The RAC has called a suggestion that the chancellor is set to put forward proposals towards a system of road pricing a potential ‘landmark moment’ in the way drivers are taxed.
Ahead of Thursday’s Autumn Statement, Meera Vadher, a special adviser to Grant Shapps when he was transport secretary, tweeted: Tomorrow [Jeremy Hunt] is expected to launch proposals on road pricing - a new form of taxation which will overhaul fuel duty and VED. Long awaited it takes a brave govt to propose wholesale change to the way we pay for driving.’
In a subsequent tweet, she added: ‘Worth saying we have been here before! Road pricing will be a massive change and the first step to closing the revenue gap may be to introduce road tax for EVs which could come into place sooner than any road pricing proposals. [At the moment] EVs are exempt from the £165pa rate.’
Perhaps he has been reading 'Road Miles'....https://t.co/r6TXkohOn1
— Edmund King OBE (@AAPresident) November 16, 2022
The RAC’s head of roads policy, Nicholas Lyes, said: ‘The fact the Chancellor is giving serious thought to how drivers pay for road use in the future is potentially a landmark moment in how drivers are taxed. As more electric vehicles come on to our roads, revenue from fuel duty and vehicle excise duty will decline, so it’s inevitable a new system will have to be developed.
‘Our research suggests drivers broadly support the principle of ‘the more you drive, the more tax you should pay’, with more than a third (36%) saying a ‘pay per mile’ system would be fairer than the current regime – although three-quarters (75%) are concerned the Government might use such a system as a way of increasing the amount they are taxed.’
Mr Lyes added: ‘Whatever any new taxation system looks like, the most important thing is that it’s simple, transparent and fair to drivers of both conventional and electric vehicles.
‘It’s also essential that a new system replaces rather than runs alongside existing taxation regime. Ministers should additionally consider ringfencing a sizeable proportion of revenues raised from a new scheme for reinvestment into our road and transport network.’
