Rishi Sunak 'considers plan to charge motorists per mile they drive'

Rishi Sunak 'considers plan to charge motorists per mile they drive'

11/16/2020

Rishi Sunak considers plan to charge motorists for every mile they drive on Britain’s roads to fill £40billion tax hole left by the switch to electric cars

  • The Chancellor is reportedly ‘very interested’ in the idea of national road pricing
  • Scheme was dropped by Labour in 2007 due to uproar over £1.50 a mile charge
  • Currently road charges limited to areas such as M6 Toll and Dartford Crossing 

Rishi Sunak is considering plans to charge motorists for every mile they drive on Britain’s roads to fill a £40billion tax hole left by a push to electric cars, according to reports.

The Chancellor is reportedly ‘very interested’ in the idea of a national road pricing scheme – which would steer motorists into a new ‘pay-as-you-drive’ type system. 

A similar type of scheme, involving the use of satellite tracked tags or roadside beacons, was dramatically shelved by Labour in 2007 amid uproar that drivers could be charged up to £1.50 a mile.

Charges to use certain stretches of roads in England are largely limited to the M6 Toll in the Midlands and the Dartford crossing on the M25, while London has its Congestion Zone.

But, according to the Times, fears have been raised of a £40billion tax shortfall due to the switch to electric cars – because it would erase major revenue raisers such as Fuel Duty and Vehicle Excise Duty. 

It comes amid reports Boris Johnson wants to accelerate his green plans – including bringing forward  a ban on the sale of petrol and diesel cars to 2030.

Rishi Sunak is considering plans to charge motorists for every mile they drive on Britain’s roads to fill a £40billion tax hole left by a push to electric cars, according to reports

Charges to use certain stretches of roads in England are largely limited to the M6 Toll (pictured) in the Midlands and the Dartford crossing on the M25, while London has its Congestion Zone

A similar type of scheme, involving the use of satellite tracked tags or roadside beacons, was dramatically shelved by Labour in 2007 amid uproar that drivers could be charged up to £1.50 a mile. Pictured: A sign for the M6 Toll in the midlands

What is a road pricing scheme and how does it work? 

Road pricing schemes are direct charges levied for the use of a road. 

They include tolls roads, distance and time based charges and congestion charges.

Road pricing schemes aren’t typical in England, with the three major schemes being the M6 Toll in the Midlands, the Dartford Crossing on the M25 and the Congestion Zone in London.

There are other minor schemes such as the Itchen Bridge in Southampton and the Humber Bridge in Hull.

The idea first came to prominence in the UK in the 1964 Smeed Report – a study into alternative methods of charging for road use.

But the report largely focused on using such schemes as a way of driving traffic congestion down in urban areas. 

Plans for a ‘national’ scheme came to prominence again in 2004, when the then Transport Secretary, Alistair Darling, announced plans for a national road pricing scheme.

Under the plans, which involved letting local areas set up ‘pay-as-you-go’ networks, drivers would have paid to install a black box in their cars so they could be monitored by electronic tracking via satellite or roadside beacons.

Motorists would then pay between 2p and £1.50 a mile depending on the time of day and levels of congestion.

But the scheme was dropped in 2007 after an online petition was signed by 1.8million people.

The Department of Transport at the time said it was ‘rubbish’ to suggest the Government had ever planned a national road pricing scheme, insisting it had only put in place plans for local tolls. 

In 2009, The Climate Change Committee, led by former CBI chief Lord Turner, said it wanted ministers to introduce compulsory road pricing to prevent global warming. 

But that could mean an end to tax incoming, such as VAT on fuel – which currently raises around £5.7billion-a-year

It could also mean an end to Fuel Duty, currently charged at 57.95p a litre on petrol and diesel vehicles, and which is on course to raise £27.5billion this financial year. 

Meanwhile, Vehicle excise duty (VED) – which is charged on the purchase of cars based on their emission levels – is expected to raise £7.1million.  

A government source reportedly told the Times that the Treasury had drawn up an analysis outlining potential options for a national road pricing scheme.

However the source said such a scheme was not ‘imminent’.

A similar plan was shelved by Labour ministers in 2007 amid fears drivers would be billed up to £1.50 a mile.

A petition was signed by 1.8million motorists opposing the idea.

But the Department for Transport at the time said it was ‘rubbish’ to suggest the Government had ever planned a national road pricing scheme, insisting it had only put in place plans for local tolls. 

Under the plans, which involved letting local areas set up ‘pay-as-you-go’ networks, drivers would have paid to install a black box in their cars so they could be monitored by electronic tracking via satellite or roadside beacons. 

They would then be charged between 2p and £1.50 per mile depending on the time of day and levels of congestion. in a move that was slammed as ‘stealth tax’ by campaigners.

