In this week’s poll we’re asking whether readers think a “pay by the mile” model should be used to generate the tax revenues that will be lost through the switch to zero carbon motoring.
The UK government is reported to be considering road pricing to make up for an estimated £40bn tax shortfall resulting from the proposed 2030 ban on the sale of new petrol and diesel vehicles.
Expected to be announced this week, the fast-tracking of the ban on sales of fossil-fuelled vehicles from the original date of 2035 has been hailed by some as a sign of the government’s strengthening commitment to its net-zero strategy, and a statement of intent that it’s serious about supporting the low carbon vehicle sector.
However, with taxes on motoring currently raising around £40bn per year, and the bulk of this revenue linked to fuel duties, it’s feared that without significant changes to the tax system the speeded up transition could leave a huge hole in public finances.
The government is said to be considering a number of options for addressing this, including – perhaps most controversially – the introduction of a national road-pricing scheme that would use either road tolls or a “pay as you drive” concept to replace the lost tax revenue.
Road-pricing has been suggested many times in the past, and has never gone down particularly well. When former PM Tony Blair explored the idea back in 2007, motoring groups and the shadow conservative government of the time accused him of trying to introduce a stealth tax and “big brother” surveillance system.
Whilst any serious attempt to revisit the issue is likely to be similarly unpopular with huge swathes of the population, a lot has changed since 2007. And the shift to zero carbon transportation certainly creates a more compelling case for such a scheme.
But should the government press ahead with this plan, it’s going to have to tread incredibly carefully and work hard with industry to develop a technologically complex system that is practical to implement and fair and nuanced in use: which doesn’t – for instance – disproportionately impact communities with poor transport links.
In this week’s poll we’re asking a simple question: is road-pricing the solution to the problem? But as always we would welcome your comments on the complexities of this debate below the line.
Do you think such a scheme is the right solution to the problem? And if so, how should it be structured? Should, for instance, the drivers of the large number of petrol driven vehicles remaining on the roads – who will still presumably be paying vehicle tax – be exempt from the charge?
Perhaps you feel a less divisive solution might be to continue with some form of motoring tax for all vehicles regardless of their green credentials. But then how would this be balanced with the incentives that are currently in place to encourage the adoption of low carbon vehicles?
Or perhaps our relationship with transport technology will have altered so fundamentally by 2030 that none of these things will be issues.
As always, we look forward to hearing your thoughts. Please note, that all comments are moderated.
Surely it’s a no-brainer? A fair system is where people pay for what they use. Fuel tax is pretty close, particularly because it makes us pay more for luxury. It’s not difficult to devise systems that protect privacy, or at least don’t degrade it more than we have now.
The poll should include the option of ‘road pricing to completely replace road tax’.
We already pay to use our roads.
We are unlikely to want to pay twice.
We already do! Based on how many miles we drive and how much fuel we use. The more mileage done the more fuel used and hence the greater the amount of fuel duty and VAT we pay. The more mileage the the more frequent the maintenance, servicing and replacements, therefore the more VAT paid. We pay a fixed charge which used to be called Road Tax, which was how roads were built and maintained in the early days and now a fixed charge merely for the privilege of possessing a vehicle, duplicated if we own more than one, which we can only use one at a time! Talk of this charge is merely another way of extracting more revenue from us as individuals.
I think it’s inevitable. Where else will the government get the revenue lost by the switch from fossil fuels to electric? You can’t tax electricity to the same extent. It could also eliminate city centre congestion charging systems , road tolls and bridge tolls. We would need a way to charge vehicles coming over from the continent but it’s likely that all of Europe will do the same so it could be co-ordinated.
Yes, but not in the big-brother, GPS-tracked manner it was proposed under Blair (though this was before black-boxes in cars for motor insurance).
Road pricing could be charged in the same manner as domestic gas or electric is now – you can submit odometer readings, to get an accurate estimate of use, and this can be verified by a third party during the MOT. If people want the convenience, perhaps a module could plug into a car and use the same network as for smart-meters to send the usage data automatically.
GPS tracking is not going to be accepted, but simple tax on mileage would be hard to argue against.
