Compelling case for UK road charging, IFS study says

Road Private money could be used for road maintenance in future if the prime minister has his way

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There is a "compelling" case for road charging in the UK rather than the current system funded by taxes on fuel, a study has suggested.

The report by the Institute for Fiscal Studies (IFS), funded by the the RAC Foundation, suggested a "radical overhaul" of road taxes was needed.

Fuel and Vehicle Excise duties raise about £38bn a year but are set to fall.

The Treasury said possible new ways of funding roads would not involve tolls or pricing on existing routes.

It added that revenue from duties was currently rising.

Forecasts from the Office for Budget Responsibility predict tax revenues from duties will fall by £13bn a year, at current prices, by 2029, as cars become electrified and more fuel-efficient.

Plugging the gap would require a 50% rise in fuel duty, according to the IFS.

It recommends moving towards a nationwide system of road charging, including road tolls, to account for this loss of revenue.

The IFS says a solution would be to charge drivers by the mile, with higher pricing in congested areas at peak times. Drivers in the countryside would be likely to pay less.

"Such a move would generate substantial economic efficiency gains from reduced congestion, reduce the tax levied on the majority of miles driven, leave many (particularly rural) motorists better off, and provide a stable long-term footing for motoring taxes without necessarily raising net additional revenue from drivers," the IFS said.

Private roads?

The IFS said that the current system of taxation on fuel "cannot vary according to time and location", and so is "fundamentally unable to account for" differences such as levels of congestion and demand.

"Taxes on road use, however, would be able to do so," it said.

The Treasury and Department for Transport are carrying out a feasibility study looking at "new ownership and financing models" for the roads, with the results due in the autumn.

Prime Minister David Cameron, meanwhile, has suggested that private money be used to improve England's road network.

The government is consulting on charging tolls to motorists, following on from the existing M6 toll road.

It is also considering "shadow tolls" - a fee to the road maintenance company per driver using a road, but paid by the government rather than drivers.

Under the plans, companies would lease motorways and trunk roads from the government, maintaining and perhaps improving them by adding lanes, for which - as long as they meet targets - they would be entitled to a share of road taxes.

The construction of new roads could also be taken on by the private sector.

An online petition against a national road pricing plan by the last Labour government secured two million signatures.


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  • rate this

    Comment number 354.

    The govt already raises far more from fuel tax than it spends on the roads. If it was serious about congestion it would take action against maintenance that involves road closures for months on end (I'm thinking M1) and ridiculous traffic lighted works where there is no work going on and nothing blocking the road.

  • rate this

    Comment number 353.

    The government says it is working to make things fairer. What on earth is fair about the huge tax burden on the ordinary motorist. Even Mr Cameron found time to joke about this when talking to students in the US. He said something to the effect of "If you think fuel prices are high in the US you would wince if you had to pay the UK fuel taxes".

    Well we have had enough. We want a fair deal!

  • rate this

    Comment number 352.

    Anyone who uses the M25 Dartford Crossing knows that road toll booths can _cause_ congestion.

    And the M6 toll shows that if there is an alternative, people will use it, causing toll revenues to spiral down, requiring big toll price hikes.

  • rate this

    Comment number 351.

    Most offices open 09:00-17:00, school runs 09:00-15:00, high street 09:00-17:00, GP surgeries 09:00-18:00. Do we need every thing open at the same time ? there are 24 hrs in a day. If the above mention times are spaced out between 08:00-22:00 congestion will surely reduce and so will CO2 emission and most importantly Fuel Cost and Stress Levels! It is simple primary level Maths!

  • rate this

    Comment number 350.

    Cameron and friends seem to seek to destroy any semblance of govt. by absolving it of any of its responsibilities to its citizens and voters. They are instilling in the country a state of unease and unrest that leads to chaotic situations. In such chaotic situations, they will be more easily able to manipulate things so that they and their mates can parasitize on ordinary people even more. Resist!

  • rate this

    Comment number 349.

    sadly money does not grow on trees, so either pay tax or put up with the potholes

  • rate this

    Comment number 348.


    The law of unintended consequences....

    Yes it's a paradox, we can all see it (and have done many times before) but our "most talented" leaders don't seem to ever consider the knock on effect of their decisions.

