A free market think tank has mooted a ‘pay as you drive’ scheme as the only form of motoring taxation for Zero Emission Vehicles (ZEVs).
A new report from the Centre for Policy Studies (CPS) argued that ZEVs should be charged a flat rate per mile, but 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.
The think tank argued that a system that saw drivers pay £33bn in Fuel Duty and vehicle excise duty (VED) in 2021-22, but the Government spend only £5.4bn on national roads and £6.4bn on local roads is ‘not fair for drivers or the general public, who suffer the consequences of polluting vehicles through negative health outcomes’.
It said that as the share of ZEVs on the roads grows, the per mile charging system could completely replace Fuel Duty and VED for all vehicles.
The CPS said its report also shows that voters remain concerned about air quality and congestion, with significant numbers believing that government has not done enough to tackle either.
However, 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.
Silviya Barrett of Campaign for Better Transport said: 'It’s good to see that the Centre for Policy Studies has drawn on our own pay-as-you-drive research to reach the same conclusion that our current system of vehicle taxation is outdated and should be replaced with a per-mile charge.
'It is only fair that drivers pay their share of tax to address the economic costs incurred by motoring pollution and congestion. It is important that proceeds are invested in public transport as well as roads upkeep, to provide good travel options for everyone.'
