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Road Pricing ‘Inevitable’ as EV Boom Leaves £35bn Tax Gap, Warns Infrastructure Chief

The UK must brace itself for the introduction of road pricing to plug a £35bn gap in tax revenues as the country shifts towards electric vehicles, Sir John Armitt, chair of the National Infrastructure Commission (NIC), has warned.



Speaking at an event in Watford, hosted by engineering firm Skanska, Armitt called for a “proper public debate” on the future funding of Britain’s road network and other critical infrastructure projects.


“It’s politically a very difficult issue, isn’t it? But many people will say road pricing is inevitable. Personally, I don’t see why it should be any different to anything else,” Sir John told journalists. “We pay for all our other infrastructure services as we use them, and we pay for driving on the road, as we use it, via petrol tax. And if you’re going to lose the petrol tax, at [more than] £30bn a year, what is government going to replace it with?”


His remarks come at a time when the government’s motoring revenues from fuel duty and vehicle excise duty – currently raising around £35bn annually – are set to dwindle as electric vehicles become more widespread. Neither of these taxes apply to electric cars, adding urgency to the debate around how to fund road maintenance and infrastructure once petrol and diesel cars are phased out by 2035.


The Office for Budget Responsibility (OBR) predicts that nearly all cars on UK roads will be electric by 2045, which will see traditional motoring taxes effectively disappear.


“This is a really big issue,” Armitt emphasised. “At the end of the day, if we’re going to pay [for using the road network], we either pay through our taxation or we pay through the point of use.”


While Armitt refrained from endorsing a specific solution, he hinted that technology, such as number plate recognition, could be a viable option. “People would probably not like this in terms of ‘Big Brother is watching you,’ [but] you could pay a different rate, per time of day, per type of road you were driving on, anywhere in the country, and you just get a bill.”


Road pricing, which charges drivers based on their road usage, is already employed in the UK to a limited extent, such as the M6 Toll and the London congestion charge. However, similar schemes are more prevalent in European countries like France and Germany.


Armitt’s comments coincided with an announcement from Treasury chief secretary Darren Jones, who unveiled the launch of the National Infrastructure and Service Transformation Authority (Nista). The new body will replace the NIC and the Infrastructure and Projects Authority, with a mandate to oversee large-scale infrastructure projects. Sir John will continue as chair of the NIC until July, when Nista will take over.



Jones revealed that the government plans to unveil a 10-year infrastructure strategy, which will be integrated into the Treasury’s spending review next year. This strategy will include vital projects such as new schools, hospitals, and housing. Taking a swipe at the Conservative government’s past failures, Jones argued that the creation of Nista would “restore the confidence of businesses to invest and help break the cycle of low growth.”


However, concerns have arisen over the future of several major infrastructure projects under Labour’s leadership, including a recently announced delay to the £9bn Lower Thames Crossing – the largest road scheme in the UK.


Armitt urged ministers to push forward with the scheme, describing it as “one of the most important infrastructure projects in the country”. He also suggested that private sector funding could be part of the solution.


The NIC’s latest report, released on Thursday, identified inefficiencies in UK infrastructure projects, with high-speed rail being particularly costly. The report claims that HS2, Britain’s flagship rail project, is on track to become the most expensive high-speed rail line in the world, at £145m per kilometre of single track.


The NIC pointed to four key problems – a lack of strategic direction, unclear accountability, a risk-averse culture, and supply chain issues stemming from inadequate training investment – which it said could be addressed to save between £1bn and £2bn annually in transport infrastructure costs through the 2030s.


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