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Road pricing is an inevitable solution to the motoring tax gap, says the BVRLA

28 October 2021

The British Vehicle Rental and Leasing Association (BVRLA), along with representatives from the RAC foundation, the Renewable Energy Association (REA) and the Road Haulage Association (RHA) have voiced their opinions to the Transport Committee that a new road pricing scheme should be developed urgently in order to achieve a smooth transition from the current emissions-based tax scheme. 

Following the Treasury’s Net Zero review, the BVRLA say that road pricing will be an inevitable solution to the £37billion void left by motoring taxes, such as fuel duty, vehicle excise duty (VED) and landfill tax, as electric vehicle uptake increases. 

As we approach the 2030 deadline for the sale of new internal combustion engine (ICE) cars and vans, and hybrids from 2035, the combined total number of plug-in vehicle registrations is predicted to hit around 3million by 2025, 10million by 2030 and 25million by 2035.

We could see road pricing implemented by turning motorways into toll roads, or instituting a pay-per-mile option, as well as more congestion charging zones. 

BVRLA director of corporate affairs Toby Poston said, “Most reasonable people will accept that it is inevitable. As more and more people are adopting ZEVs [zero-emission vehicles], they should be paying their way. The longer we leave it, the more people are going to get used to having very low-cost transport if they are using electric vehicles.” 

Speaking about what a road pricing scheme should look like, Toby Poston said, “It should be based on a simple ‘distance driven’ model that considers vehicle weight, emissions and use case, with discounts given to shared mobility solutions – such as car clubs, rental cars, buses and taxis – to incentivise more sustainable travel choices.”

Director of business and international tax at Treasury Mike Williams said, “[it has] long been recognised that the transition to net zero will erode fuel duty and vehicle excise duty receipts.

“Were the current tax system to remain unchanged across the transition period, tax receipts related to most fossil fuel-related activity will decline.” 

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