Lord Young of Cookham
To ask His Majesty’s Government what plans they have to introduce road pricing.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, the Government have no plans to introduce road pricing.
Lord Young of Cookham (Con)
That short reply will allow lots of time for questions. Three years ago, the Transport Select Committee in another place produced a unanimous report on road pricing. The committee’s chair said:
“It’s time for an honest conversation on motoring taxes”,
and the committee called on the Government to “act now” to avoid a £35 billion “fiscal black hole”—something we know the Minister disapproves of. As electric vehicles become the norm, fuel duty revenue will fall away. That can be made good by road pricing based on the distance a motorist travels, the time and the place. Modern technology makes that possible. It would reduce congestion and make better use of our railways. By the way, the Minister’s Treasury colleague, Torsten Bell, has written a publication strongly supporting road pricing, so might he have a conversation with him?
Lord Livermore (Lab)
I am grateful to the noble Lord for his question. As I said, the Government have no plans to introduce road pricing. As he will know, we need to balance several objectives: we must always ensure fiscal stability and sustainability, as he indicates; motoring must remain affordable for consumers; and we must support the decarbonisation of the transport sector. Achieving these objectives means that we need to take a balanced approach. As the noble Lord may know, electric vehicles are now in scope of vehicle excise duty, raising an additional £1.6 billion every year by the end of this Parliament. We have set the rates for company car tax to gradually normalise the taxation of electric vehicles. At the same time, in the last Budget we extended the temporary 5p fuel duty cut and cancelled the planned increase in line with inflation. Meanwhile, we are maintaining incentives for people to buy new electric vehicles, including investing £650 million in the electric car grant and £400 million to roll out charging infrastructure.
Lord Birt (CB)
My Lords, when I worked at No. 10, I led a team, which had Treasury representation, that looked at road-user charging alongside other transport issues. Does the Minister accept that a flexible system of road-user charging could bring many benefits, such as an allocation of free mileage for the less well-off, rates set to incentivise decarbonisation and dynamic pricing to reduce peak-time congestion?
Lord Livermore (Lab)
I am grateful to the noble Lord for his question. I absolutely recognise the considerable expertise and experience that he has in this matter—experience and expertise that is probably found right across this House. I do not have specific thoughts on the specific points he raises because, as I say, we have no plans to introduce road pricing.
Lord Spellar (Lab)
My Lords, the last question identifies some of the key problems with road pricing. Mention was made of peak-time charging. That may be fine for civil servants and those living in London and the Home Counties, who have a high propensity to travel to work by rail, but the great majority of the rest of the country go to work by car. Those who live in rural areas have to travel long distances for facilities and for work. Those who work in industrial areas, again, quite often because of the location of the work, have to travel by car. There are huge socioeconomic issues here. Quite frankly, it needs to be taken out of the rarefied atmosphere of discussions between think tanks in Whitehall and instead have some common-sense examination involving car drivers.
Lord Livermore (Lab)
I am grateful to my noble friend for his question. I agree with a great deal of what he said. As I said at the outset, one of the objectives we must keep in mind is that motoring must remain affordable for consumers. As I say, that is why in the last Budget we extended the temporary 5p fuel cut and cancelled the planned increase in line with inflation, which saved drivers around £3 billion this year. It is why we are introducing a new fuel finder to increase competition between fuel stations and to help drive down prices. As my noble friend rightly says, a well-developed road network cuts transport costs, connects businesses to markets, and unlocks jobs and investment right across regions. That is why at the spending review the Chancellor announced £24 billion of capital funding over this Parliament to maintain and improve both motorways and local roads.
Baroness Pidgeon (LD)
My Lords, while I hear clearly the Minister say that there will not be any national scheme, what support is being provided to metro mayors across the country who may consider road pricing as a tool to reduce traffic in city centres and help improve public transport?
