The next Government will face three key challenges when it comes to transport policy, according to Norman Baker MP, the Liberal Democrat shadow secretary of state for transport.

They are: the environment, public finance and improving road conditions.

Baker said carbon emissions from transport had risen while the rest of industry was in decline and this had to change.

“We have to marry the cost of an activity with the carbon output of that activity,” he said. “Yet that linkage for transport has not been established. The cost of motoring has fallen 13% while the cost of rail has risen. The more carbon you emit the cheaper it is to travel.”

Baker believes fleets need to be encouraged into lower emission vehicles through a policy of fiscal incentives/disincentives and legislation. “Both will be used – the challenge for the industry is to be ahead of the same and plan for change rather than follow,” he added.

He advocates a showroom tax which is not designed to raise money, recognising that to get buy in from fleets, any policy needs to be fiscally neutral. The cost of running a lower emitting car needs to fall as the cost for high emitting cars rises.

“Road pricing is also going to come as a charge levied per mile driven on trunk roads and motorways based on CO2,” he added. “The civil servants want it – it’s a way to get better use of the road infrastructure.”

Baker urged fleets to get behind their industry bodies and lobby for a road pricing policy that meets their needs, one where any additional pricing strategy is offset by a fall in fuel duty and road find licence.

“It can be made to work fairly for business but only as a national scheme rather than a hotchpotch scheme,” he said. “And it has to result in a reduction in fuel duty and VED – it’s about changing behaviour, not raising money.”