William Eichler 16 May 2022

Road-pricing system fairer than fuel tax

Road-pricing system fairer than fuel tax image
Image: Jarek Kilian / Shutterstock.com.

Charging motorists a levy based on the miles they drive would be fairer than taxing fuel and could even help address the cost of living crisis, think tank says.

In a new report, the Social Market Foundation (SMF) said that a new road-pricing system is urgently needed to make transport policy fairer and more fiscally sustainable.

The think tank argues that fuel duty falls disproportionately on lower-income drivers. It also says that the growth in electric vehicles, which do not incur fuel duty, will eventually leave the Treasury with a £30bn gap in tax revenue.

To avert that shortfall, the SMF is urging ministers to replace the fuel duty with a national road pricing regime with a fixed per mile charge.

The scheme could be ‘revenue neutral’ meaning it raises the same sums as fuel duty, according to SMF, but it would distribute the cost in a fairer way.

The report also makes the case for including a free ‘mileage allowance’ akin to the tax allowance, meaning low-use drivers would not pay any charge and high-mileage drivers would make a contribution proportionate to their use of the roads.

Scott Corfe, SMF research director, said: ‘The current system of fuel duty is unfair, unpopular and unsustainable. A properly designed road-pricing regime will be fair, popular and good for the public finances and the environment. Voters know this, and privately so do the politicians. All that’s needed is the political courage to accept that road pricing is inevitable and sensible.

‘The costs of driving are a factor in the cost-of-living crisis hitting many households, and fuel duty hits low-income people hardest. Road-pricing would be a progressive alternative, taking some of that burden away from those least able to pay it.’

Skate parks are not the only fruit image

Skate parks are not the only fruit

On Go Skateboarding Day, Susannah Walker asks councils and their leisure and park departments to think differently about what facilities they provide for teenagers.
SIGN UP
For your free daily news bulletin
Highways jobs

Travel Information Data Technician

Essex County Council
Up to £25581 per annum
This is an exciting opportunity to work across all aspects of the Integrated Passenger Transport Unit (IPTU). Working with a passionate and dedicated England, Essex, Chelmsford
Recuriter: Essex County Council

Planning Strategy & Implementation Manager

Essex County Council
£57621 - £61410 per annum
Planning Strategy & Implementation Manager Permanent, Full Time £57,621 to £61,410 per annum Location
Recuriter: Essex County Council

Senior Accountant

Telford & Wrekin Council
£39,571 - £42,614
Are you a qualified Accountant looking to take the next step in your career? Telford, Shropshire
Recuriter: Telford & Wrekin Council

Family Assessment Worker

Telford & Wrekin Council
£25,419 to £27,514
We have a great opportunity for a full time Family Assessment Worker in the Parenting Assessment Team. Telford, Shropshire
Recuriter: Telford & Wrekin Council

Neighbourhood Enforcement Officer

Telford & Wrekin Council
£23,023 - £24,920
The post holder will tackle environmental crimes and unlawful parking. Telford, Shropshire
Recuriter: Telford & Wrekin Council

Partner Content

Circular highways is a necessity not an aspiration – and it’s within our grasp

Shell is helping power the journey towards a circular paving industry with Shell Bitumen LT R, a new product for roads that uses plastics destined for landfill as part of the additives to make the bitumen.

Support from Effective Energy Group for Local Authorities to Deliver £430m Sustainable Warmth Funded Energy Efficiency Projects

Effective Energy Group is now offering its support to the 40 Local Authorities who have received a share of the £430m to deliver their projects on the ground by surveying properties and installing measures.

Pay.UK – the next step in Bacs’ evolution

Dougie Belmore explains how one of the main interfaces between you and Bacs is about to change.