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  • You are here:ICE

Time runs out for road tax reform

Payg roads spaghetti junction (photo by  m v  on unsplash)

The government has 10 years to implement a fair, reliable and sustainable roads revenue model, says the ICE’s latest policy paper, Pay As You Go – Achieving Sustainable Roads Funding in England.

The paper expands on a recommendation made in ICE’s 2018 State of the Nation: Infrastructure Investment report published last year. It says that the government should consider replacing the existing generation of road taxes with a pay-as-you-go model (PAYG) for England’s busiest roads.

Tax revenue from petrol and diesel is expected to decline as more motorists switch to electric vehicles, so the government will have to find new revenue sources to replace it.

A survey, conducted for the ICE by YouGov last year found that 47% of the British public would support a PAYG model, if it replaced both Vehicle Excise Duty (VED) and fuel duty.  

The paper outlines some of the challenges of introducing a new system. These include building new infrastructure and installing technology, privacy and security concerns and regulation.

ICE vice president for public voice Rachel Skinner said: “Ensuring a fair, reliable and sustainable way of securing funding to improve and maintain our roads is crucial to safeguarding the UK’s economic and social wellbeing.

“We know there is some public support for a pay-as-you-go model to replace current roads taxation, and a range of options should be explored to craft a new, fair and lower carbon solution for road users of the future.

“We would urge the government to give this urgent and serious consideration, with a view to an early decision on implementation well before the end of the next decade.”

The ICE recommends that this alternative system is in put place on the nation’s busiest roads no later than the end of 2030.

This would ensure there is no adverse impact on the UK’s road maintenance budgets.


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