Charging UK motorists a levy based on the miles they drive would be fairer and more popular than the current fuel duty regime, new research presented in Parliament shows.
In its report, entitled Miles Ahead, the Social Market Foundation (SMF) said that a national road-pricing system, based on a fixed per-mile charge, is urgently needed to make transport policy more fair and fiscally sustainable.
According to the think tank, the growth in EVs – which do not incur fuel duty – will eventually leave the Treasury with a £30bn gap in tax revenue, equal to around 2p on the basic rate of income tax. To avert that shortfall, the SMF has urged ministers to tell voters that a shift to road charging is “inevitable and sensible”.
Scott Corfe, SMF research director, said: “The current system of fuel duty is unfair, unpopular and unsustainable. The costs of driving are a factor in the cost-of-living crisis hitting many households, and fuel duty hits low-income people hardest.
“Road-pricing would be a progressive alternative, taking some of that burden away from those least able to pay it.”
The SMF believes a “simple” national road pricing regime with a fixed per mile charge could be “revenue neutral”, meaning it raises the same sums as fuel duty, but distributes the cost in a fairer way.
The SMF report includes polling showing that more people support (38%) than oppose (26%) road pricing as an alternative to fuel duty. The poll was carried out by Opinium, with a sample size of 3,000.
The SMF also conducted focus group research that showed that voters regard fuel duty as more unfair than other taxes.
The report also makes the case for including a free “mileage allowance” akin to the tax allowance, meaning low-use drivers would not pay any charge and high-mileage drivers would make a contribution proportionate to their use of the roads.
A road-pricing regime with a flat rate for each mile driven and an annual “free” miles allowance for every driver would cut annual costs for almost half of all motorists, the SMF said.
Lord George Young of Cookham, a former transport minister, who referred to the SMF report in the House of Lords on Monday during a debate on the economy in the Queen’s Speech, said: “Successive administrations have looked at the case for road pricing and found it perfectly reasonable and sensible – then done nothing because they believe the public will not accept the change.
“This report challenges that assumption. It shows that, as so often, the public are more sensible and mature than political debate gives them credit for. When voters think about the challenges ahead for transport and tax, they accept that road pricing is a prudent and necessary step to take.”
The SMF report was supported by a research grant from the European Climate Foundation and comes as ministers prepare to respond to the House of Commons Transport Select Committee, which earlier this year said that the UK government should start work on a road-pricing system “without delay”.
You can learn more about the key trends and challenges affecting senior decision-makers who have responsibility for tolling, intelligent transportation systems and road pricing at the 20th annual Road User Charging Conference in Brussels, Belgium on 07-08 March 2023. For more information, please visit www.roaduserchargingconference.co.uk