Comeback for road tax as drivers go electric?

DRIVERS could face a new road-user charge, with the government looking to replace the revenue it will lose from fuel duties as the use of electric vehicles becomes increasingly common.

Picture: ROB CURRIE. (31864975)
Picture: ROB CURRIE. (31864975)

Road-user charges are being investigated by the government as one of the ‘economic levers’ that could be brought forward for consultation in the next government term.

The proposed Government Plan states that these charges would ‘replace revenue lost from future diminishing returns from fuel impôt duty as the fleet moves away from internal combustion engines’.

Correspondence from a consultant working on environmental proposals for the government was accidentally shared with a number of others – and seen by the JEP. It stated that a road-user charge was one long-term proposal they were considering to replace fuel-duty revenues as more vehicle owners opt for low- or no-emission cars.

In a statement responding to questions from the JEP about road-user charges, a government spokesperson said: ‘This is a signal that work will be commencing in 2022 to examine what might prove applicable for Jersey. Work has not yet begun but will be undertaken within government using technical support where needed.’

They added: ‘There are no formal proposals available at the moment and the first stage of the work will look at lessons learnt in other jurisdictions. As with all policy development, it will be carried out in discussion with key stakeholders and the community and take into account the social, economic and environmental impacts of any proposals and the States Assembly will ultimately decide upon final proposals.’

In February 2020 the States approved a Carbon Neutrality Strategy. The aim of reducing emissions by 2030 ‘presents a significant macroeconomic challenge in funding the transition to a low-carbon economy’, according to the Government Plan, which also describes a need to explore ‘potential environmental economic instruments (charges, taxes or fiscal levers)’, including road-user charges.

Deputy Kirsten Morel said he had been expecting the charge to be mentioned in the Government Plan, calling it an ‘understandable suggestion’, given the increasing popularity of electric vehicles and the revenue that would be lost as a result. He said it was ‘perfectly doable’, adding that the Island had had road tax before, which had been replaced by petrol duties.

Environmentalist Nigel Jones, the chairman of Jersey in Transition, said he had ‘never been a great enthusiast of increasing taxes and charges to try to steer people towards using cars less’.

‘In Jersey we have people who are very wealthy. When you put up taxes, you basically price out people on low and middle incomes rather than the rich, who carry on regardless,’ he said.

The government could ban the use of cars in certain areas at certain times, he suggested, which would ‘apply to everybody equally’.

He also said the Treasury Department would make savings on road maintenance as more people opt to ride bikes. He said the impact of a bicycle on a road was a ‘fraction’ of that of a 4x4.

Reform Jersey member Deputy Rob Ward said: ‘We are not going to solve the problem with more regressive taxation measures that punish people for making the right decisions.’

He also said there needed to be a ‘much more holistic’ approach to achieving carbon neutrality, and that the government should focus on ‘rebuilding our infrastructure rather than making it less affordable’. He added that there had to be ‘incentives’ to move people away from polluting fuels, ‘not just sticks – there has got to be carrots’.

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