This proposal is a double-whammy against the “poorer” motorist. The wealthy motorist will grumble a bit but no real problem: his electric car will be provided by the company, so he will not suffer the cost penalty also, he will avoid the fuel-tax which will no doubt be increased too. Government initiatives (i.e. subsidies) will be clawed back in the mileage charge as part of a triple whammy.
The ordinary motorist will be faced with buying an expensive new EV, a second-hand EV or a second-hand ICE and paying fuel tax plus a mileage tax . In simple economic terms, the fleet of petrol / diesel cars will be kept going as long as motorists can do so, then the poorer motorist will be forced off the roads ….. Progress????
If, ultra fast internet infrastructure is in place and less travelling is required for work reasons. I don’t see any reason why a pay per mile tax shouldn’t be implemented. Assuming the average mileage less 20% is already covered in initial road tax costs.
Road pricing is the unevitable answer to lost revenue from fuel duty BUT it must be VERY carefully designed. ALL of the following factors should be ‘built -in’ to any road pricing scheme that eventually is introduced:
(i) The scheme MUST NOT create double taxation for drivers of carbon-fuelled vehicles
(ii) A tax free mileage MUST be allowed to avoid hardship for people who live in rural areas and who are faced with unavoidable travel just as part of daily life.
(iii) Any kind of toll booth system must be avoided at all costs.
(iv) Ideally the tax should be collected as part of an on-board recording system that could be made mandatory (and incorruptible) on all electric/hydrogen powered cars. It should NOT record location for taxation purposes. (i.e. record distance but not locations visited*)
(v) The new system definitely must not collect more tax per mile than was taken under the fuel tax system and ideally, should be significantly less.
(vi) Where higher tax charges might be deemed necessary (e.g. inner city congested areas) a higher tax rate could be triggered by a radio beam system)
(vii) Possibly some form of on-board ‘black box’ system could be developed that would avoid the need to incorporate any software into vehicle design and which could be incorporated into vehicle visiting from abroad so that all the foreign trucks (and some cars) would be charged too, hence avoiding loss of tax from foreign operators.
With this degree of complexity and a need to co-ordinate with other countries (I’m still thinking of Europe) it will probably take until 2030 to develop a viable tax scheme – so starting to plan now is appropriate.
We can’t have roads for free and without fuel duty, which is in effect a Tax per mile, then we should expect to pay for using our roads.
There is a danger of driving traffic away from major routes and causing congestion and danger on minor roads. However, surely we have the technology to implement a fair ‘pay as you go’ system.
In view we pay a road tax that all may not be spent on roads but diverted to other needs, then we pay tax on the petrol we use , for those who do the most miles they are already paying more at the pump and that seems a fairer way if this is going to happen.
Road pricing would seem to be the only way to go, but unless it is implemented alongside better and more attractively priced public transport it could be very unfair to some sectors of society.
Road usage charging only really works fairly as a means to pay for the maintenance of the whole road network if you are able to charge for all usage, regardless of route. This may be possible using GPS tracking of all vehicles, but is not easy to securely implement to existing vehicle stock. Careful consideration needs to be given to the incentive repercussions: is it really desirable to encourage everyone to live in high density town’s and cities where there are mass transit systems and short journey distances? This may benefit transport energy consumption, but there are a lot of downsides.
As an aside, 2030 will may see an end to sales of new ICE only vehicles, but it is a long way from the end of the internal combustion engine in vehicles. The majority of the vehicles in 2030 are likely to be hybrids, quite possibly with very limited electric only capability (defined by limited range and tight driving style constraints), which are actually less environmentally friendly than an ICE only alternative the rest of the time.
Its just wrong to replace an unfair tax with one that is even unfairer and worst represents a further big brother intrusion into the lives of citzens.
At least the fuel tax is partially arguable on the grounds of being a green tax. Road usage isn’t.
The lost income needs to come via general taxation, probably the fairest is a rise in income tax.
The vehicle tax (road fund license) actual covers the cost of roads (and more!)
Yes road pricing is fairer and cyclists should also be required to pay.
Bear in mind that electricity pricing is going to change. If you want to use electricity at 6pm on a cold, still , winter’s day, you’ll have to pay more than if you use it at 3am, or when it’s sunny or windy.
Like wise with roads. You will have to pay more to use a congested road at 5pm than in the wilds of North Yorkshire at 3am (though your insurance may be higher on the latter). And that needs GPS and map matching.
