Road pricing schemes have been a subject of much debate historically in Great Britain and, despite periods of focussed interest, has proven politically challenging for many successive governments. The last major consideration of a national road pricing scheme was under the Labour Government of 1997-2010 but it was not taken forward. Today, road pricing schemes in Great Britain are confined to a limited number of toll roads (including motorways, bridges and tunnels) and charging zones, most notably the London Congestion Charge zone. The latter are due to increase significantly in number as proposals for clean air and zero emission zones are proposed and implemented.
The picture contrasts with that internationally where road pricing schemes and tolls are much more commonplace. Many of them are underpinned and facilitated by advances in technology both inside and outside vehicles.
However, it has been known for some time that the discussion over national road pricing will inevitably return - driven by the accelerating transition to zero emission vehicles (see for example our previous blog). Currently zero emission vehicles do not pay fuel duty or vehicle excise duty. These two taxes on ICE and hybrid vehicles currently comprise some 4% of all tax revenues and fund the vast majority of road maintenance and development.
"Fuel duty and vehicle excise duty raise some £35 billion a year. Approximately 20% of that revenue is disbursed on maintaining and developing the roads. Neither fuel duty nor vehicle excise duty are currently levied on electric vehicles. The Government is phasing out the sale of petrol and diesel cars by 2030. Under the current system of fuel duty and vehicle excise duty, that policy will reduce tax revenues obtained from motoring to zero over the next 20 years. Without radical reform, policies to deliver net zero emissions by 2050 will result in zero revenue for the Government from motoring taxation. A failure to replace existing motoring taxes with an alternative road charging mechanism will lead to either decreased investment in public services, including road maintenance, or increased Government borrowing."
The Transport Select Committee urges the Government to have an "honest conversation" with the public and start looking seriously at alternative road charging mechanisms that are fair, sustainable, accepted by the public, utilise technology and data and do not undermine wider net zero policies on active travel and public transport modal shift. It is a conversation that needs to be balanced with the need to incentivise the early stages of transition to zero emission vehicles but it is one that the public has shown through polling that it is increasingly receptive to and recognises a need to address. So the time to talk is coming.
The Government must start an honest conversation with the public on the funding implications for road development and maintenance and for other essential public services of decreased revenue from vehicle excise duty and fuel duty.