Lord Livermore (Lab)
I am grateful to the noble Baroness, who I know has a great deal of expertise in this matter. The local schemes that she describes, such as clean air zones of the ULEZ type and so on, are the responsibility of local authorities, and it is right that the responsibility for those lies with local authorities.
Baroness Neville-Rolfe (Con)
My Lords, much revenue is raised from motorists through vehicle licensing, fuel duty and indeed congestion charges. If there was a move towards raising more from road pricing, can the Minister confirm that it would be coherent and reasonable and not just a policy of soaking the motorist? I have in mind the Government’s decision to scrap our planned Conservative restrictions on low-traffic neighbourhoods, which create congestion and encourage overzealous enforcement, and the overuse of 20 mph limits that hit working people—who are rightly a concern of the noble Lord, Lord Spellar—across the country.
Lord Livermore (Lab)
The noble Baroness asks a hypothetical question that I have already dealt with. The Government have no plans to introduce road pricing. She mentions low-traffic neighbourhoods. We want to support local authorities to deliver streets that work for all road users and enable integrated journeys. Decisions on which neighbourhoods should be low traffic lie with local authorities.
Baroness Hayman (CB)
My Lords, I urge the Minister to be not quite so adamant in his rejection of road pricing. My first job in government was as Minister for Roads. A year in, I was due to visit South Korea to look at road pricing and the opportunities that might occur in this country, but I was moved the day before I went. It was to be my first and only trip abroad as Minister for Roads, and I do not believe that anyone went after me. The arguments that have been made by the noble Lords, Lord Young of Cookham and Lord Birt, have become only more pressing in the years that have gone by, but the opportunities for making the system fairer have also increased because of the increase in technologies. I therefore urge the Minister to think a little more broadly on this issue.
Lord Livermore (Lab)
As I say, there is a great deal of expertise across the House on this matter, and the noble Baroness is no exception. She knows a great deal about the topic. I think I have said what I was going to say on this matter: we have no plans to introduce road pricing.
Earl Attlee (Con)
My Lords, why is it sensible to tax a motorist who drives 5 miles in the middle of Lincolnshire at 6 am exactly the same as a motorist who drives 5 miles on the M25 at 8.30 am?
Lord Livermore (Lab)
It may or may not be sensible but, as I say, we have no plans to introduce road pricing.
The Earl of Erroll (CB)
Does the Minister agree that there is in fact a huge privacy issue here? If, maybe in a marriage, someone can see where their other half has been going when they are not around, it could well cause a major rise in the divorce rate and other things.
Lord Livermore (Lab)
That is an interesting question, but it is one that I have no view on since we have no plans to introduce road pricing.
Lord Harper (Con)
My Lords, this is one of those occasions on which I hope the Minister will welcome the fact that I strongly agree with him. I am very pleased that he has adopted the policy that we set out in our manifesto at the election to rule out road pricing. As the noble Lord opposite said, most people in this country go to work in a car and depend on their cars. If the cost of motoring becomes cheaper as people get more electric vehicles, protecting the environment, we should welcome that it has become cheaper, not look for opportunities to make it more expensive. I urge the Minister to maintain the policy of no road pricing, however seductively I suspect Treasury officials will try to suggest that he change it.
Lord Livermore (Lab)
I am grateful to the noble Lord for his support of the policy that we have set out. I have been clear that, on many of the issues that he raised in his question, we as a Government are having to balance several objectives. We must always ensure fiscal stability and sustainability, motoring must remain affordable for consumers and we must support the decarbonisation of the transport sector. We will continue to balance those objectives.
Lord Hannan of Kingsclere (Con)
My Lords, returning briefly to my noble friend Lord Young’s question, I noticed that the Minister has unwontedly not mentioned the £22 billion black hole. Can he tell us what the current shortfall is?
Lord Livermore (Lab)
I will not speculate now or give a running commentary on the next fiscal forecast. The OBR will produce a new forecast in the autumn for the annual Budget in the usual way, and the Chancellor will take decisions based on that forecast.