Smart Road Pricing

Gavin Newlands Excerpts

Wednesday 9th March 2022 Westminster Hall

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

It is a pleasure to see you in the Chair once again, Sir Charles. I congratulate the hon. Member for Carshalton and Wallington (Elliot Colburn) on securing the debate. He started by making a strong point—I am not sure whether it was about his constituency or whether it was about Sutton being the only London borough without a tube station. I have sympathy with that, growing up and living for most of my life in Renfrew, which is the largest town in Scotland without a train station. I thought that he made a powerful contribution at the start of the debate.

The hon. Member for Richmond Park (Sarah Olney) said that the case for change was pressing, if we are to maintain taxation levels and reduce road transport’s carbon footprint; Members will hear from my speech that that is something I wholeheartedly agree with. She also referenced the report by the Institution of Civil Engineers, which means I do not have to; for the purposes of time, I am grateful for that.

The hon. Member for Central Suffolk and North Ipswich (Dr Poulter), who is no longer in his place, made an important point about the difference between rural and urban. Any scheme that came in would have to take that difference into account, and there would have to be variations or exceptions for those in rural areas for that very reason.

The hon. Member for Orpington (Gareth Bacon) clearly had issues with TfL and the Mayor of London, but he made a very stark point about the £4,500 cost before running costs of any other expansions of ULEZ. I should declare that I am a member of the Transport Committee, which the hon. Member referenced in terms of road pricing. It is true: we said recently that there is no viable alternative to road pricing moving forward—certainly that we can see at the moment. The hon. Member for Central Suffolk and North Ipswich also reiterated the point that the scheme must be national. Unless he meant Scotland having a national scheme, that is something I have a slight disagreement with, but I will come on to that later.

If road pricing is to be workable, it needs to be part of a wholesale review and replacement of our complex taxation system. The current arrangements are increasingly not fit for purpose in the 21st century, with a system that—apart from some tweaks and amendments over the decades—is, at its core, the same system that has been in place for nearly a century.

Net zero and reducing carbon emissions are obviously policies that go far beyond transport. They straddle all aspects of our society. Reducing car usage, improving public transport and developing active travel as a real alternative to private transport will have a huge impact on us all and on how we live our lives. Getting people out of cars is intrinsically linked to improvements in public transport, which, in turn, helps to support our town and city centres; again, in turn, that helps to develop local economies and provide better employment in our communities.

With private cars accounting for around 40% of transport-related emissions, bringing down levels of car usage is a key strand in the Scottish Government’s drive towards a net zero society. Their target—which, I admit, is hugely ambitious—is to reduce overall car kilometres by 20% by the end of this decade. There is no doubt that it is a tough target, but it will result in huge gains in carbon reduction if it can be met.

To salami slice road pricing as something that can be leveraged to promote those reductions while leaving other policy levers in the hands of the DFT and Treasury —as we have seen with buses, aviation and, notably, trains, for the last 20 years or so—is a recipe for delay and the danger that our large-scale ambitions will not be met. To have a situation where portions of charging and taxation policy are devolved while some remain at Westminster is a recipe for confusion and, above all, being unable to fully realise the potential that could be unleashed with the full devolution of powers over motoring taxes to the Scottish Parliament—the Minister probably did not expect me to say anything less.

Sales of electric vehicles are at record levels, despite—I would say—the UK Government’s policy at times. While we have some way to go to match the astonishing progress in countries such as Norway, the trend is clear: EVs are replacing internal combustion engines and, by 2032, every car sold will have to be zero-emission. As that switch happens, the revenues from fuel duties will drop at an ever-increasing pace; as overall emissions from private vehicles drop, so too will revenue from vehicle excise duty based on CO₂ emissions without further reform. The Transport Committee heard evidence that, without action, taxation revenues from motoring will drop to zero by 2040 if UK targets for net zero are met. Clearly, that is neither sustainable nor healthy for road users or our wider economy.

I do not pretend that the transition to a modern taxation regime will not involve a real and sometimes difficult national debate and conversation about vehicle taxation and its impact on motorists and other road users; one has only to look at the debate around a workplace parking levy in Scotland at the moment. However, the alternative is a long-term disaster on our roads, for our environment and for our wider economy. The transition must include: as I said, the full devolution of power over motoring taxation—all taxation, if in the Minister’s power, but certainly motoring taxation—to the Scottish Parliament.

The enhanced incentivisation of the extra grants for home chargers, a scheme whose scope the UK is inexplicably slashing in April, and interest-free loans, along with significant investment in much more comprehensive electric vehicle charging infrastructure in Scotland, compared with most of England, serve to highlight the differences in policy and, more importantly, the urgency with which it is delivered. Without the taxation powers to tie together the changes in duty revenue, however, along with the wider policy objectives of the move to net zero, the Scottish Government are fighting with one hand tied behind their back. Yet still, over the past 10 or 20 years, they have outperformed the UK Government on all those metrics.

Transferring full control over vehicle and motoring taxation to the devolved Administrations will allow policy to reflect the different pace at which things are moving. On nearly all indices, Scotland is outstripping the rest of the UK in the transition to net zero, and yet the fiscal and financial framework in which the Scottish Government have to operate is stuck in the last century. It takes little to no account of the different priorities of the respective Governments.

To conclude, the Chancellor has made a commitment in writing to the Scottish Government to engage with Scottish and other devolved Governments on motoring taxation. I hope that the Minister will get the ball rolling for colleagues as quickly as possible, to ensure that serious discussions can take place with the devolved Administrations on how and when those powers can be transferred to Holyrood, Cardiff and Stormont as timeously as possible. What might work for Greater London—Greater London has been mentioned a lot in this debate—cannot be copied and pasted into Scotland or Wales. To sum up, I hope that the Minister will provide us with an update on that proposed engagement.

Today alone, we have seen action by the Irish Government, temporarily cutting fuel duty by 15 cents and 20 cents for petrol and diesel, respectively—to help the haulage industry and to keep the cost of living down. Whether that should happen here is a debate for another day, but it shows how a Government with the will and the power to act quickly in the face of changing circumstances can take real action on motoring and haulage costs. Road pricing and the renewal of modern motoring taxation will give Governments here in Westminster and in Edinburgh the opportunity to respond and react far more nimbly and responsively to such challenges and to provide the kind of support needed by road users and industry alike. I urge the Minister to speed her colleagues along in delivering the road taxation system of the future.