Public support for pay-as-you-go charges on UK's road network

Press release

State of the Nation 2018: Infrastructure Investment
State of the Nation 2018: Infrastructure Investment
  • Updated: 18 October, 2018
  • Author: Emma Beer

Nearly half the population would support the introduction of ‘pay-as-you-go’ charges on UK roads, if they replaced Vehicle Tax and Fuel Duty, the Institution of Civil Engineers (ICE) has revealed today.

As part of the comprehensive assessment into infrastructure investment in the UK – State of the Nation 2018: Infrastructure Investment – ICE conducted a survey revealing that 47% of the population would be in favour of the new system charging drivers for the use of the roads they use, if it replaced current taxation streams. This compares to 23% who oppose the idea and 30% who were either undecided or did not have an opinion either way.

ICE surveyed the public on this matter before making a recommendation to Government on new revenue streams for the road network in recognition that as progress is made toward electric vehicles and cleaner fuels, traditional taxation and duty charges would begin to dwindle.

The State of the Nation 2018: Infrastructure Investment was launched today (18 October) at ICE’s London Headquarters. The report is available for download.

Alongside the recommendation on ‘pay-as-you-go’ charges for the road network, the State of the Nation 2018 report also recommends that the Government should consider contingencies, such as a UK Investment Bank, against the loss of low-cost finance should the UK lose access to the European Investment Bank after our withdrawal from the EU.

Paul Sheffield, ICE Vice President and Chair of the SoN Steering Group said:

“It’s important that we recognise the changing societal landscape and adapt accordingly – moving towards an electric vehicle fleet will require a change in the way taxes are charged and collected, just as a change in emerging technologies will require variation in how energy is stored. This report makes recommendations to government as we work together to create a sustainable future for infrastructure.

Professor Lord Robert Mair, ICE President, said:

“We face a time when the demands on infrastructure services are changing and increasing, with pressures from population growth, ageing demographics, increasing urbanisation, and resilience issues due to climate change. To respond to these in the long-term, and remain globally competitive, we must have an open and robust debate about how to fund our future infrastructure needs – and encouraging private investment must be considered.

The need for debate about future infrastructure spending is particularly timely as we look at the UK’s future spending trends. The OECD recommendation is that by 2030, global infrastructure spending should be 3.5% of world annual GDP. However, the fiscal envelope for public investment in UK infrastructure between 2020 and 2050 sits at 1.0%-1.2%, with any further investment to come from the private sector.

The report states that it is important there is a healthy mix of public and private investment to ensure a diverse range of financing streams and enable the benefits of delivering socially important infrastructure.

The report’s findings and recommendations are based on discussions, conversations and workshops with over 150 organisations and professionals. As well as civil engineers, the panel consulted with experts from the wider infrastructure sector, and the investment community.

The full list of recommendations is:

Sector-specific interventions to enhance infrastructure investment

  • The Government should give serious consideration to replacing the existing generation of road taxes with a pay as you go model for the busiest roads in England.
  • Energy storage and other emerging technologies should receive enhanced Government support through appropriate mechanisms drawing on the successful impact of Contracts for Difference on the renewable energy market.
  • Water Asset Management Periods should be flexible enough to enable the planning and delivery of long-term programmes, which meet future demand caused by demographic and climate changes and enable more effective financial planning.
  • Market-led proposals in rail should be reformed in a way which simplifies applications and respects the sharing of intellectual property from all bidders.

Overarching policy recommendations for Government

  • The feasibility of establishing a UK Investment Bank should be explored as a contingency against a loss of access to low cost anchor finance from the European Investment Bank and to maintain domestic expertise in infrastructure investment.
  • Active steps should be taken to facilitate the use of alternative funding and financing mechanisms, including asset recycling, land value capture and crowdfunding.
  • The National Infrastructure Commission should be placed on a statutory footing in the long-term to ensure its permanence and enhance its ability to give independent expert advice.
  •  The National Infrastructure and Construction Pipeline should support the investor community through providing increased detail of the risk and viability of individual projects

Download the report