- Britain is a nation of drivers, with 88% of the miles travelled in 2021 being via car, van, or taxi. But current policy is letting drivers down.
- Road transport in Britain generates too much congestion and air pollution. Motoring has also been treated as a cash cow, with drivers paying far more through taxation than is invested back in the road network.
- A new report from the Centre for Policy Studies, which draws on extensive polling and focus group work, argues that we need a smarter approach to motoring taxation.
- It argues that fuel duty and vehicle excise duty should be replaced with a per-mile charging system, with higher mileage allowances for those living in rural areas to ensure fairness. This should initially apply only to electric vehicles, which would still pay less than their petrol or diesel counterparts.
- The report also shows that there is strong public backing for clean air zones to tackle air pollution, including among 2019 Conservative voters. However, focus groups made clear that local governments need to work harder to bring the public on board and avoid the perception that such measures are simply about raising money.
In 2021/22, drivers paid £33bn in fuel duty and vehicle excise duty. But the Government spent only £5.4bn on national roads and £6.4bn on local roads in the same period. This system is not fair for drivers or the general public, who suffer the consequences of polluting vehicles through negative health outcomes.
‘The Future of Driving’, co-authored by CPS Energy and Environment Researcher Dillon Smith and CPS Research Director Tom Clougherty, makes a series of vital recommendations to redress the balance.
The report suggests introducing a ‘pay as you drive’ scheme for Zero Emission Vehicles (ZEVs), becoming the only form of motoring taxation for those vehicles. ZEVs would be charged a flat rate for every mile they drive – but still pay significantly less than their petrol and diesel counterparts. While everyone would receive a set allocation of tax-free miles every year, the allocation would be higher for those living in remote areas with fewer transport alternatives.
Eventually, as the share of ZEVs on the roads grows, this new per mile charging system could completely replace fuel duty and vehicle excise duty for all vehicles – exchanging an outdated and onerous tax system with something ‘future-proof’ and much fairer towards drivers.
The report, supported by the Clean Air Fund, also shows that voters remain concerned about air quality and congestion, with significant numbers believing that government has not done enough to tackle either. Polling by BMG Research for the CPS shows strong support for action on both, including among 2019 Conservative voters.
However, the focus groups also made clear that local policymakers need to work harder to convince voters that these are targeted measures to improve air quality and congestion rather than purely a revenue raiser. The report recommends improved communication strategies and hypothecation as ways to achieve this. Just as drivers would like to see money from road taxes spent on improving the roads, they also back money from clean air zones being used to improve transport or to help people upgrade to cleaner vehicles.
Dillon Smith, CPS Energy and Environment Researcher and report co-author, said:
‘Driving is a fundamental part of life for millions of people up and down the country. Our recommendations take into account public feeling on a variety of proposals, privacy concerns, and their financial impact, and deliver a solution which can lead to fairer, better, and more efficient taxation while tackling congestion and improving air quality in our big cities.’
Tom Clougherty, CPS Research Director and co-author, said:
‘The Treasury has grown used to motorists being a cash cow, but with electric vehicles on the rise, those days are numbered. We shouldn’t replicate the old, punitive tax system, but it is still important that all drivers pay a fair amount for the roads they use. The ‘pay as you drive’ approach our report recommends would meet that objective and could be phased in gradually over the next decade or so – alongside targeted, local initiatives to manage congestion and reduce air pollution.’
NOTES TO EDITORS
- ‘The Future of Driving’ is available to download here.
- Dillon Smith is the Energy and Environment Researcher at the Centre for Policy Studies and Tom Clougherty is the CPS Research Director and Head of Tax.
- For further information, please contact Emma Revell on 07931 698246 or [email protected].
- ‘The Future of Driving’ was supported by the Clean Air Fund.
- BMG Research interviewed a representative sample of 2,122 GB adults online between 30th November and 5th December 2022. To allow for more confident estimates for this group, the sample included a boost of those who voted Conservative in 2019. Data are weighted including adjustments for the 2019 Conservative boost to ensure the total sample is representative.BMG conducted five focus groups with drivers living in the UK. The groups were recruited to ensure a broad cross section of the public across several demographic criteria. Three groups were conducted online and two were delivered in-person.BMG are members of the British Polling Council and abide by their rules.
- The Centre for Policy Studies is one of the oldest and most influential think tanks in Westminster. With a focus on taxation, economic growth, business, welfare, education, housing and green growth, its goal is to develop policies that widen enterprise, ownership and opportunity.
Date Added: Wednesday 24th May 2023