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Road pricing debate needed to avoid ‘looming fiscal black hole’, says MPs

MPs on the Transport Committee have called for a national debate on road pricing, ahead of a formal inquiry due in 2020, as they highlight the urgent need for a replacement to Vehicle Excise Duty and fuel duty as drivers switch to EVs.

The Transport Committee wants to “kick-start” a conversation on road pricing

Although the committee will investigate whether national road pricing should be a part of the future transport network, it wants the public – drivers and non-drivers alike – to begin the discussion now as it warns that it’s been almost a decade since the last real discussion of national road pricing.

The comments come less than a week after the Institute for Fiscal Studies (IFS) urged the Government to take immediate action by switching to road pricing to counter a £28bn fall in fuel duties from the switch to EVs. Current Road to Zero Strategy plans by the Government set out an aim to stop conventional new diesel and diesel car sales from 2040 ahead of the commitment to reach net zero by 2050, but the IFS says the decline in VED and fuel duty revenues – which are essential to future network investment – could be solved by turning to per-mile road user charging, which should also reflect when and where journeys take place.

Now, the chair of the Transport Committee, Lilian Greenwood MP, has said the fall in revenues requires a serious response, including rethinking how we manage our road network.

“We cannot ignore the looming fiscal black hole,” she commented. “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.

“This isn’t about pricing drivers off the road; it’s about making sure that as many people as possible have a say in future plans so that we can manage the changes to come. The Transport Committee wants to kickstart this conversation.”

Issues to be considered will include pros and cons of road pricing including the economic, environmental, and social impacts, and looking at the lessons that can be learnt from existing schemes at the national level, local level, and overseas. Road pricing does not only mean tolls – it also includes congestion charges, an HGV levy, workplace parking levy, low emission and Clean Air Zones.

Greenwood’s comments have been welcomed by RAC head of roads policy Nicholas Lyes, who said: “There is no question that the existing fuel duty system is on borrowed time as we move towards electric and other zero emission forms of car travel. It’s therefore clear that business as usual isn’t an option moving forward.

“We know through research that drivers are open to a new form of motoring taxation but three-quarters of those we questioned 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.

“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.”

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. Natalie edits all the Fleet World websites and newsletters, and loves to hear about any latest industry news.