Such a scheme appeared again two years later when The Climate Change Committee, led by former CBI chief Lord Turner, said it wanted ministers to introduce compulsory road pricing to prevent global warming. 

Speaking at the time, Edmund King, president of the AA, said such a move would be ‘political suicide for any party’.

A Treasury source told the Times: ‘The Treasury regularly explores lots of different policy options. This is no different.’    

It comes as it was revealed a crackdown on petrol and diesel cars could come earlier than expected after Boris Johnson stepped up calls for action on climate change earlier this week.

The Prime Minister said there is ‘no time to waste’ and called on world leaders to put forward ambitious commitments to tackle the crisis.

It comes as it was revealed a crackdown on petrol and diesel cars could come earlier than expected after Boris Johnson stepped up calls for action on climate change earlier this week

The sale of electric vehicles in the UK have rocketed by nearly 170 per cent in the UK this year (file photo)

There is a growing expectation that he may announce the Government’s planned ban on the sale of new petrol and diesel cars will be brought forward from 2040.

Mr Johnson has already said he would like this to happen by 2035 but insiders believe he will pledge to bring forward the deadline to 2030.

Car firms are already preparing for the changes as Department for Transport figures show sales of electric vehicles have rocketed by nearly 170 per cent in the UK this year.

Mr Johnson promised to set out a ten-point action plan in comments marking a year until Britain hosts the UN ‘Cop26’ climate summit.

It is set to outline action in areas such as cutting emissions from transport, electricity and buildings, and using hydrogen and other new technology.

The UK – which has a legal target to cut greenhouse gases to ‘net zero’ by 2050 – is co-hosting a climate action summit for world leaders next month to bring forward more ambitious plans and set net zero targets ahead of next year’s Cop26 meeting.

Young in wealthy urban areas are fuelling decline in car ownership across Britain as they turn to bicycles and electric scooters instead 

Young people have fuelled a decline in car ownership among nearly a third of England’s population, as they turn instead to electric scooters and bicycles, new figures reveal. 

The number of private cars owned by individuals fell in areas that account for 31.5% of the population of England – or 16 million people – according to figures released by the DVLA after a freedom of information request, The Sunday Times reports.

It is a trend seen largely in wealthy urban areas among adults aged 18 and over.

Car ownership among nearly a third of England’s population declined in the last decade

Scott Urban, director of Oxfordshire Liveable Streets, which campaigns for greener transportation, said: ‘These 16 million people are showing the way forward for a society with less pollution, noise and lower carbon emissions.’ 

More than 2.3 million people now live in areas where there is one car per five adults, as opposed to the start of the decade when the same statistic stood at 1.1 million. 

Car ownership was also affected by financial status. Areas with the largest decline in car ownership have an average house price of £325,000, compared with £215,000 in areas where ownership increased.  

London – which commands some of the highest property prices in the country – saw the biggest dip in car ownership.

Environmental campaigners hailed the 16 million people ‘showing the way’ for less pollution

Other areas that saw a decline include Newcastle, Nottingham, Brighton and Hove, Oxford, Birmingham and Exeter. 

By contrast, less affluent areas of Liverpool accounted for nine of the 100 neighbourhoods where car ownership increased most rapidly in the last 10 years.  

Wealthy home counties and more rural areas also saw an upward trend.   

In a district near Camberley, Surrey Heath, there are 99 cars for every 100 adults, a rise of seven per cent n the past decade, while in Woolpit, Mid Suffolk, there is a car for every adult, up 29% in the past decade.

Rise or fall, there are now an estimated 40 million cars on Britain’s roads, a milestone reached in April of this year.

Young people from wealthy urban areas are increasingly turning to bicycles and e-scooters

The figures were revealed just days before Boris Johnson is expected to announce a ban on the sale of new petrol and diesel cars from 2030, five years earlier than previously planned.

Britain had originally planned to ban the sale of new petrol and diesel-powered cars from 2040 as part of efforts to reduce greenhouse gas emissions. 

Earlier this week environmentalists predicted such a move would create more than 30,000 new jobs and provide a £4.2billion boost to the economy.

The Financial Times reported the new timetable was not expected to apply to some hybrid cars which use a mixture of electric and fossil fuel propulsion and could still be sold until 2035.

An end to the sale of new petrol and diesel cars would mark a huge shift in Britain’s automotive market.

Car firms are already preparing for the changes as Department for Transport figures show sales of electric vehicles have rocketed by nearly 170 per cent in the UK this year. 

Mr Johnson has promised to set out a ten-point action plan in comments marking a year until Britain hosts the UN ‘Cop26’ climate summit.

It is set to outline action in areas such as cutting emissions from transport, electricity and buildings, and using hydrogen and other new technology. 

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