Plans to replace the existing road tax system with a variable road charging scheme could greatly increase vehicle dealers’ costs, RMI chief executive Matthew Carrington warned after the UK government’s 10 year transport plan was announced in Parliament.

The plan would see road tax possibly phased out in favour of a variable road charging scheme where those driving in the most congested areas could be charged up to £1.40 ($US2.60) a mile. To cut down on unnecessary rush hour travel, motorists would also be charged more for using trunk (i.e. main) roads at peak times.

Carrington said: “[Transport minister] Alistair Darling’s scheme to reduce road congestion by 50% could inadvertently damage the retail motor sector and its service to customers.

“This would affect dealers of all sizes. Those with more than one site could face charges if they moved vehicles between branches. The only alternative would be to move vehicles via transporter, which would be even more expensive.

“Also, any dealer that allows a customer to take a test drive would have to pay.”

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Courtesy car use by customers would need to be monitored, or possibly abandoned entirely, Carrington suggested. “The issue of courtesy cars, already causing headaches due to the new FSA rules [affecting insurance] could become even more problematic.

“At present there is no restriction on mileage for customers using courtesy cars. But under a road charging scheme, dealers would need to establish a method to make their customers pay for any charges incurred. Given the opportunity for conflict with customers that this could cause, many dealers might feel it would be simpler to no longer offer this service.”

Carrington said the current suggestions show that the possible impact on the retail motor trade has yet to be considered. His organisation plans to continue lobbying the over the controversial issue.

In contrast to the RMI which represents car dealers, the Society of Motor Manufacturers and Traders (SMMT), representing new vehicle makers and importers, welcomed publication of the Department for Transport’s road pricing feasibility study but is concerned over some of its findings.

The DfT has suggested that road pricing could cost as much as £3 billion a year to implement, with essential on-board vehicle technology representing the biggest cost. A pan-European consensus on the technology to be used is key to the scheme’s success. However, while existing satellite navigation systems can pinpoint the location of a vehicle, significant investment will be necessary to develop a ‘box’ that can also measure other factors such as time and distance travelled.

The study suggests that nationwide road charging is at least a decade away, the SMMT said. In the interim it will continue to press that investment in the UK’s transport infrastructure – including new roads – must continue as planned and not be allowed to take a back seat.

SMMT chief executive Christopher Macgowan, a member of the steering group for the study, said: ‘Road charging may well have a role in managing demand on the UK’s congested road network but it must not lead to an increase in tax take from the motorist.

“The objective for the motor industry and government alike must be a modern and efficient transport system that supports vehicle production, aids economic growth and respects the environment. This requires sustained levels of new government investment in the short and medium term based on targets that are clearly set and reviewed regularly.”

The SMMT believes the government faces a significant challenge to win the trust of Britain’s already heavily taxed road users and will only succeed if it delivers on its immediate plans for improved road and rail infrastructure.

The introduction of local congestion charging schemes, described as ‘pathfinders’, also needs to be treated with care, the SMMT added. Timing and costs should be  co-ordinated if motorists are to accept the long-term benefits of road charging as a concept and not be confused by a host of systems, operating at different times and with different cost structures across the country.