Road Tax Or Pay Per Mile – What Would You Choose?

How would you fancy owning a share of the UK’s road network and paying for every mile you drive, while paying no road tax?

That’s what the Social Market Foundation is suggesting as a way of combating Britain’s ever-worsening congestion problems (just think about Monday morning on the M25 or Friday night on a bank holiday weekend…).

The SMF reckon that each of us would receive a share of the road network that was worth around £1,500. We could keep it and (theoretically) receive dividends each year (just like company shares), or we could choose to sell it to someone else and pocket the cash. In the meantime, we’d be paying around 10p per mile for each mile we drove in road tolls.

The basic argument put forwards by the SMF is that at present, road tax doesn’t reflect our usage of the road network – people who drive a little pay too much, while people who drive a lot pay too little. (Of course, so-called road tax is not actually a tax on roads, it’s a tax on vehicle ownership, but in most cases it doesn’t make much difference).

Paying per mile would give people an incentive to share cars, drive less and so on. If the per mile charges were adjusted to be lower at off-peak times, there would also be an incentive for people to adjust their travel patterns to avoid busy times wherever possible. This would reduce congestion and even out usage of our roads. There’s also an important environmental aspect – CO2 emissions on free-flowing roads are much lower than on congested roads.

So far, so good. However, I don’t believe that many people would be better off under the scheme proposed by the SMF. Their figures seem skewed to the low-mileage driver. They claim an average mileage per driver of just 5,100 per year and assume that spare money would be paid back in dividends to road users each year – rather than being invested in ever-more road improvement projects.

To sum up, I’m sold on the concept but I don’t believe I’d save any money. However, it’s possible that to save the environment and find a solution to road congestion, we will all just have to pay out a little more.

What do you think? Leave a comment below and let me know.

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