They need to start planning now by including the hardware in all new electric vehicles sold. Most of that hardware is already there under the E-Call directive (GPS positioning), and will also be needed for speed limit warnings / enforcement.
Then just road price electric vehicles from 2030, when internal combustion engines can’t be purchased any more. Those car remaining will pay a fuel tax, which would probably be set somewhat higher than it is now.
Jon, where did you get your figure of a £40bn shortfall?
Given that the TOTAL income from fuel duty is only around £27 bn, and electric cars represent only a tiny percentage of the vehicle parc… and even when all cars eventually become electric we still can’t see anywhere near a £27 bn shortfall. Is this an example of clickbait( aka fake news)?
We need more real information. Could you oblige with some facts and figures? For example, how much is fuel (aka energy ) duty for the average car per mile? And, if electric cars had pay the same energy duty per mile, what would that do to the cost comparison between IC and electric vehicles?
The £40bn figure comes from a treasury document reportedly prepared for the Chancellor. It includes fuel duty and Vehicle excise duty
No as some roads will cost more.
Stick it on fuel duty then the more miles the more you pay, do the same with vehicle excise duty as well.
While they at it why not do the same with basic insurance as I believe that was done in New Zealand.
Would make the fuel more expensive but solves more than one problem!
No-one’s talking about the human cost of this. Some newspapers were reporting £1.50/mile which is ludicrous and would make road travel only for the rich. Such a rate would rip families apart as they couldn’t afford to visit each other; it would further decimate town centres as people would think twice about visiting the town if it was even a 20 mile round trip – much further for many in rural communities; it would deprive those living in cities on middle/lower incomes visits to the countryside and seaside; it would hit staying in the UK for holidays if it costs several hundred pounds to drive to Cornwall or West Wales or wherever and cause significant economic damage to those communities who rely on tourists etc. etc etc. Something dreamed up by academics and those living in their urban bubbles. A bad idea all round.
As a country dweller, I often think successive governments have a plan to tax us all into towns and cities. Road pricing is another way of doing this as the further you travel the more you pay. Similarly I cannot afford to purchase a new electric car, and wonder how many others will be in this position.
If necessary “tag” and tax electricity used to charge vehicles from public networks.
The charger should be on board the vehicle and identify the user by name and the vehicle.
The electricity would then be sold at whatever price was appropriate.
Dont hold your breath if this is driven by a Gov app.
Seeing as electric vehicles need a dedicated charging point, why can we not have a tax on charging your car ? It would (obviously) be dearer the more miles you use, similar to the current fuel duty. Charges for use of charging points on motorways would (as usual) be higher than at home.
Anyone still considering getting a smart electricity meter? Think I’ll be keeping my old one, which is too dumb to know what I use home electricity for …
Whatever system is finally decided upon this time it needs to ensure that HGV’s pay an appropriate amount for the damage to our roadways.
They are largely responsible for ripping the road surfaces to shreds and at present Joe Bloggs the motorist shoulders the largest proportion of the cost of repair. Special fuel rates with lower tax ensures that the ordinary motorist subsidises the HGV’s.
Also need to make certain that foreign owned juggernauts pay for using the highways to THIS country as this may be a loophole to be exploited by the haulage companies in general.
Can just imagine British companies registering abroad to dodge the taxes as is presently presently done by many international companies – whom I will not name but we all know who they are.
It seems unfair that today’s drivers are having to pay so much to support the introduction of zero emission vehicles, but the longer we leave it the higher the costs of dealing with climate change and air pollution will become. This should have been started decades ago. In the 1970s the UK electric vehicle industry led the world but many electric vehicle companies and developers of renewable energy were closed due to competition from established industries. The Government added to the problems faced by innovative companies as they gave substantial funds for the motor industry to install large batteries in heavy vehicles.
While advanced batteries and fuel cells were being developed, engineers built an efficient hybrid system which was wanted by the Passenger Transport Executives, the Freight Transport Association and the Metropolitan Authorities around the country. This hybrid was also supported by the Department of Energy. The Government closed the Metropolitan Authorities and the Passenger Transport Executives and the closure of the Department of Energy left the UK Government without scientific advice in this field.
