My Lords, I agree entirely with what my noble friend has just said about the imperative of driving up productivity, but I want to speak on a niche subject which has not been addressed at all so far in the debate but which is highly relevant to the commitment in the Queen’s Speech to
“a responsible approach to the public finances”.
Under current policies, there will be an annual hole of £30 billion in government revenue because revenue from fuel duty and excise duty on cars will entirely
disappear as electric vehicles are exempt. By 2030, the loss will be roughly tuppence in the pound, and if no action is taken there will be windfall gains for drivers against non-drivers, public transport will become more expensive at time when it needs to be encouraged, and there will be an increase in congestion and, crucially to the debate today, a large hole in government finances. We should think now about an alternative basis for replacing this lost tax, and I believe the case for road pricing is overwhelming.
While my noble friend Lord Wakeham was busy privatising the electricity industry, I was Transport Secretary and advocated the policy, but I discovered it was a matter not for the Transport Secretary but for the Treasury. The case is much more powerful today because of the advent of electric vehicles, the successful introduction of new technology with the congestion charge and automatic number plate recognition, and the need to make more intelligent use of a finite resource; namely, road space—no one suggests building our way out of congestion. Road pricing can do this with differential rates for congested routes, different rates for different times of the day and week, bringing it into line with other forms of transport, and exemptions for people with a disability, which you cannot do with fuel duty.
Ministers may be concerned at the hostile reaction to the policy when it was last floated. In 2006, Lord Darling—Alistair Darling as he then was, the Transport Secretary—announced that a pilot scheme would be decided by 2007 and would be up and running within five to six years, promising a 40% reduction in congestion with only 4% fewer cars on the road. The policy was abandoned two years later after a hostile public response. I believe that today’s response will be different. A survey carried out last year by the Social Market Foundation indicated a major shift in public opinion. Of 3,000 adults surveyed, more respondents supported road pricing as a replacement form of taxation than opposed it: 38% to 26%. The Social Market Foundation has published today a paper, Miles Ahead, which sets out a compelling case for road pricing.
I understand the concern that people may have about their car being tracked, but the reality is that that is already happening with ubiquitous CCTV and automatic number plate recognition, and if you carry a mobile phone with you, you are being tracked. This is not just a proposal from a Back-Bench Peer. The Transport Select Committee in the other place recently published a report which concluded that road pricing should be implemented. My question to the Minister is this: will the response to the Select Committee report confirm that road pricing is being actively considered?
I have a second niche subject, this time relating to the commitment in the Queen’s Speech on climate change and net zero. It has a common element with my first suggestion in that it relates to electric vehicles. As other noble Lords have said, over the next few years we will become more reliant on sustainable energy resources: wind, hydroelectric and solar power. The problem is that these sources are intermittent, and there is therefore an imperative for economic means of storing the electricity to avoid reliance on fossil fuels.
The Climate Change Committee has estimated that by 2030 there will be 16 million electric vehicles, each with a capacity of 60 kilowatt hours. My noble friend on the Front Bench will be able to say exactly how many power stations that equates to. These vehicles are unused for 90% of the time and, for the most part, will be parked outside homes at the time of peak energy demand. They can be recharged in the small hours of the morning at times of low demand, and 72% of homes have off-street parking. So my second niche question to the Minister is: what is being done to promote this new source of energy and to iron out the peaks and troughs of demand for energy? In particular, what is being done to promote connectivity between this potential source of stored energy in motor vehicles on the one hand and domestic energy supplies and the national grid on the other?
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