Under a new plan being considered by the government, motorists will pay higher road tax to use motorways. This idea has been put forward as the Treasury faces a shortfall in the budget due to families switching to vehicles that incur less road tax.
The new plan would apply two road tax rates. The lower tier would be for drivers who use small roads, and the higher rate would charge motorists for using motorways and major roads. Spy cameras would be installed to catch any motorists who use trunk roads without paying. Prime Minister David Cameron has said already that private firms may take over the road network in return for a share of the revenue from road tax or pay-as-you-go lanes. However, Labour says the government is getting ready to unleash a stealth tax on motorists, who are being hit with high fuel prices already.
A senior source confirmed the idea of having two tiers was one of many proposals to reform the regime of vehicle excise duty, which raises £6 billion a year. This follows discussions from earlier this year about making roads more like utility companies and investing from external sources. There is a suggestion that the government could implement a lower vehicle excise duty for people who aren’t using motorways and trunk roads. However, charging drivers who do use motorways more isn’t attractive, while reducing rates for motorists who don’t means raising less money overall. It’s a hard decision and work is still ongoing. The insider added that this isn’t about charging drivers more.
The AA has warned that a two-tier road tax could mean motorways are reserved for wealthier drivers. Spokesman Paul Watters says they don’t want a first- and second-class system on the road network. there would be more traffic, and it would sorely stand out if enough traffic is diverted. This will cause more congestion and slower journeys, as well as be an extra bother for villages and towns while increasing the risk of A road accidents.
Another proposal is shaking up the road fund banding system. The duty is paid on a sliding scale of 13 bands, which range from zero to over £1,000 during the first year of a vehicle being registered. Motorists currently pay based on the amount of carbon dioxide their vehicle emits. Another idea is replacing the yearly road duty charge on vehicles and, instead, imposing an upfront, one-off charge on new cars.
Cameron also says he wants to kick-start the economy by permitting investment funds and companies to compete to construct, maintain and run trunk roads and motorways. Drivers wouldn’t pay tolls to use roads already in place, which would be privatised, but firms would be allowed to develop additional pay-as-you-go lanes for motorists to use to get around congestion.
This comes as an Institute for Economic Affairs report calls for the government to privatise the whole road network, which would raise over £150 billion and would mean road users pay less and have better quality roads. It says motoring taxes need to be completely phased out and replaced with road tolls, which could be a cheap as 6p per mile for a new motorway.
RAC Foundation director Stephen Glaister says that reforming road tax may be accepted if it leads to better journeys for drivers. Ministers would do well to restore trust among motorists if the proceeds are ring-fenced and put back into road provision.