Ministers plan to scrap car tax as sweetener for road tolls

SCOTTISH ministers are planning to scrap car tax and cut fuel duty to sweeten the pill of a new road toll scheme.

In a radical bid to cut congestion on Scottish roads, ministers want the Treasury to hand over control of all motoring taxes to Holyrood.

They would then abolish the £210-a-year cost of vehicle excise duty and also cut fuel tax to lessen the blow of road pricing.

Motorists would pay up to £1.28 a mile to drive on the country's most congested roads.

The plan mirrors outline proposals already being considered in Whitehall, under which a UK-wide road pricing scheme could be in place as early as 2014.

However, the Government is in no doubt as to public feeling on the scheme after last week's extraordinary internet protest, which saw 1.5 million people signing a motion calling for the plans to be scrapped.

Scottish Transport Minister Tavish Scott said last week he wanted things to happen "more quickly" in Scotland, criticising the "glacial" progress of the plans in the UK.

Scott now says that, if in power after the next election, he wants to enter negotiations with Westminster to hand over responsibility for motoring tax to enable the plan to go ahead.

His proposals were received with astonishment in Whitehall last night with one official describing the plan as "bonkers".

There are concerns that a Scottish-only scheme involving a reduced rate of fuel duty would see thousands of English cars and lorries coming over the Border to fill up their tanks.

Officials also warned that any move to repatriate tax powers would cause a major cut in the £30m block grant which the Treasury currently issues to the Scottish Executive.

However, Scott's Liberal Democrat party is now set to go into May's election with a demand that such powers be granted.

He said: "What we want to do is not to increase tax but to have a fair tax for motorists which is about cutting climate change and congestion. That means taking on vehicle excise duties and petrol taxes. The whole basket of current taxes needs to be looked at to change the focus.

"We would abolish vehicle excise duty, which all motorists must pay, with a revenue neutral scheme. It would be based on how, when and where people use their vehicles."

Scott said he still preferred a UK-wide approach but insisted he would not wait for delays in Westminster. He added that after the election he expected there to be a "consensus" in the Scottish parliament to take responsibility for fuel duty and car taxes to Scotland. "I would hope that there would be a good negotiating position [to take to the UK government]," he said.

In a recent government-commissioned report, former British Airways chief Sir Rod Eddington said that the busiest roads should be charged at more than £1 a mile. This figure would drop significantly for rural roads and for non-peak times.

Cars would be monitored either by having a 'black box' installed under the bonnets or via gantry-mounted receivers which would 'spy' on cars as they went past.

Westminster Transport Minister Douglas Alexander has already insisted that doing nothing is not an option, with figures predicting a massive rise in congestion in the future.