reduce government funds from motoring taxation.
Chair of the Transport Committee, Huw Merriman MP, said:The Government’s plans to reach net zero by 2050 are ambitious. Zero emission vehicles are part of that plan. However, the resulting loss of two major sources of motor taxation will leave a £35 billion black hole in finances unless the Government acts now- that’s four percent of the entire tax-take. Only £7 billion of this goes back to the roads; schools and hospitals could be impacted if motorists don’t continue to pay.
The Transport Committee is consequently urging the government to introduce a reformed system, based on miles travelled and vehicle type, so that drivers of electric vehicles still contribute towards road maintenance.
This system would leverage new technology to measure road use, while ensuring that incentives remain in place to encourage motorists to purchase vehicles with cleaner emissions.
The committee emphasises that the charging mechanism should replace fuel duty and vehicle excise duty, rather than serving as an additional charge. The revenue should be neutral, with most motorists paying the same or less than they do currently.
In addition, the report calls for the government to consider the system’s impact on vulnerable groups and rural areas, while also ensuring that the reform does not undermine progress with increasing active travel and public transport.
Huw Merriman MP, continued:Innovative technology could deliver a national road-pricing scheme which prices up a journey based on the amount of road, and type of vehicle, used. By using price as a lever, we can offer better prices at less congested times and have technology compare these directly to public transport alternatives. Work should begin without delay. The situation is urgent. New taxes, which rely on new technology, take years to introduce. The countdown to net zero has begun. Net zero emissions should not mean zero tax revenue.
