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Regular news: Issue 597 25 May 2012

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Road pricing ‘vital to plugging fall in motoring tax revenues’

One of the country’s most respected economic research institutes has thrown its weight behind road pricing, saying a new form of motoring taxation will be essential if better fuel efficiency leads to a sharp drop in fuel duty revenues.

The comments come in a report by the Institute for Fiscal Studies, which was commissioned by pro-road pricing organisation the RAC Foundation to review motoring taxation policy.

Using data from the Office of Budget Responsibility, the IFS says real terms...

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Your Comments:

1 Jun 2012

1. A decline in revenue from one kind of motoring taxes does not necessarily have to be made up increases from other motoring taxes - there is no rule why the revenue from motoring taxes shd remain constant, especially if we were to cut down on road construction, as we should.

2. If there were such a rule, VED rates and fuel tax rates cd always be increased, or there cd be some other new form of tax, such as a purchase tax on motor vehicles.

3. There is a potential conflict between using a tax to change anti-social behaviour and using the same tax to raise revenue. The revenue-raising authorityacquires a vested interest in the continuance of the behaviour. There are lots of ways of limiting car use for which a better case can be made than for road pricing. Foremost among them is lowering amd enforcing speed limits on road of all classes.

4. The case for a simple form of road pricing for lorries is much stronger, and still would be even if the existing rules on lorry operation were much better enforced. A constant pressure is needed to ensure that shippers and operators are always asking themselves such questions as: Can I find a closer supplier? Can I organise my distribution using much tighter delivery rounds? Can I delay a shipment in order to achieve a higher load factor? Can I use a smaller vehicle? Can I use rail or water rather than road?

Stephen Plowden