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news
Cars on the A4 at Brentford (copyright Simon MacMichael).JPGRoad pricing “inevitable,” MPs are told as switch to electric vehicles hits tax revenues
Road pricing is “inevitable,” a House of Commons committee has been told, with tax revenues from motorists due to plummet as a result of the switch to electric vehicles.
The call to start charging motorists to use roads nationwide was made yesterday at an oral evidence session on the issue held by the House of Commons Transport Select Committee by Toby Poston, director of corporate affairs at the British Vehicle Rental and Leasing Association (BVRLA).
He urged a trial system to be developed to help meet an estimated £31 billion reduction in revenue from Vehicle Excise Duty (VED) and fuel duty as private motorists and fleet operators increasingly switch to zero emission vehicles.
“It is imperative that road pricing is considered and trialled now to ensure a smooth transition into a new system,” he said.
“Drivers and fleet operators need clarity on future taxation as they make the transition to zero-emission road transport.”
While some road pricing does exist – notably, the congestion charging zones in Durham and London, or charges to use infrastructure such as the Dartford Crossing and the M6 toll road – successive administrations have resisted introducing a nationwide road pricing system.
Such measures have however been considered in the past, and were recommended as long ago as 1964 by the Smeed Report, commissioned by then Conservative government.
In 2005, the then Labour government announced plans for a national scheme under which vehicles, equipped with satellite trackers, would incur charges ranging from 2p per mile on the least busy roads to £1.34 on the most congested roads at peak periods.
The proposals were dropped after an online petition attracted 1.8 million signatures, and while around a third of households in the UK do not have access to a motor vehicle, any move towards road pricing is likely to be unpopular among many voters who do drive.
Wider public opinion may be changing, however. A survey conducted by the Social Market Foundation shortly before the recent fuel crisis found that 38 per cent of respondents were in favour of introducing road pricing, with 26 per cent opposed.
Research director, Scott Corfe, said: “For too long politicians have thought of reforming motoring taxes as grasping the nettle, fearful that a backlash from drivers will hit them at the polls.
“In reality, the public want to see a better, fairer system of how the UK taxes drivers. Our research shows that road pricing, often perceived as politically poisonous, is seen as a preferential option compared to our existing tax regime.”
The current government, which says it is committed to promoting active travel and trying to reduce dependency on cars, particularly for shorter journeys, has already acknowledged that ways will have to be found to make up for the predicted lost revenue, an issue mentioned in HM Treasury’s Net Zero Review Interim Report, published last December.
In his appearance before the Transport Select Committee yesterday, Poston added: “Any new road pricing scheme must be easy to pay and have the simple objective of providing a revenue-neutral replacement for fuel duty and VED.
“It should be based on a simple ‘distance-driven’ model that considers vehicle weight, emissions and use case, with discounts given to shared mobility solutions – such as car clubs, rental cars, buses and taxis – to incentivise more sustainable travel choices.”
Yesterday’s session formed the second part of the committee's inquiry on Zero Emission Vehicles and Road Pricing.
From a cyclist’s perspective, one aspect of road pricing, should it be introduced across the country, is inescapable; it would give motorists who currently rail against people on bikes “not paying road tax” – even though cyclists are more likely than average to also own a car, and road tax itself was phased out in the 1930s – a figurative stick with which to beat us.
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.
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92 comments
It would be incredibly easy to bypass such a charge though.
Most EVs will charge from a standard plug (albeit slowly).
Given most will need charging less than once a week plugging in on Friday evening will give you all the range you need at very low cost.
Most car leases etc have an excess mileage charge so the concept is familiar to people. You could arrange a direct debit to cover your expected mileage every month and simply pay the difference at MOT.
Selling a car just prior to MOT would obviously negatively affect the price much as it does now.
You could always make it a pay in advance system, based on average usages. Then people could claim a rebate at the next MOT if they'd used less than that. That would have an additional benefit of reducing the attractiveness of buying a car in the first place by effectively increasing the purchase price by three years worth of duty.
Or you could have 'mot lite' at the end of each year for the first 3 years. If don't turn up, then you get stung for an above average charge.
TBH I've never really seen the logic of the no MOT for the first three years thing anyway. I mean, I get that it's less likely that parts will fail through wear and tear early in their life, but it's not impossible, and in any case you could drive straight out of the showroom and into an accident. And then you could be driving around in a dangerous vehicle for three years.