Companies developing cost effective fuel cells were opposed by established energy suppliers and suppliers to the motor industry. Other engineers spent years developing renewable energy systems. As well as local solar and wind energy, there are millions of tons of renewable energy which could be recycled from organic waste and landfill sites. The tax on fuels should reflect the damage caused. There should be more support for renewable fuels, walking, cycling and using public transport.
UK Government measures to tackle climate change and air pollution help marketing not R & D. In the case of climate change, governments have provided incentives such as carbon pricing, feed in tariffs and regulatory standards. The British engineer, the late Dr Francis Bacon OBE, FRS, developed the first practical working fuel cell which was used in the Apollo space programme. Referring to the lack of UK government support for fuel cells he said:
“They do not understand the need for development.”
http://www.fuelcellpower.wordpress.com http://www.greenmotorsport.com
Tax on fuel is one way but if you have an EV charged from your solar panel/power wall that won’t work. Tax per mile is OK not via GPS but via an annual charge added to the MOT/service as long as the charge is not that big – somewhat less than the 20p/mile or so that it costs to drive an ICE car to help, particularly those in rural communities. Good public transport is a good idea anyway but the pandemic has screwed that at the moment. But what does this £40bn argument represent? It is because we are told to believe there is a shortage of money. It is the same argument as the ‘we are all in it together’ justification for austerity. There is loads of money floating around. Some would borrow it and not worry. I wouldn’t, a heavily indebted currency is very vulnerable. I would introduce a global wealth tax on citizens of 1% on wealth above £10m, a sector-dependent witholding sales tax on businesses turning over £1m or more a month set against their income/corporation tax wherever they pay it and a 10% (maybe even 20%) witholding tax on dividend, much of which disappears overseas, set against income/corporation tax again wherever it is paid. Add that lot up (and more) and £40bn is small change. Under double taxation rules this would also punish those countries that maintain very low company and income taxes. Tax wealth, not income. But that’s for another day!
There isn’t, it’s just in the wrong pockets. Don’t think of borrowing it, tax wealth, add
I’m sure Tim Donaldson is just trying to wind the cyclists amongst us up. I was going to write a considered comment about who should pay for a dedicated vehicle-free cycle track alongside the road network but then thought better of it. Enjoy driving your killing weapon, Tim! (I’m a motorist too!)
There is no such thing as ‘Road Tax’ in the UK and hasn’t been since 1937. What we have is Vehicle Excise Duty (VED), which is banded according to the carbon emissions of the vehicle, with zero-emission vehicles being zero-rated. Hence the problem.
Vehicles, at the moment , pay road fund licence dependant on their emissions. How is it then that motorcycles pay road fund licence according to their engine size. My Motorcycle is an 850 cc Yamaha with low emissions, a cat and does very little damage to the roads of this country. I still pay £93 a year for the privilege. The drivers of cars, vans, trucks ect. have a much bigger stick to wave at the government than bikers do. And what is going to happen to older motorcycles when the fossil fuels finally become unavailable ? Do we go back to getting fuel from the local chemist .
The motorist seems to be the whipping boy whenever the government wants to raise more money to waste.
If applied to LGVs then there might be some sensible levelling up of the playing field for the movement of freight. We have become used to cheap fuel and cheap haulage (easy entry and exit…compare to becoming a train operator) so any move from this is going to be accompanied by screaming and kicking from those likely to be hit.
The whole issue of externalities/externally imposed costs needs to be reflected into any pay as you go option. Road freight imposes much more wear & tear on the road infrastructure, is proportionately involved in more accidents and is a major generator of noise and gaseous pollutants. The rail system should not assume any discomfiture experienced by road freight will necessarily induce modal shift. Rail needs to significantly up its product, service and commercial positioning, get its cost base down and asset productivity up by huge amounts if it is to win and retain business on merit.
Road pricing should be introduced, drivers are not paying the full costs, taxpayers are funding £56 billion to scrap old North Sea oil platforms and the comments about cost ignore both the price of climate change and poor air quality which kills 40,000 brits, fills up costly NHS wards with asthma and cardiovascular patients and stunts children’s lung development.
Reading some of the comments its clear that people haven’t read the article.
