Governments have used motorists as a cash cow for decades. Fuel duty and road tax raise around £35bn a year, while less than £10bn is spent on road maintenance and improvements. As motoring taxes have increased, investment in new road capacity has collapsed.
Transport policy has gradually become dominated by an agenda that seeks to reduce emissions and shift journeys to public transport. In terms of revenues, however, this policy is beginning to backfire. Drivers are now buying smaller and more fuel-efficient cars, meaning they pay much less tax. Electric vehicles also threaten a collapse in receipts.
This potential tax shortfall explains the urgency with which the government is exploring new ways of charging motorists. This week, it emerged that officials are considering a two-tier system of road tax, with motorists paying a higher rate if they wish to use motorways.
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