Government urged to detach road charging from TIF funding

The Transport Select Committee of MPs has backed an extension of fuel duty rather than a form of pay-as-you-go technology, but suggested that voluntary road charging schemes should be encouraged, where Vehicle Excise Duty may be traded for per-mile charges, and a low-cost scheme to charge UK and foreign-registered lorries per mile.

These proposals, they say, could make encourage schemes such as pay-as-you drive insurance, and develop public consensus in favour road user charging.

Congestion

These methods could also be used to tackle congestion, they conclude: “Whilst there is clear evidence that traffic growth was slowing even before the recession, further capacity and stronger demand management measures, such as road pricing, will be needed.”

Today’s report: ‘Taxes and charges of road users’ examined ways the Government could improve the way it communicate the thinking behind such taxes, as well as looking at issues of climate change.

Committee chairman Louise Ellman said: “The Government handled a phased set of increases to Vehicle Excise Duty so badly they tarnished the image of environmental taxes.

“We believe taxation based on car usage through fuel duty remains fairer than any approach based on car ownership and does more to encourage fuel efficiency or reduce CO2 emissions. We recognise that economic factors will limit how much revenue can be raised by this method. We call on the Government to develop other measures to address the problem of congestion.

“Stronger linkage between Treasury policy and Transport Ministry policy is essential if Government is to send clearer signals to UK  motorists about congestion and carbon emissions while encouraging  walking, cycling and greater use of public transport.

“Effective reform will however elude any Government until the public is given explicit and comprehensive information detailing how much money is raised through this route and how it is used,” she said.

Transport Innovation Fund

Manchester recently voted not to adopt a congestion charging system within the M60, despite this decision scuppering a significant improvement to the local Metrolink tram service and lengthening train platforms.

The committee said that TIF money: “should no longer be tied to implementation of road pricing projects, since such schemes have proved unacceptable to many local electorates unwilling to vote for additional charges.”

The RAC foundation has long been a supporter of road user charging to fund road improvements. Its president Professor Stephen Glaister said: “Whilst the solutions might be complex, the problem, as the committee has recognised, is simple. Too many vehicles on too little road space and no clear explanation to drivers of exactly what they get in return for the £45bn or so they contribute to the Exchequer each year.

“We are pleased the committee agrees with us that there should be a shift from taxing car ownership towards charging for road usage. Every other public utility is charged for on the basis of use and there is a strong argument for doing so when it comes to roads. To an extent fuel duty already does this,” he said.

“Whilst local charging schemes are currently meeting with vehement opposition from drivers, in the long run some sort of national road pricing - where pay-as-you-go charges are offset by reductions in vehicle tax and fuel duty - might become unavoidable to eradicate the growing menace of congestion.

The committee rejected the notion of ‘hypothecation’, or dedicated road taxes, as it: “Provides a poor basis for public expenditure decisions and ignores the social costs associated with road use-policing, accidents, pollution and carbon emissions.”

Professor Glaister said: “We support calls for looking at the possible introduction of a voluntary scheme not least because the benefits in reduced congestion will be seen not just by those who sign up, but also those who remain sceptical about such an approach.

“But for any radical policy to be successful public trust in the politicians introducing it is essential - that trust is currently lacking. It might be restored if the Department for Transport had a bigger part to play in setting charges as part of a coherent roads strategy, rather than it being left to the Treasury to tax motorists with the apparent sole intention of shoring up the nation’s ailing finances,” he said.

The Committee did concede that: “there is a case for earmarking revenue from specific local schemes for spending in a given geographical area when such an approach will earn public acceptability and help ensure fairness.”

Charges for lorries

The committee added that; “In the absence of any plans to introduce road pricing for cars, the Committee calls on the Government to resurrect proposals for a low-cost pay-per-mile lorry charge for UK and foreign-registered vehicles. Without some form of toll or vignette system the Committee concludes that UK freight operators will continue to face unfair competition from foreign-registered vehicles able to take advantage of cheaper diesel.”

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