Vehicle taxation reform urged

Campaign for Better Transport has written to the Chancellor, urging her to reform vehicle taxation or face a massive revenue gap. With the UK transitioning away from petrol and diesel vehicles towards zero-emission vehicles, the letter warns, revenue from fuel duty will decline by an estimated £5 billion a year by 2033.

Silviya Barrett of Campaign for Better Transport said: “The new Chancellor faces a looming black hole. She can avoid it, in a way which is fair, and which garners broad public support. But she should start now, as this issue will only get more pressing.”

The easiest immediate solution, the letter says, would be a simple charge levied on zero emission vehicles (ZEVs) on a per-mile basis. Having an adequate transition period would enable industry to prepare. And exempting existing ZEV drivers would incentivise uptake before the implementation date.

“It should be cheaper to drive a zero-emission vehicle than a more polluting vehicle, but it’s only fair that these drivers should pay a share” – Silviya Barrett of Campaign for Better Transport

“It should be cheaper to drive a zero-emission vehicle than a more polluting vehicle, but it’s only fair that these drivers should pay a share, and a pay-as-you-drive model can achieve this,” Ms Barrett said.

Research by Campaign for Better Transport showed that 65% of the public believe it is fair for ZEV drivers to be taxed but at a lower rate than petrol and diesel drivers versus only 19% who disagree.

Campaign for Better Transport leads a Pay-as-you-drive Forum, which comprises 37 organisations including transport industry and sector bodies, NGOs and think tanks. While different members of the Forum have slightly different perspectives, all would support a Treasury move on vehicle taxation, believing it is important that ZEV drivers should fairly contribute.

“Bus and coach operators recognise that for the UK to meet its net zero carbon targets many more people must be persuaded to use public transport more often” – Alison Edwards, Director of Policy and External Relations at forum member the Confederation of Passenger Transport

Alison Edwards, Director of Policy and External Relations at forum member the Confederation of Passenger Transport, said: “Bus and coach operators recognise that for the UK to meet its net zero carbon targets many more people must be persuaded to use public transport more often. The introduction of pay-as-you-go vehicle taxation could support this shift by balancing pricing between modes. This would help curb congestion – something that will in turn make buses and coaches quicker, more reliable and so more attractive.”