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
    0

    Comment number 914.

    Re 909 tru_life re 897
    Oh yes it is. Pse explain how more fuel consumption doesn't produce more pollution & emissions. How higher mileage doesn't create more wear & tear.How spending more time on the road doesn't contribute to congestion & danger. Why should low consumers subsidise higher users?
    Taxing mileage would be open to dodgers as VED avoiders do now and more expensive to collect.

  • rate this
    +1

    Comment number 913.

    912.London_CyclePath
    2 Minutes ago
    899. Syx

    Or cyclists + pedestrians could pay VED and Fuel Duty exactly the same way cars do, would that equalise everything in your eyes? Total new income would be £0 by the way, as cyclists & pedestrians use no fuel and have no emissions.

    You only have no emissions if you don't breathe.

  • rate this
    -2

    Comment number 912.

    899. Syx

    Or cyclists + pedestrians could pay VED and Fuel Duty exactly the same way cars do, would that equalise everything in your eyes? Total new income would be £0 by the way, as cyclists & pedestrians use no fuel and have no emissions.

  • rate this
    +1

    Comment number 911.

    As a pensioner whose annual mileage is less than 10K I would be in favour of road tolls with the strict PROVISO that it would be less expensive than the present system of road fund tax, fuel tax and V.A.T. on service costs?
    But knowing how these things tend to work we could so easily be conned by this lousy government who haven't got a clue.

  • rate this
    +2

    Comment number 910.

    If the headline is 'the case' then there must also be a 'compelling' one for sacking the idiots who came up with this.

  • rate this
    -1

    Comment number 909.

    Overall new electric cars are not less polluting cars than the cars we have, tax on mileage, why tax drivers so much on fuel, road tax, insurance tax, ect
    NOT TRUE. 897.Erkules
    Those doing more mileage, in higher fuel consumption vehicles would rightly pay more. They are also the ones contributing more pollution, noise,emissions, congestion, wear & tear etc and nobody

  • rate this
    -1

    Comment number 908.

    @Wolf Man

    What are the specific methods that you are proposing we should use to stop these people from up north entering the M25 circle??

    Well for starters we can remove all Gregg's, Wilko's, Pound Lands etc. Also there should be no stretch limo's or hummers available in London, or anything along those lines. This would not solve the issue entirely but I think it'll be a good start.

  • rate this
    +3

    Comment number 907.

    898
    I'll tell what else I would suggest:
    What about spending the money raised from car tax on,er,the roads?
    But then,where would the millions wasted on foreign aid come from?

  • rate this
    +2

    Comment number 906.

    So people in the country who have to do more miles will pay more, and all of us who have invested in enviromentally acceptable cars in order to not have to pay so much for fuel will get hit another way. Meanwhile tax breaks for the rich and those with private jets...oh what a wonderfull world

  • rate this
    -2

    Comment number 905.

    895. carbonbasebloke


    We need to be able to control our borders

    ___

    Carbon,

    That is a good point,


    What are the specific methods that you are proposing we should use to stop these people from up north entering the M25 circle??

  • rate this
    +5

    Comment number 904.

    I'm willing to bet that road tax will stay, fuel tax will pay AND we get tolls.

  • rate this
    +1

    Comment number 903.

    No matter what you do it is going to be unfair. Should you be charged more because of the time your employers say you should be at work, should those who have to travel large distances to find work (especially now) have even greater expenses? Will private companies hold certain travellers to ransom (almost certainly)? No matter what happens one thing is certain-the general public will be worse off

  • rate this
    0

    Comment number 902.

    You can tax the charge points of the not so green electric cars.

    Editors' Pick
    7 Minutes ago

    I'm not too sure why people are getting so upset over this; roads need paying for!

    I am considering moving to electric for my next car, and if that is inevitable for everyone here, then how are the government going to pay for our roads? They can't start over-taxing electricity now can they.

  • Comment number 901.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +2

    Comment number 900.

    The governments in this country are always dreaming up new ways of bleeding the British people dry of every penny they can get from us... Petrol, road tax, VAT... they will think of other ways to grab more money from us. I'm surprised they haven't introduced an internet license fee yet! Same will happen here that has happened abroad in the middle east! We are all getting sick to death of it!

  • rate this
    +3

    Comment number 899.

    @778 If you believe that cyclists already pay their fair share via income tax, then so do motorists with jobs - and VED/Fuel Tax should be abolished accordingly.

  • rate this
    -28

    Comment number 898.

    I'm not too sure why people are getting so upset over this; roads need paying for!

    I am considering moving to electric for my next car, and if that is inevitable for everyone here, then how are the government going to pay for our roads? They can't start over-taxing electricity now can they.

    Either the roads go private, or we pay 4 times as much for our road tax. :P

    What else would you suggest?

  • rate this
    +13

    Comment number 897.

    Fuel tax is the most logical. Those doing more mileage, in higher fuel consumption vehicles would rightly pay more. They are also the ones contributing more pollution, noise,emissions, congestion, wear & tear etc and nobody could avoid paying their fair share. Unlike the VED dodgers do now.
    Fuel consumption is a good proxy for vehicle taxing but I agree that of itself, it won't reduce congestion

  • rate this
    +5

    Comment number 896.

    Just like the reliable cheaper railways then, no thanks, another government mess.

  • rate this
    +8

    Comment number 895.

    The problem is we have too many people in this country, too many cars, too many children trying to get into decent schools, too many people on hospital waiting list.

    We need to be able to control our borders, and that includes within the EU.

 

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