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Business organisation says proportion of taxation raised from motorists should be diverted to road charging

The Confederation of British Industry (CBI) says that road charging should be introduced on the strategic road network in England, comprising motorways and major A roads. It also says that responsibility for the network’s budget should be taken away from the Department for Transport (DfT) and given to an independent regulator.

According to proposals from the CBI contained in a report called 'Bold Thinking' which it says is exactly what is needed to address the congestion  it claims is costing the economy billions of pounds each year and stifling the economic recovery, a proportion of taxes raised from motorists through fuel duty and vehicle excise duty should be converted to a ‘user charge’ which would allow them to access major roads.

Private operators, acting under license from the CBI’s proposed regulator, would look after regional parts of the road network, but the employers’ organisation adds that in the long-term, additional investment would be required to fund major projects – and that could mean operators not only having to arrange long-term borrowing, but also the introduction of toll roads in some places to help pay for the works.

According to the CBI, the measures are needed because of what it says is a £10 billion hole in Highways Agency funding, as well as the prospect of the level of taxes raised from motorists going into decline as vehicles become more fuel-efficient.

According to the CBI, congestion costs the British economy £8 billion a year and it believes that figure could rise to £22 billion by 2025.

CBI director-general John Cridland commented: "Every day, people up and down the UK lose time and money because of our clogged-up roads. Gridlock is an all-too-familiar tale of life in the UK, and one that is already costing us £8 billion a year.

"With public spending checked, the case for new funding solutions is even more compelling, and the Government recognises this. Infrastructure matters to business, and delivering upgrades to our networks is one of the highest priorities for the CBI to get the economy moving again.

"It's clear we need a gear change in how we manage and pay for our road network in the 21st century. A lack of investment means we are really struggling to increase road capacity, let alone adequately maintain what we already have."

The proposals are likely to provoke controversy since they would involve specifically ring-fencing at least a proportion of taxation related to motoring to pay for roads – something that Sir Winston Churchill, as Chancellor of the Exchequer during the 1930s, campaigned against.

As outlined on the I Pay Road Tax website, Churchill described as “nonsense” the notion that “motorists are to be privileged for all time to have the whole yield of the tax on motors devoted to roads.”

ipayroadtax.com/no-such-thing-as-road-tax/bring-back-the-road-fund/

Ultimately, his and others’ opposition led to the abolition of the Road Fund in 1937, but even before that, revenue raised from drivers only paid for a fraction of building and maintaining the road network, which since then has been paid for out of general taxation, with money raised through vehicle excise duty and fuel duty also going into a central pot.
 

Born in Scotland, Simon moved to London aged seven and now lives in the Oxfordshire Cotswolds with his miniature schnauzer, Elodie. He fell in love with cycling one Saturday morning in 1994 while living in Italy when Milan-San Remo went past his front door. A daily cycle commuter in London back before riding to work started to boom, he's been news editor at road.cc since 2009. Handily for work, he speaks French and Italian. He doesn't get to ride his Colnago as often as he'd like, and freely admits he's much more adept at cooking than fettling with bikes.