In 2021/22, drivers paid £33bn in fuel duty and vehicle excise
duty. But the Government spent only £5.4bn on national roads and
£6.4bn on local roads in the same period. This system is not fair
for drivers or the general public, who suffer the consequences of
polluting vehicles through negative health outcomes.
‘The Future of Driving’, co-authored by Centre for Policy
Studies' Energy and Environment Researcher Dillon Smith and CPS
Research Director Tom Clougherty, makes a series of vital
recommendations to redress the balance.
The report suggests introducing a ‘pay as you drive’ scheme for
Zero Emission Vehicles (ZEVs), becoming the only form of motoring
taxation for those vehicles. ZEVs would be charged a flat rate
for every mile they drive – but still pay significantly less than
their petrol and diesel counterparts. While everyone would
receive a set allocation of tax-free miles every year, the
allocation would be higher for those living in remote areas with
fewer transport alternatives.
Eventually, as the share of ZEVs on the roads grows, this new per
mile charging system could completely replace fuel duty and
vehicle excise duty for all vehicles – exchanging an outdated and
onerous tax system with something ‘future-proof’ and much fairer
towards drivers.
The report also shows that voters remain concerned about air
quality and congestion, with significant numbers believing that
government has not done enough to tackle either. Polling by BMG
Research for the CPS shows strong support for action on both,
including among 2019 Conservative voters.
However, the focus groups also made clear that local policymakers
need to work harder to convince voters that these are targeted
measures to improve air quality and congestion rather than purely
a revenue raiser. The report recommends improved communication
strategies and hypothecation as ways to achieve this. Just as
drivers would like to see money from road taxes spent on
improving the roads, they also back money from clean air zones
being used to improve transport or to help people upgrade to
cleaner vehicles.
Read the full report
Responding to Centre for Policy Studies ‘Future of
Driving’ report, Silviya Barrett of Campaign for Better Transport
said:
“It’s good to see that the Centre for Policy Studies has drawn on
our own pay-as-you-drive research to reach the same conclusion
that our current system of vehicle taxation is outdated and
should be replaced with a per-mile charge.
It is only fair that drivers pay their share of tax to address
the economic costs incurred by motoring pollution and congestion.
It is important that proceeds are invested in public transport as
well as roads upkeep, to provide good travel options for
everyone.
The Government should establish a cross-party commission as early
as possible on how to fairly reform vehicle taxation to plug the
revenue gap created by the rollout of EVs and to improve air
quality and congestion.”
