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
    +2

    Comment number 1094.

    If we're on the subject of paying taxes, perhaps people like that nice ex-Prime Minister Tony B would like to pay back-taxes on all their income and help the country out... Then the rest of us who are barely scratching a living any more but still paying our taxes might actually be able to afford to carry on driving for work, school, UK holidays, shopping and contributing to boosting the economy!!

  • rate this
    +1

    Comment number 1093.

    ALL road users should be charged for using the roads, including cyclists. There are many expensive purpose built cycle paths lying un-used by the sides of busy roads because cyclists seem to prefer to ride on the road even when they are provided. Why not introduce a cycling test, licence and insurance, recoup some of the wasted money and put it towards maintaining and improving roads for all?

  • rate this
    0

    Comment number 1092.

    1089.insert_name_here

    Yes, we do agree. I also agree with Rotherham Lad. He should consider being Minister of Transport come the revolution. Yorkshire folk generally have common sense. (I am fairly certain about this, as I was born in Sheffield). Why is so much of my income is taken in tax? How am I supposed to save for my retirement. Why am I paying crazy Green Fuel Taxes I didn't vote for?

  • rate this
    +1

    Comment number 1091.

    Motorists already pay road tax AND fuel duty! It doesn't cost more to drive at a particular time - this idea is mad, or don't they want anyone to go to work or shop? Many companies contracted to build/maintain roads charge over the odds, as do most suppliers to councils & govt depts eg a folder costs £1.75 via a contract supplier but 17p in a shop! The Govt should crack down on them & save money!

  • rate this
    0

    Comment number 1090.

    I am actually so sick of governments full stop.What makes them think they have the right to demand YOUR money from you any and every way they please.I wish 0% of the population would vote at the next election and have a complete revolution.It's my money, I earned it, I don't need you to spend it for me or give it to chuffing India!Someone should start a petition or something to get rid of the lot!

  • rate this
    0

    Comment number 1089.

    @1071.A Realist

    You seem to have missed my point. I think we broadly agree we're being fleeced.
    The question remains, what are people doing about it?
    Relying on persuading the fleecers to stop fleecing?
    Good luck with that!

  • rate this
    +1

    Comment number 1088.

    #1080 Steve
    Difficult to know what you're talking about - nothing to substantiate your emotion.

    #1087 Doc - Hopefully it wasn't Mc Kinsey's - they've done enough damage on behalf of NHS Assassin Lansley.

  • rate this
    +2

    Comment number 1087.

    I wonder who influenced this report? not the private companies who would be given carte blanche by this government to make almost guaranteed profits in a non competitive market surely? Scrap the Road Excise duty as it is just another tax & generates little income after removing the costs associated with enforcement. Fuele tax is the more equitable method of funding, heavy users pay more simple!

  • rate this
    +4

    Comment number 1086.

    #1081
    What private sector??
    The dopes in Government are on gold plated welfare
    ----------
    The one that's being allowed to take over our infrastructure.

    What gold plated welfare are you talking about - ministerial salaries and pensions are pocket money...or are you naive enough to believe that multi millionaires like Jeremy Hunt enter politics because of a sense of civic responsibility?

  • rate this
    0

    Comment number 1085.

    Ah yes,the 'Keep the poor people off the roads,motorways reserved for execs with company expenses' kind of stuff like they have in France. There even many of the truckers can't afford the tolls,so they block up the old country main roads and town centres instead of using bypasses and the autoroutes. Here,of course, the cunning plan is to make everyone pay on every road. If it moves,tax it!

  • rate this
    0

    Comment number 1084.

    Internet scams which fleece millions of pounds from people are illegal and public warnings are often issued

    Government tax scams which fleece millions of pounds from people are still completely legal... and are usually encouraged by the media

    Please bear these basic facts in mind

    Most of the money raised helps the most needy in society
    The House of Lords
    The Commons
    The civil service

    etc

  • rate this
    +2

    Comment number 1083.

    Why are motorists used to subsidise other taxpayers to such a massive extent?

    If a public service is needed then it should be paid for from general taxes payable by the majority.

  • rate this
    +3

    Comment number 1082.

    #1074
    Steve - lots of tax isn't collected by those that can most afford it- there's enough dough but we can't use it if it's hidden away in the carribean.

    Serfdom has been imposed by huge over inflated mortgages - the legacy of a the free market left to it's own devices.

  • rate this
    +1

    Comment number 1081.

    but it's just about raising taxes to fund the dopes in Government
    ------
    What on earth have you got against the private sector being allowed to cash in on our reliance upon road infrastructure?
    ------

    What private sector??
    The dopes in Government are on gold plated welfare

    Surely you're not naive enough to believe that this new money will ever be used on the roads network???

    Some people...

  • rate this
    +1

    Comment number 1080.

    #1069. Labour learned its lesson a long time ago. It learned that the working classes will vote for something that will leave them much worse off every time and still come back for more because the rosette is red.

    No wonder they are happy to kill education in this country. Its a great way of keeping the dumb even dumber!

  • rate this
    +1

    Comment number 1079.

    Maybe this would be better as some of us don't use the busy roads everyday but still have to pay as if we were! Not fair.

    James Grant
    www.themoneyball.net

  • rate this
    +1

    Comment number 1078.

    I think the best answer to road congestion is .... road congestion.

    It forces sensible decisions on the dispersion and siting of goods, employment and services.

  • Comment number 1077.

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

  • rate this
    -1

    Comment number 1076.

    #1071
    but it's just about raising taxes to fund the dopes in Government
    ----------
    What on earth have you got against the private sector being allowed to cash in on our reliance upon road infrastructure?

  • rate this
    -1

    Comment number 1075.

    Lots of people talking about costs. I wonder how many car share on their way to work. Myself and 3 others do. Commute from S.E. coast to London. Take in turn to drive (car-pool). 2 work together, others dropped off at a Tube station. For us, Tolls would not be significant (shared 4 ways). Look next time at how many cars have driver only in them.

 

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