Seems to me there ought to be some sort of checks in that period, even if it's less comprehensive than a full MOT.
If you have a historic vehicle, there's no MOT or VED requirement.
(We have two; but we also get them serviced/"MOT-equivalent"ed every year anyway, otherwise how would you know if anything's wrong?)
Also you know new cars are about as normally the lights are more dazzling. I expect most failures / warnings on the first MOT is because the lights are misaligned.
Awesome idea!
Nobody important.
But let's not confuse the data with the pricing.
HMRC knows what we get paid (PAYE) but operates a complex tax regime on that as decided by various legislators to be fair...
What has income tax got to do with road pricing?
Most people are on PAYE which is effectively outsourced to the employer. Collecting the base data is easy.
If you want complex road pricing, you need to equip all cars with some hardware and develop software to collect and charge people.
Do you think that is easy peasy ?
It is an example of a small set of data driving a price (tax) that is not directly related, i.e. tax free allowance, base rate, higher rate, super rate, all of which are supposed to achieve an agreed outcome.
So simple data collection doesn't mean cost per mile is the only possible outcome.
Easier than PAYE, NI, yes. Most vehicles already have many sensors on their CANbus and report usage to OBDII diagnosis so that part is largely built. Mobile data networks are built and getting better, 5G. Many vehicles already have remote assistance using a SIM. Likewise most have SatNav so know where they are. So the pieces are largely built and the statutory requirement for them to be integrated is missing. A conversation between government and manufacturing is needed, and both will delight in their environmental responsibility, especially VAG AG!
A lot more of this.
Good point. Thieves ruin everything.
Hmm, so less moving vehicles, and I never leave a bicycle in the street....
Safer riding and low costs, I'm liking that more and more
The Severn Bridge tolls (both bridges) were scrapped in December 2018!
What does that even mean though?
The existing system isn't revenue neutral - that's the whole reason they want to replace it - take it away and it leaves a big hole in the general public purse.
And if what they really mean is 'raise as much tax as the existing system', that's equally ill-defined, because that fluctuates according to the whim of the Chancellor and, more pertinently, according to consumer behaviour, as evidenced by the current fall in revenues. There's no particular reason why it should raise as much as it does now, as much as it did ten years ago, or any other amount.
Surely the amount of revenue it generates shouldn't be the driving* consideration - rather it should be what you need to charge to effect the kinds of behaviour patterns you want to see?
[*pun not intended, but gleefully embraced]
I'm not convinced by additional charging for car use. It may work for very specific circumstances, but it really ought to be the last resort.
All it does is make car use more costly, which will just end up making car journeys the preserve of the wealthy.
The more money you invest in car use, be it buying the car, the space to park it, the permit to drive it, etc. the more you are inclined to use it. So, just slapping more costs on, could drive a perverse behaviour where those who can afford to, will use it more often.
I would prefer to see an approach like they have in the Netherlands, where they design travel corridors to make cycling and public transport the quicker, easier and more pleasant option compared to driving in the city. Then even the wealthy can be tempted out of the car.
I agree that road pricing shouldn't be considered a comprehensive solution, but that doesn't mean it can't be part of the solution.
One advantage of road pricing is that it adds to the marginal costs of each journey. Your logic that "the more money you invest in car use... the more you are inclined to use it" makes sense for fixed costs. Once you've bought a car, taxed it, insured it, got an MOT etc. and it's sitting on your driveway ready to go, then currently each journey doesn't add much to the cost, so you might as well use it. Even things like wear and tear arguably should be included within marginal costs, but to most people they are one-off costs as part of an annual service or ad-hoc repair.
But if road pricing means it's going to cost £50 every morning and afternoon to do the school run, then it does change the equation.
Yes, I think that things like toll roads and smallish congestion charge areas with a high cost per use do have merit. But a broader, lower cost charge would likely just be absorbed. Great for a government wanting to raise some tax to replace VED, but it's not really going to encourage more environmentally friendly forms of transportation.
If you've bought a Ferrari, you might be annoyed that petrol is 25p a litre more, but you'd probably still choose to drive it vs taking the bus.
