Tony Blair’s think-tank says that a pay-per mile road pricing system should be introduced now. It is also urging the chancellor, to overhaul motoring tax.
Rachel Reeves will likely confirm that the temporary cut of 5p in fuel duty is over and may announce a rise to the tax on petrol and diesel paid at the pump.
The Tony Blair Institute, however, has suggested that Reeves introduce a simple Road Pricing System, which would be 1p per mile for cars, vans and light goods vehicles, and 2.5p-4p for heavy goods vehicles and lorries.
According to a new report by the Institute, the change could generate the same amount of revenue as what the Treasury is expecting to earn from ending the temporary reduction in fuel duties 2022. Acting now may be less toxic politically than waiting.
The Blair government’s 2007 attempt to implement widespread road tolling was met with a huge public backlash. A record number of people also signed a petition to parliament objecting.
The expected shift to electric vehicles and the subsequent reduction in fuel duty that brings about £25bn to the exchequer each year has reignited calls for reform.
The Institute said that introducing a low-level pricing scheme for roads would be “a vital step in reforming UK’s motoring taxation system to accommodate the electric vehicle era, [and] prevent a growth-stifling increase in road congestion”.
The early level of charge is expected to cost an average motorist around £70 per year. This would be payable on the basis of mileage readings taken at the annual MOT test.
The report says that fuel duty will not be abolished, but rather frozen, and then eventually redundant, as cars become zero-emission. By 2050 the price per mile is expected to rise to 10-12p.
The speculation has intensified since Sir John Armitt of the National Infrastructure Commission stated that road pricing is “inevitable”.. has also been urged by groups such as the Campaign for Better Transport to reform and introduce pay-per mile charges for electric cars.
Reeves warned that the country is facing a “black hole” of £22bn in its finances. The Tony Blair Institute urged her as well to change fiscal regulations to allow investment and to overhaul the stamp duty, while raising council taxes on more expensive homes.
A spokesperson for the government said: “We do not plan to introduce road pricing.” “We are committed to supporting the automotive industry as it transitions to electric vehicles to meet our legally-binding climate targets.”
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.