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How should we pay for driving?�

Professor Greg Marsden

Institute for Transport Studies

Manchester Literary and Philosophical Society

Monday 14^th October 2024

A transcript of the talk that accompanied these slides is available here: https://eprints.whiterose.ac.uk/220261/1/DOI%2010.48785100294%20v2.pdf

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The route map

100 YEARS OF ‘STABILITY’

HOW IT WORKS NOW

WHY IT IS CHANGING ANYWAY

WHAT’S ON THE TABLE

WHAT IF WE THOUGHT DIFFERENTLY?

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A brief history

https://www.tringlocalhistory.org.uk/Tring/c_chapter%2002.htm

https://commons.wikimedia.org/wiki/File:Sir_Winston_Churchill_%2819086236948%29.jpg

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How do we pay for driving?

VED - online

Fuel Duty - at the pump
Simple to collect
Duty is invisible in price
Infrequent
En-route
Broadly standard price
VAT 20%

CC licence Leo Reynolds https://www.flickr.com/photos/lwr/515863200/

CC licence Jaggery https://www.geograph.org.uk/photo/7621953

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What do we pay for driving?

Fuel Duty 2.3% of Tax Receipts

£24bn out of £950.5bn
9^th largest source of tax income

Vehicle Excise Duty 0.8%

£8.1bn
15^th largest source of tax income

Comparators:

Council Tax £44.4bn
Alcohol Duty £13.1bn
Inheritance Tax £7.2bn

CC Licence: Images Money https://www.flickr.com/photos/59937401@N07/5856708903

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How do we compare?

55% of pump price is fuel duty and VAT
9^th Highest in Europe

CC Licence: Ortelpa, https://commons.wikimedia.org/wiki/File:Paris,_Gilets_Jaunes_-_Acte_IX_%2846724068321%29.jpg

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A Volatile Changing Environment

1990s Fuel Duty Escalator

2000s Silence

2010 ->

The Big Freeze

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The Big Freeze….

14 Years
5p = £4.8bn
£14bn per annum
£80bn

Government sleight of hand continues

BRITAIN blah blah blah blah blah

blah blah blah

Short termism

Blah blah. Blah

Chunter, blah, immigration blah.

Chancellor blah blah blah blah

Hard working families blah blah blah blah. Blah Chunter, blah, blah, blah.

blah end war on motorist blah

blah blah blah

Blah blah blah

Blah blah. Blah

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With significant impacts

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Fuel Duty Decline will continue

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Prolongs presence of ICE vehicles in fleet

Hampers carbon emissions reduction

Pushes PAYG future prospects further away

Worsens road safety

Exacerbates�social�exclusion�for some

Encourages

less

sustainable�vehicle�purchasing

Encourages

more �driving

Increases

relative�cost of�public�transport

Government takes no steps to directly replace diminishing fuel duty tax income

Lowers tax receipts

Normalises�expectation of�no increase�in cost of�driving

Plays to�‘Just About�Managing’�car drivers

Promotes weak car-centric planning

Invites greater inefficiency in access for goods

Reduces public transport use

Reinforces traffic growth

Worsens Congestion

Incentivises bigger car purchase

Encourages negative cycle of service cuts

The futures wheel of doing nothing how we pay for travel

Driving cheaper for most needy

Gap continues between EV and FF

Makes�right to drive�more�untouchable

Reduces road investment expectation by drivers

Reduces capacity for transport spending

Encourages other forms of taxation

Prompts more local charging schemes

Increases public sector borrowing

Greener Transport Council

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A New Dilemma

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Electrification Changes Everything

Petrol/Diesel

Fuel Duty - at the pump
Simple to collect
Duty is invisible in price
Infrequent
En-route
Broadly standard price
VAT 20%

Electric

n/a
n/a
n/a
Frequent (?)
At home or en-route
Discussion to follow..
VAT 5% domestic

Ivan Radic CC: https://www.flickr.com/photos/26344495@N05/50982074047

Electrification changes everything – in terms of how we pay for travel – disrupting a system that has been in place for 100 years.

So, if we set the characteristics of an electric vehicle payment system against the petrol/diesel vehicle I showed earlier.

