The TSC report made it very clear that it was considered key that the funding for our roads continued to be funded directly by those using the infrastructure as it was not considered appropriate that it should be subsidised by non-drivers and other taxes.
The favoured option was a form of road pricing based on miles driven. Initially a decision on road pricing was expected in the Autumn of 2022 but due to the economic challenges and turmoil in the government this was deferred.
Following a lack of response by the Treasury, in December of 2022 the TSC Chair, MP Ian Stewart followed up with Jeremy Hunt to request the government responded to the recommendations.
In response Hunt said, "Motoring is an important part of most people’s lives and how they get around. It’s crucial for how the UK’s businesses transport supplies and products. So these are important issues to consider”.
He added: “As the government’s Net Zero Strategy set out, as we transition to net zero, the government will need to ensure that the tax system encourages the uptake of EVs, and revenue from motoring taxes will need to keep pace with this change while remaining affordable for consumers”.
“This is so we can continue to fund the infrastructure and first-class public services that people across the UK expect and avoid a rise in congestion, with those able to drive electric vehicles having very low running costs compared to other vehicles and public transport. That would affect everyone on the road and those using public transport.”
“As I set out at Autumn Statement 2022, it’s right that all motorists start to pay a fairer tax contribution,” said Hunt. “That’s why, from 2025, electric cars, vans and motorcycles will pay vehicle excise duty in the same way as petrol and diesel vehicles. The government is focused on delivering its core priorities, as set out in the 2019 manifesto. As such, the government does not currently have plans to consider road pricing.”
Further to this, Exchequer Secretary to the Treasury James Cartlidge added: “The overriding focus for the government in recent months has rightly been the immediate challenge of inflation and supporting people with the cost of living.”
In conclusion, the government is set to lose billions as the receipts from fuel duty and vehicle excise duty reduce due to the uptake of EV vehicles. However, the implications of road pricing are wide reaching for businesses as well as individuals and the government appears keen to continue to incentivise those who switch to EV vehicles as part of the Net Zero Strategy, therefore it is clear road pricing is not something that is on the table in the near term.
The next step
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