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Reform Scotland calls for Pay-as-you-drive road pricing

Reform Scotland calls for national and local road pricing

Think tank proposes the abolition of current motoring taxes, replaced by fairer pay-as-you-drive scheme

Reform Scotland, the leading independent, non-party think tank, has called for the abolition of Fuel Duty and Vehicle Excise Duty and their replacement by a national system of road pricing whereby people pay according to which roads they use and when. Their latest report, “Pay-as-you-drive – the road to a better future”, calls for the three objectives behind motoring charges to be reducing emissions, cutting congestion and increasing fairness. 

The Executive Summary can be viewed by clicking here, and the full report can be read here.

The report highlights three main areas of concern, which are:

  • Increasing emissions: while other sectors are seeing a reduction in carbon emissions, transport’s contribution is increasing
  • Increasing congestion: little progress is being made in reducing congestion or increasing journeys to work by public or active transport – indeed there has been a 12% increase in traffic on Scotland’s motorways
  • Unfairness and inequality: Rural drivers filling up a Ford Mondeo pay over £10 more at the pump than urban ones, with fewer public transport options

Reform Scotland believes the current system of motoring charges is fundamentally unfair and lacks clear objectives. 

Vehicle Excise Duty (VED), whilst addressing carbon emissions through its grading structure, punishes those who drive infrequently by charging them exactly the same as those who drive on a regular basis.

Fuel Duty, meanwhile, is a blunt instrument which takes no account of which roads are being used, and at what time. The fact that British drivers pay more tax on petrol and diesel than any other EU country, as a percentage of the pump price, increases the public perception that Fuel Duty is simply a revenue generator for the Treasury.

Reform Scotland’s Pay-as-you-drive (PAYD) system would mean that people pay depending on which roads they use and when they use them. So, the amount they pay is a better reflection of the emissions and congestion they cause which is both a fairer and more efficient way of allocating scarce road space. 

It is calling for the Scottish Government to launch a feasibility study on a national and local scheme in which central government would ‘price’ motorways and trunk roads and local authorities would ‘price’ local roads. However, the think tank makes it clear that before any PAYD system could be instituted, the fiscal levers offered by its Devo Plus proposal must be deployed in order that VED and Fuel Duty could be abolished as PAYD became live.

Commenting, Reform Scotland’s Director Geoff Mawdsley said:

“The way we currently charge drivers is bad for the environment, promotes congestion and is unfair on low-mileage motorists and those in more remote areas. We need to learn from other countries who do this better, and that’s why we’re calling for Pay-as-you-drive.

“We believe that Pay-as-you-drive, with central and local government pricing roads and being accountable to their electorate for their level, would encourage motorists to change their behaviour. 

“As a result, it would reduce emissions because people will consider alternatives to the car; it would reduce congestion because people will consider driving at cheaper times or on cheaper roads; it would benefit the national economy as people and goods could move more freely and quickly, as well as the local economy as people chose to shop closer to home; and it would be fairer on drivers who drive on remote, quiet roads or at off-peak times.

“Scotland is a geographically diverse country which needs a fair solution, tailored to meet its needs which benefits people, the economy and the environment. The levers of Devo Plus, together with some political will, could revolutionise the choices we make with our cars. It is action which is long overdue.”