There is no duty on the fuel, so its not only invisible in the price – it is non-existent.

The frequency of refuelling is higher (a car has a typical range of 400-600 miles compared with an electric car of 180 to 350). But one of the key changes is that you can, if you have off-street parking, charge from home. If you charge from home then you pay the same VAT as on domestic energy – i.e. just 5%.

It is also worth saying that electric cars are far more efficient than petrol cars per mile driven. Most of the energy in fossil fuels burned in cars is lost in heat. So, driving an EV uses around half of the energy per mile of a fossil fuel car and incurs almost no taxes per mile.

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What is coming is clear

Reproduced from Lam (2022) RAC Foundation

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17p to 24p per mile

14p per mile

11p per mile

7p per mile

or less

https://www.zap-map.com/ev-stats/charging-price-index

£1.35/litre

22p kWhr price cap

56p kWhr Slow/fast 80p/kWhr Rapid

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So how might this be fixed?

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Economists

“road users should pay the additional costs which their journeys impose on others”

See Phil Goodwin’s Summary of the History of Road Pricing https://tapas.network/64/goodwin.php

Image courtesy of https://wernerantweiler.ca/blog/2017-04-22-a.pdf

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Economists

Smeed report “Problems of the distribution of income – who would and would not be harmed by the policy advocated – will not be considered here. The general ramifications of such a policy are reasonably clear but the detailed analysis would be cumbersome and boring”

http://www.notolls.org.uk/mannews.htm

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Mobile Policy Elites

Miles Driven by Income Group (2023)

Source: NTS

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Mobile Policy Elites

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Pragmatism

Introduce a per mile fee just for EVs (annual payment) – New Zealand

Introduce a per mile fee for all vehicles (and equivalent reduction in fuel duty )

Run an opt-in scheme where you pay per mile instead of at pump - Oregon

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infuze

In 2023/24 UK Households Spent

£79bn on just owning cars
3 x what we spend on moving cars
14 x what we spend on p.t. fares

Purchase:use ratio even more skewed with electric cars

How do we really pay for driving?

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infuze

And so…

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infuze

Better alternative fallacy

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infuze

Cars

96% time stationary
33% don’t move on any given day
Average occupancy 1.6
14% is max % of cars on the move in peak

Does it have to be like this?

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Choose the vehicle you need for your journey?

Vending Machine of Mobility: Royal College of Art

edrc.ac.uk

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infuze

The question is not ‘can you live without your car?’ but ‘what would a world where people did not need to own their own cars look like?’

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Reimagine our streets?

Source: Royal College of Art

edrc.ac.uk

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How should we pay for driving?

Think about the types of places we want to live
Imagine the kinds of transport systems which will meet our needs
Decide what role of state, providers, communities, individuals are
Design system to meet those needs
100 years since this has really been addressed
If we fiddle at the margins then we will be consigned to a deepening crisis of automobility

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Contact & Readings

Greg Marsden – tragrm@leeds.ac.uk and LinkedIn
The INFUZE project https://in-fuze.org.uk/ and infuze@leeds.ac.uk

Phil Goodwin (2024) The Smeed Report on Road Pricing: Still influential after 60 years, but the difficult issues still remain, https://tapas.network/64/goodwin.php
Haines-Doran, T. (2024) The financialisation of car consumption, New Political Economy, 29(3), https://doi.org/10.1080/13563467.2023.2254727
Mattioli, G., Anable, J. and Goodwin, P. (2019) A week in the life of a car: a nuanced view of possible EV charging regimes, In: Proceedings of the eceee 2019 Summer Study on energy efficiency, Paper 6-272-19. Hyères, France, 03–07 June
Stephen Glaister (2014) The Smeed Report at Fifty: Will road pricing always be ten years way? https://www.ucl.ac.uk/transport/sites/transport/files/UCL-smeed-memorial.pdf
Chatterjee, K. and Lyons, G. (2001) Transport Lessons from the Fuel Tax Protests of 2000, Routledge

A transcript of the talk that accompanied these slides is available here: https://eprints.whiterose.ac.uk/220261/1/DOI%2010.48785100294%20v2.pdf