JULY 27, 2021tags: Electric Cars

By Paul Homewood 

I want to return to yesterday’s story about road pricing:

Road pricing – charging drivers for their “use of roads” –  is a glib concept. After all, why should not people pay for what they use?

But how much should they pay?

Currently Fuel Duties and Vehicle Excise Duty bring in £34.2bn a year for the Exchequer. Yet state spending on roads, both capital and operational, is only about £11bn. In other words, VED alone covers most of the cost of roads.

In short, fuel duties are simply a form of general taxation, and nothing to do with funding roads. Any system of charging for the use of roads should therefore reflect the actual costs, whilst at the same time VED and fuel duties should be totally scrapped.

As this clearly is not the intention of the new levy suggested by Roger Bootle, we must assume that the levy is simply another form of general taxation, and a highly regressive one at that.

Unlike fuel duties, which cost owners of big, gas guzzlers more than owners of small cars, everybody will pay the same amount of tax if they do the same mileage on the same roads. Based on RAC estimates, private cars account for £16.4bn of fuel duty, £517 per car. Average annual mileage is said to be 7400, which implies an average of 37.7mpg.

Therefore, a driver who averages, say, 50 mpg will find himself £126 a year worse off. If he does more than 7400 miles a year, that figure will rise correspondingly.

In any event, it seems inevitable that the revenue from the new levy will be much higher than from fuel duties, once administration costs are added in. There are also suggestions that road charging should also contain an element of congestion charging (something which the voters of Manchester rejected by a large majority a few years ago).

Then there is the stated aim of government and CCC that we must use our cars much less. It is highly likely we will see road charging set at punitive levels to “encourage” us on to buses and bikes.

One way or the other, the motorist will be fleeced.



July 27, 2021