When we move to electric cars, we stop paying fuel duty. So road pricing would be a replacement tax – not an additional tax. There are good economic reasons to have road pricing as well – it can be varied not just according to distance, but also congestion levels. Congestion is the biggest social cost of driving – more so than pollution. Ideally even now we’d have lower fuel duty and road pricing that is higher in more congested areas, encouraging the more efficient use of the limited road space available.
I would hope engineers could see the sense in it – its one of the reasons why you get cross overs by engineers into economics. That understanding of the importance of systems. And being able to deal with numbers!
Graham Taylor: CO2 emissions for motorcycles are higher than you might think and also less published (compared to cars). According to this report: https://www.lowcvp.org.uk/assets/presentations/MCI%20-%20Greg%20Archer.pdf the motorcycle fleet average emits 110 g/km and rider “Helmi22″‘s Yamaha TDM850 emits 160 g/km https://www.spritmonitor.de/en/detail/256952.html
Considering my 150 g/km car costs me £205 VED, your £93 sounds very reasonable to me …
But only at a very low rate – they take up less space and utilise the waste, rough bit, full of nails on the left that motorist don’t normally want to use 🙂
Absolutely we need road pricing. Cost per mile should to be linked to (at least) efficiency of vehicle used, time of day (congestion impacts) and location. Technology now makes all this possible. We need better – more direct – policy levers to tackle climate change impacts as well as congestion. (And Treasury has to get the revenue from somewhere.)
A pay per km coupled with an incentive for users of older vehicles to be taken off the road with a recycling incentive Market competition should force EV producers to lower prices. A tax on high end vehicles should be used to remove the highest polluting, older fossil fuelled vehicles first.
I once read a study based on a poll of people from all income levels, which asked at what level taxes should be raised to increase public spending. Irrespective of income, the answer was generally “starting at people who earn about a third more than I do” i.e. someone else but not me
I don’t expect to convince John Logsdon of the benefits of “Laffer economics”, but other contributors might like to view this video https://youtu.be/BomQxCG5VG4 which explains why taxing the rich isn’t always an easy and painless way of raising the huge sums of revenue we’re going to need
We need to keep the incentive for efficient cars. Note the small number of small electric cars, they are mostly large SUVs. I suspect my petrol Aygo has a smaller carbon footprint that an electric SUV.
Trevor, Grahams motorcycle may produce 160g/km and you car only 150. however, unless your car has stop/start technology it will be polluting more in traffic jams than his bike that will weave through.
All they have to do is put the charging into the actual road, thereby reducing the heavy weight of batteries you don’t need. By using induction charging you can charge directly the price per vehicle. Then the cars and other vehicles need only a small battery to keep them going for approx 100 miles. This would also solve the problem where people have to park their cars at home trying to charge them up at night or whenever. There are a lot of properties like flats, terrace houses etc that you can not get everyone’s cars in to park nearby.
How’s it supposed to work then ?
If it’s odometer based then I’ll disconnect my odometer, won’t I ?
CCTV and number plate recognition on every mile of road, not a chance, unfeasible and too expensive.
Financial planning 101: if your plan is financially unachievable, throw it out and start again.
If the government is losing £40Bn per year because of loss of fuel duty then charge windmill and solar cell companies and EV motorists the lost £40Bn per year – Oh dear, does that suddenly make the renewables and EV market unattractive and too expensive ? Welcome to the real world.
More hot air from this failing government designed to attract the gullible ?
When Blair looked at road pricing, one of the major drawbacks was the £65 billion in 2007, to put in the charging/enforcing infrastructure. Each vehicle needs a black box at x hundred pounds. Then satellite & roadside sensors, websites, call centres, Police & Court time.
Or you could spend £65 billion on dualling those single carriageway A roads to left behind parts of the country. Plus electrifying more rail routes, or upgrading commuter rail for double decker carriages (There was a Woking to Waterloo double decker proposal, a few years ago).
Probably simpler to start charging electric vehicles a flat rate road tax.
To be honest unless the government put it writing that the money from this was to go back into improving the infrastructure then no, it’ll just mean they’Ll be using the motorists to generate more money fir the treasury to waste on other pointless projects. I’ve driven all over Europe and in other countries and where they have toll roads most have been done in partnership with the govt of that country and are well maintained and the cost is low especially when compared to the price of using the M6 toll.
