Your opinion: should the UK introduce “pay-as-you-drive” road pricing schemes in towns and cities?
The Transport Committee has launched an inquiry into zero emission vehicles and road pricing. It follows the acceleration of the ban on sales of new vehicles with combustion engines to 2030.
The new ban date has been widely hailed as a positive move for the UK’s “Green Industrial Revolution”, though critics suggest ten years might not give Britain enough time to prepare. And one thing that will need to be considered very carefully in the run-up to the ban is tax. A Government report published last week highlighted that tax revenues will be at significant risk as the UK switches to electric vehicles (EVs).
Hence the inquiry into road pricing schemes.
What can the Government do to recoup tax losses on EVs?
In 2019-20, tax receipts accounted for £37 billion, a little over 4% of total revenues. But one of the many incentives to make the switch from petrol and diesel vehicles to EVs is tax savings. There will be zero Benefit in Kind tax on EVs and hybrids with emissions from 1-50g/km in the 2020/2021 financial year. And there's no Vehicle Excise Duty (VED) for pure electric vehicles either.
Experts estimate a potential £40bn annual loss following the reduction of VED, with the added loss of fuel duty on top.
So as more make the switch and a gaping hole in tax opens up, how will the Government raise revenue elsewhere?
MPs are now considering road pricing or “pay-as-you-drive” schemes in towns and cities as a solution. So far there has been no indication of how much these schemes could cost. But Chair of the Transport Committee, Huw Merriman MP, said the committee will “assess whether new technologies and pricing can both be utilised to incentivise consumer behaviour change, reduce congestion and promote active travel.”
What does the public think?
Support for road pricing schemes is certainly growing. According to a recent survey by Ipsos Mori, three in five people (that’s 62%) would support schemes that charge people to drive in towns and cities.
What’s more, 25% claim to be “strongly” supportive of said road pricing schemes for raising tax revenues. And some 82% would support such schemes if they were specifically designed to reduce congestion and create a greener environment. Public support has come a long way since the last survey of this kind, in 2007, when 48% said they would be opposed to road pricing schemes.
Your part in the proposals
Parliament is currently accepting evidence from anyone with insights on the introduction of road pricing schemes. In particular, they’re looking for thoughts on...
- Feasibility of the new 2030 ban date
- How to encourage greater EV uptake
- Challenges regarding decarbonising buses
- Phasing out the sale of new diesel heavy goods vehicles
- The social impacts of a road pricing scheme
- The most appropriate schemes
- How to gain public support
- What other countries are doing
If you’ve got thoughts to share, click here to find out more about the inquiry and submit your evidence for consideration in the proposals.
And while you’re at it, drop a comment below or tell us what you’re submitting at email@example.com too! We’re fascinated by this subject and would love to know what you’re thinking.