The manufacturers and their banks have spent the last 50 years lowering the 'barrier to entry' of vehicle 'ownership' so that it's not unusual to see as many vehicles parked at a house as there are adults in residence. So if anything the car is too cheap and does need to be more expensive to minimise it's impact. 90% idle time shows most are shockingly pointless (stat reference required). The motor industry marketing confuses the easily led that their choice of vehicle validates their life choices, rather than its just a means of transportation.
The point I'm (badly!) trying to get across, is if the only barrier to car use is cost, then if you can afford it, why would you choose the alternative if the car is quickest and most convenient?
Whilst you do not need to be vastly wealthy to own a car, it is a significant investment when compared with the per use cost. The per use cost would have to be very high to upset that cost/benefit equation.
But making short car journeys take longer routes, with modal filters, traffic light sequences that favour pedestrians and cyclists, removing destination parking etc. Then the convenience quotient tips more towards the cycling/bus/walking option and I think that is what drives most peoples behaviour.
Yep...for my ~10 year old car which I'll replace at ~100,000 miles fuel and fixed running costs (maintenance, insurance etc) are about £0.11/mile and £0.08/mile respectively. The sunk purchase cost from when I bought the car is about £0.10/mile. If you plan to keep a moderately cheap car until it's not logical to maintain it further then the purchase cost is actually not a massive part of the cost. The problem is that most people don't think of the purchase as a 'cost', it's just a fact of life...nobody thinks 'if I lose £10k in value on a car that I'll run for 50k/miles then each mile costs me 20p before anything else'.
The biggest issue in my mind is that the alternatives (buses, trains etc) are more obviously expensive. I.e. I'm off to London from Wales later. The train would be £95 round trip to get me to the wrong place where I'll need a further ~£10 of tube/bus tickets to actually get to my destination. That's actually not much more than the total cost of running the car. But today I will only have to pay £35 of fuel to get there, and I can take a bike. The remaining £55-60 of car costs will be met in annual servicing/MOT, insurance, and replacement lump sums that I'll just 'have' to meet. I think one solution would be for cars to have a 'net cost of your journey-ometer'.
I don't know if this is actually possible, but I've heard it suggested before that smart meters are something that would allow utilisation of charges based on how you are using your electricity. Thus, if you were charging a car's battery the smart meter would recognise that and you'd be charged a different rate to the electricity for your tv for example. This would be a simple way to "tax" vehicles for their fuel use, just fuel in the form of electricity rather than petrol.
It certainly is possible, and something to consider when signing up to a smart meter. It is feasible to discern the usage "signatures" of domestic appliances, and work out what dishwasher you have etc. Sniffing your electricity supply is very revealing!
https://www.researchgate.net/publication/293488364_Disaggregating_Smart_...
That's how all the kids are getting their kicks these days.
smart meters are clearly intended to enable variable pricing however it's complex since each type of generating is different. Obviously not much Solar at night, who knows when the wind blows, or when Putin will pump natural gas. Fusion isn't here yet, and Fission is less and less. However variable pricing will come as the suggestion that it's just so we can understand our usage better doesn't look to justify the costs. It's not as if the National Grid doesn't know demand and supply.
Any system based on the government tracking our location is unwelcome, and would only spawn a black market in GPS jammers. I don't see why they can't just slap the tax on the "fuel" (ie electricity) as before. It would be simple enough in the case of dedicated car chargers, and even for those few relying on a 13A domestic socket smart meters ought to be able to discern the usage signature and add the tax accordingly.
No need for complicated reductions for occupancy levels - just split the cost with your car-sharers as normal and the discount is right there.
Exactly. The usual argument of 'you've nothing to fear if you've done nothing wrong' is Horlicks: you would be approving legislation which assumes that our Govt doesn't go Full Authoritiarian in the near future. What if the Govt turns Evil?
Doesn't even need an "evil" government. It would start with an emotive terrorism or paedophilia prosecution (won't someone please think of the children) which turned on the defendant's location data, and pretty soon we'd have local authorities contesting school admissions based on school run tracking.
"It says here on Facebook on my phone in my smart car that the government wants us to have vaccination passports, can you believe it? That proves that they put tracking chips in them vaccines I reckon..."
That horse has bolted - it was out the door before "homeland security" two decades ago I suspect. (And recall the FOI requests turning up the use of terrorism legislation for checking on those leaving dog poo around?) Luckily for us whether corporations or governments the control tends to be tempered by infighting, laziness and plain ol' cock up.
'Turns'?
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