Guys, honestly speaking, I have no idea where a person who earns £75 per day and travels 15 miles to work there and back can afford to even work!! If the fee is £1.5 per mile, he will need to pay £45 back every day. How on Earth that person can pay bills then and feed his family? It’s a simple math!! Not everyone is earning £2-3k per month…
We already have road tax, fuel tax, congestion charge and all the council’s are clamouring to charge us air pollution charges for using presumably their air, not satisfied with charging us exorbitantly for daring to park anywhere. How long before someone decides to charge us for breathing.
I can just see them giving some foreign owned private company the right to charge us for using the roads we have already paid for time and again. Soon it will not be worth leaving the house. This used to be a free country, not anymore.
Makes sense, I would apply a charge based on mileage taken with the annual MOT and apply a multiplier based on the vehicles emissions rating. This can then apply to all cars immediately and as the zero emissions cars on our roads increase, the cost per mile can be adjusted to account for any loss in revenue.
Wonderful idea let us ensure that we are not paying twice as we are today.
Either road pricing or road tax not both.
As someone who travels a round trip of nearly 70miles a day, who three years ago committed to an electric car at significant more expense than was the outgoing on the car being driven because I wanted to make a difference (sorry, but in many ways electric cars are more, if not significantly more expensive to run for the ‘regular Joe’) I feel I would be unduly penalised with these measures. It could be 9 years away and then I could see. But there is not the option to keep my current electric car going for that long so again I would be having to spend a huge chunk of my wages on a car. The only way this could be seemed as reasonable is of the cars themselves are made massively cheaper. I would go so far as to say by at least 10k for a car that can do at least 350 miles on a charge. How will that work? Still, if it £1.50 per mile I would be spending £1000 month to drive to work! Happy to contribute to the roads, but that, surely is excessive? I could also talk about public transport, but that is another story!
This should be a optional choice where the person paying for the tax can then decide which option would suit their own personal circumstances .
Road tax should be by vehicle weight, this determines damage to roads.
Fuel duty already covers distance driven and fuel efficiency.
So they wold like us to pay by mile. yet we all will have to pay to charge them so its a no brainer
Let’s be clear, all monies raised from motoring is TAX, pure and simple. It does not feed back to motoring.
I believe it was Gordon Brown who broke the link between road tax and roads, when he essentially said: “it’s my money and I’ll spend it on what I want”.
Motorists are cash cows.
How would the cost work for pay per mile.
This will effect the haulage industry and put companies out of buisness.
Why not tax the use of electric cars, they must wear the road surface out the same as any vehicle does, that would be fairer than fossil fuel users footing the bill while electric drivers drive for free. That would be fair.
An obvious stealth tax. The Gov would be unable to resist the temptation to triple tax those unable to make the switch, pay per mile, road tax, and fuel tax on petrol/derv, sorry that’s quadruple tax as we pay VAT on fuel duty. Even if the Gov say they won’t can we trust them? They encouraged us to switch to diesel, then said sorry diesel is bad so you need to pay more tax. Then they said no more new petrol/ diesel after 2040, then they suggested this may be 2035, or 2032 but now 2030. Oh and no more hybrid which they have also encouraged us to buy after 2035. NO they can’t be trusted one bit.
Just tax every car at the same basic rate irespective of fuel type
I had to put no because you included from 2030 and I think the incentive to switch to electric still needs to be there longer but at the tipping point where there are more eV than ice in future yes definitely
Until Bozo or some other government clown ‘fixes’ the UKs failing electricity infrastructure, all this talk of mass take up of EVs is just more hot air and blatant lies aimed at the gullible green lobby.
The generating infrastructure, now, today, is running constantly on the edge of breakdown relying on a ‘wing and a prayer’ to keep our supplies going. How can it ever cope with extra tens of millions of EVs charging every day ?
I agree with many on here, put it on the cost of fuel, more you do more you pay, some rep doing 50000 miles a year and paying £30 a year road tax is not comparable to granny nipping to shops once a week in her Micra and paying £200 a year.
Re this claim of “£40bn lost revenue”, apparently it comes from a Guardian (!) mention of a paper suggested that widespread adoption of electric cars could cost the Government £27.5bn annually in lost fuel duty, plus VAT on fuel currently raising £7.1bn annually, and vehicle excise duty raising £5.7bn a year.
