Nearly half of people support replacing fuel duty and vehicle excise duty (VED) with a pay-as-you-drive scheme, a new survey has suggested. The poll of more than 3,000 UK adults for pressure group Campaign for Better Transport (CBT) indicated that 49% of people are in favour of charging drivers based on how they use vehicles.
A majority of respondents (60%) said they believe vehicle taxation needs reforming. A pay-as-you-drive scheme – also known as road pricing – would charge drivers based on their mileage.
It could factor in the type of vehicle and whether it was used during busy or quiet periods. CBT called on the Government to establish a cross-party commission before the next general election to secure agreement on the case for reform, in an attempt to have a new scheme ready by 2025.
The group’s chief executive Paul Tuohy said: “The need to reform vehicle taxation is becoming increasingly clear as we rightly move away from petrol and diesel vehicles in order to tackle climate change. What this research shows is that road pricing, far from being an unacceptable concept to the public, is in fact one that the majority of people believe can be implemented fairly and could in fact save most drivers money.”
The investigation, which also included four focus groups, found many people believe a “well-designed” pay-as-you-drive system would be “a fairer and more transparent way to tax motoring”, according to CBT. Motoring research charity the RAC Foundation published a report earlier this year which stated the Treasury could lose almost a third of the revenue raised by car-related fuel duty in nine years because of the shift to green motoring.
The collapse in the sale of new diesel cars in favour of electric models could cause annual fuel duty income from cars to drop from £16.4 billion in 2019 to £11.4 billion in 2028, according to the analysis. RAC Foundation director Steve Gooding said: “Whilst Chancellor (Kwasi) Kwarteng has a lot on his plate stemming from last week’s announcement, there will undoubtedly be someone in the Treasury team quietly exploring the options for plugging that gap from pay-as-you-go driving, but with recent hikes to electricity prices, finding a way through that doesn’t confound the push to get us into electric cars looks incredibly hard.
“No-one should underestimate the practical and political challenges of substituting fuel duty with a pay-per-mile tax. Maybe the Treasury needs to see the income foregone not so much as a loss but as the price worth paying in order to achieve the carbon reductions we need to achieve from road transport.”
Fuel duty was cut by 5p per litre of petrol and diesel in March amid record pump prices, bringing it down to 52.95p. VED is a tax levied on every vehicle on UK roads.
The first-year rate for new vehicles varies according to their carbon emissions, from zero for the cleanest models to as much as £2,000 for the most polluting. A flat rate of £140 applies for subsequent years, except for zero-emission vehicles which continue to have no charge.
AA president Edmund King previously devised a Road Miles concept which would require drivers to buy extra miles once they have used an initial free annual allocation. He said: “The Treasury will want to reform motoring taxation as the transition to electric vehicles will cost them billions in the longer term.
“A balance must be struck between encouraging the uptake of zero emission vehicles against a background of increased electric vehicle running costs and ensuring fairness for all drivers.”