    1. Are they totally dumb?
    2. Is this an evil plan to cause major social change by putting us backwards 200 years?

    Any thoughts on this?

  • rate this

    Comment number 347.

    Looks like many haven't read the article. If more people are using electric cars then they won't be paying fuel duty so that money is then not available to the government.

    But surely the point of electric cars is they don't directly pollute and electricity can be produced in numerous ways, so it's right that they aren't taxed so much.

  • rate this

    Comment number 346.

    "An online petition against a national road pricing plan by the last Labour government secured two million signatures" Two million? And now tories will go ahead and do the same. What the hell is the point in changing from labour to tory? They are both a disgrace, neither listen to or consult with the public. They do what they want when they want.When Cameron gets booted out Labour will carry on

  • rate this

    Comment number 345.

    I live in Essex and the worst congestion we see is the Dartford TOLL to cross the Thames. If the Government ring fenced the road tax generated, and used it only for the roads, we’d have a half decent network. It works in France because they roughly have the same population for twice the space.

  • rate this

    Comment number 344.

    The government needs to recognise that, whilst cars may indeed be clogging up our roads and contributing heavily to pollution, they are also essential to our us as an economy and indeed as a species.

    Our society relies on the use of fuel (and hence cars) to move us around. If you want to change that, you need to change the ENTIRE economy, not just force us off the road.

  • rate this

    Comment number 343.

    Privatising the roads will only further push up the cost of living as haulage firms will have to pay the tolls too. They in turn, will simply pass the added cost onto the consumer. A better way might be to sort out our archaic, disjointed and crumbling public transport system and reduce fares to encourage people to use that rather than yet another stealth tax many can ill afford.

  • rate this

    Comment number 342.

    Those people who are saying this is another way for the government to take more out of our pockets need to read the story (Daffy Duck, I mean you.) The IFS is nothing to do with the government.

  • rate this

    Comment number 341.

    Why do people continually refer to "Road Tax" - that was abolished years ago. The fact is our roads cost a huge amount to maintain (far more than the railways) that the amount taken in Vehicle Excise and Fuel Duty does not cover the cost. It would be far better to reopen railway lines that have been closed.

  • rate this

    Comment number 340.

    A close friend in California stopped using the freeway for his daily commute as:
    1)The “Oyster card” didn’t always work and you had to resort to cash.
    2)Everybody slowed down to try and make sure the “Oyster card” does work.
    3)The journey is still a 20mph crawl.
    4)The road is littered with craters.
    Some solution!
    He now does the commute along the “old road” on a motorbike.

  • rate this

    Comment number 339.

    Like many people, I lost my job in the recession. After 4 months out of work I progressively widened my search area to find work. I found a job 30 miles away and now commute everyday. Because of all the changes I would have to make public transport would take over 3 hours each way so I have to drive. I even changed my car to a hybrid to save on fuel. Why should I be penalised for this!

  • rate this

    Comment number 338.

    Conjestion is high & something needs to change to reduce traffic on our roads. Hear the complaints about the cost of fuel, yet witness the number of single occupancy vehicles at rush our or those driving 1/2 mile for the school run. Public transport and ride share schemes do exist, but it's easier to jump in your car and then moan about the traffic and cost of fuel....the problem lies within

  • rate this

    Comment number 337.

    It will surely come with ANPR tracking or GPS based devices that cannot be removed without sending a signal.

    The British public is already hardly concerned about privacy: You can already be tracked by numerous ANPR cams and nobody complains. So let's expand Big Brother!

    Road pricing comes in convenient and it's not only about money, it's about power.

  • rate this

    Comment number 336.

    I would suggest to you all that if you really want to get rid of this kind of cruddocks, we need to take a stand through the ballot boxes. Dispense with the main parties and vote for people that stand on principle - don't care if you vote UKIP or Green, but avoid the big three and vote for change. If you don't care for UKIP or Green, stand yourself, but whatever you do, don't stand by idle.

  • rate this

    Comment number 335.

    There is an alternative. Massive investment in railways; both mainline and light railways like DLR. Reinstate dual track lines to increase capacity eg Cotswold Line. The routes are already there; they were surveyed by the Victorians. They will be almost pollution free. They will provide jobs and skills training. The same can be done for freight as well. It just needs total commitment.


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