Fact is that Electric cars need huge subsidies to get them sold, which is why they have been let off the current taxation regime for private vehicles.
The ” £40bn shortfall” is a journalistic myth. In any case a 100% electric car parc is not going to reached for 40 years.
While paying per mile seems like the logical choice (it always has), thought should be given about the effect on the uptake of electric cars.
One of the justifications of high initial cost of electric cars is the reduction in running costs compared with petrol/diesel fuel (assuming you charge at your house that is). Start charging per mile and that disappears. Electric cars will be back to being unaffordable
I agree, as road tax and fuel duty is a regressive tax, in the sense that it doesn’t reflect ability to pay. Collecting the same amount of tax through income tax is therefore fairer, and also roads are essential infrastructure and everyone ultimately benefits from them being kept in good order.
fuel tariffs are not fair, it should be based on the cost to the country and this is not to do with carbon, that is penalising us against the rest of the world. It should be on damage to the road, thus HGVs should pay most, then vans depending on weight carrying capacity as these are destroying smaller road surfaces at an alarming rate, then electric vehicles should pay more as they weigh far more, thus cause more damage. Diesel and Petrol cars less and motorcycles nothiing to very little. Why? they cause little to NO damage to the carriageway, they cause NO traffic jams and they are the ideal single person transport. It is not petrol fumes that cause the damage to air quality, it is the small rubber particles ripped off tyres and the the resin squezed out of tarmac by weight nthat bare the biggest polluters. I pay more tax for my lean burn motorcycle than I do for my car, but the car manufacturers have a much greater political pull and the HGV companies will cry foul if they are taxed the amount they should be.
Most of the ideas above seem too complex to me. The UK should pride itself on lower rates of bureaucracy and try to eliminate complexity.
Vehicle Excise Duty is wrong. The granny shopping in her Micra (above) illustrates that.
Keep fuel duty. There will be plenty of legacy vehicles for some while yet and most people see a fuel tax as fair.
As for electric and hydrogen powered vehicles, how about checking their mileage at MOT time and charging per mile and scaling it for weight of vehicle (that’s maximum gross weight not empty or dry weight).
Someone above mentions that if that were done he would disconnect his odometer, but since most are electronic these days wouldn’t it be possible for manufacturers to seal them in some way, so if they were tampered with it would show?
Anyway, this is potentially very complex. We need to make it fair and that won’t be easy. All I say is, try to keep it simple too. The Brits are good at this if the right voices are heard. Keep listening.
The extra revenue would have to be made up elsewhere.
Charging per mile may sound fair but it won’t be easy to set up – don’t think about what electronics cars will have in 2030, think about how it could work with cars built in 2010 – they will still be on the road.
Some form of Extended Road Tax based on a percentage of the retail cost of the car could work.
Wouldn’t be perfect be could avoid complexity.
One thing is for sure – whatever method is chosen it will not be popular.
What about horses?
A fair way would be to tax the power that supplies the vehicles, If governments hadn’t been so quick to sell off our nationalised power generating industries the profits from them could make up the shortfall.
What about vehicles that don’t run on electricity ie LPG or Hydrogen I’m sure they will still be paying tax on fuel so will they have to pay mileage as well? Whatever happens the motorist is going to get stuffed as usual.
No ‘maybe’ option to vote, but agree PAYG, where a ‘meter’ measures consumption to user, is a simple & familiar model. Could be odometer or electric meter, combination of both, or other\new dependant upon vehicle energy source\power train.
However Transport tax burden & revenue, being political rather than just scientific, leaves Government (electorate) to influence which meter\s used & their tax rates. Also taxation at transport sector level disregards energy\power source used – ICE v Hybrid v EV\battery v H v etc.
Hopefully the transport taxes would also be directly dependant upon energy cost & motive power efficiency with their associated capital costs plus their holistic environmental effect to drive maximum efficiency & lowest environmental impact.
As now any shortfall in transport sector tax revenue will simply see adjustment of the transport metered tax rate\s by the Government of the day, as has been the case with diesel fuel pricing. Similarly surpluses will be used by the exchequer for whatever is on their priority list, not just transport.
