Rishi Sunak’s latest bright idea, the road pricing scheme, is rumoured to be on the way after fuel tax revenues fell due to people’s gradual move to electric cars.
People will be charged per mile they drive. As well as bringing in revenue for the Government, it aims to reduce the number of people driving or encourage them to switch to electric cars. The proposal is illogical, London-centric and does not solve the problems the Government claims to be concerned about.
The further you travel in a car without stopping, the lower your average emissions are. So according to the bafflingly illogical system, the longer you remain on the go, the less you ought to pay. For example, stopping three times per mile and getting back up to 30mph each time triples emissions, compared to just cruising at 30mph.
Road pricing would encourage people to take shorter journeys, rather than encouraging people to use a different form of transport for shorter journeys, where emission per mile travelled is far greater. We should instead be encouraging the long motorway journeys if people are needing to drive and looking at more viable options for short journeys.
Electric cars are more eco-friendly for shorter journeys, but this is not the case for long journeys. This new tax would be unlikely to encourage people to switch to an electric car, which is the Government’s aim for 2030. The road pricing scheme would also reduce income from fuel duty as there would be fewer cars using fuel on the roads. This loss may not even be fully covered by the gains from the road pricing scheme.
Secondly, the pricing scheme is London-centric. In London, it is entirely possible and far more practical not to use a car to get around, due to both easy and accessible transport links. However, for those who live even an hour out of London, the transport links are nowhere near up to the standard needed to be able to rely only on public transport. Even if there are good train links, these tend to just go into London and do not connect people on the outskirts. The bus routes that can connect people are too unreliable to depend on.
This issue is even more pertinent for those who live in very rural surroundings. These rural areas are also some of the poorest areas in the UK and would be impacted most by the regressive nature of this tax, especially as they would have no option but to pay for it if they want to continue driving to work. It would also negatively impact businesses that are situated in rural locations, as it would create a greater barrier to consumers since the consumer would be taking on the cost of the new tax twice – in both the cost of goods as well as the cost of accessing them.
Finally, road pricing ignores the relevant issues. Its aim is primarily to raise more tax. But, we ought to be focusing on road congestion if we are to make any real dent in our carbon emissions. Road congestion creates both economic and environmental problems, costing the UK economy nearly £7 billion in 2019. If road congestion was addressed, then the Government would have a contribution to the loss in tax from fuel duty, which brings in around £28 billion per annum.
The road pricing scheme might well reduce the number of vehicles on the road since it will price many of those on lower incomes from using roads through a regressive tax. A real solution might involve removing the freeze on fuel duty for non-commercial vehicles to raise their tax revenues, which could then be invested back into methods of reducing consumption.