This is a poll tax on wheels. In regard to the idea that a sales rep.doing 50 thousand miles a year his company would recover their costs by increasing their prices. Multiply this by the thousands of reps and inflation will go through the roof. The tourism attractions would go bust, holiday destinations would go broke, the government would never be elected again. Stop paying billions supporting illegal migrants, curtail foreign aid, make big companies pay their proper taxes. There are thousands of ways to stop corruption. The most stupid idea so far from this government.
well, if per 1 litre of petrol is 58p tax, then that means i’m already taxed approx. 6p a mile .
If road pricing costs me 6p a mile off peak, and perhaps 12p a mile peak, i can live with that.. but this should not be put on top of the fuel i already pay-unless they remove the tax element.. and they should not include VAT in road pricing- as you would already pay this on the electricity coming from your house to charge an EV. so, leave petrol/diesel cars as is, and put the road pricing on EV’s. fitting telematics to old cars will be a nightmare anyhow… and i suspect they would need to be fitted as an intergral part of future cars by the manafacturers- to make them tamper proof..
So the papers have been reporting that 1 in 3 drivers could not afford an electric car. So that’s the working poor taken off the road. Don’t moan that you can’t get a tradesperson to turn up after 2030.
Also 11 year olds are having to dig in awful conditions, for 50 p an hour, in the Congo for the cobalt electric cars need.
Of course, if we had replaceable batteries that would sort not just this problem (they could have a “fuel duty” equivalent), but also the range issue and keep open all those service stations, many of which double as small shops in smaller communities.
Obviously, it’s no great challenge to come up with a proportional charging scheme for EVs.
However, I imagine the amount of revenue lost through ‘fuel duty’ is dwarfed by the amount of revenue that would be lost from taxation on the oil industry and fuel producers ? That is, if you believe the hype that suggests they will no longer be needed. Is the government going to try and recoup all oil related lost revenue from the end user/motorist ?
The bottom line is that EV users are going to be in for a shock, they will soon be paying exactly the same, or more, than current ICE users for transport. just as renewables have not lowered domestic utilities costs, EVs will not lower driving costs.
How many landfill sites are going to be needed to take all of these batteries? They don’t last forever and most are not recyclable and are toxic to the world. When they catch fire they burn vociferously. Is it just battery manufacturers that think this is a good idea and have sold it to idiot in government?
I am a fan of this idea ^^ like Chris is saying, it is your own choice to purchase more gasoline for your car, so the tax is totally avoidable and is more a luxury tax than anything else. It think that would be the best and easiest option to regulate.
Engineering as we know it could not survive without the cobalt in most cutting tools. Perhaps the world should take on child labour as the problem in many 3rd world industries and not single out battery production.
I agree with it sadly.
Pricing should be relative to traffic density and peak travel times too. Rural travel cheaper than city centre travel where there is public transport available or walking is an option. Want to sit on the M5 on a Friday evening in your VW transporter causing travel issues for the locals – make it more expensive than if you travel on a Wednesday afternoon.
I don’t like the idea of GPS tracking, but the reality of it is that if you have a mobile phone you are being tracked already. And as someone who has issues with people speeding (grossly) outside their house there are positives to it..
The biggest issue I can see is that small efficient cars will be paying the same per mile as a car using a lot more power…. With ICE the bigger the car you have the more fuel you consume and the more tax you pay.
I agree with this entirely, fuel duty does raise revenue proportional to fuel used and miles travelled, also I think the leap to electric is misguided, hydrogen fuel cell is the real future not battery ‘noddy’ cars. As well as this there are many more years of development in the ICE yet and older cars could be given longer life and greener credentials by re introducing lpg conversions again. Road pricing will not effect the likes of them who impose it upon us a feww thousand a year to a millionaire is chicken feed, while the lower levels of society will suffer yet again
Churchill got rid of road tax over half a centuary ago and every taxpayer regardless of whether they are a motorist or not pays for the roads. The lost tax revenue from motorists switching from fossil fuel to electric vehicles could be partially offset by removing £10.5B subsidies to the fossil fuel companies and increases in VED for electric vehicles based on how much damage they do to roads, i.e. the weight or value of the vehicle. EV’s that cost over £40k already pay VED and EV’s below £40k already have VED but charged at zero so this would be the easiest method to recoup any loss without heavy investment in technology required for road charging.