The Transport Committee publishes a Special Report (see
attachment) comprising an exchange of letters between Committee
Chair and Treasury ministers
regarding its Road Pricing report,
published February 2022.
The report warned the Government it risks losing out on tens of
billions of tax revenue if it does not explore new forms of road
taxation as drivers increasingly opt for electric vehicles which
are not subject to Fuel Duty or, until 2025, Vehicle Excise
Duty.
In an exchange of letters, the Committee Chair expressed disappointment at
the Treasury’s delayed response to the report, in which its main
message was that the Government “does not currently have plans to
consider road pricing”.
The Chair wrote to Chancellor MP on 25 January saying: “It is
discourteous both to my Committee and to the witnesses who freely
gave their time and expertise, both in writing and in person,
that your Department has not meaningfully engaged with the
substance of our report nor responded to the specific conclusions
and recommendations made.”
Treasury Minister replied to the Chair on
13 February, saying: “As set out in the Chancellor’s previous
letter the Government does not currently have plans to consider
road pricing. Given this, the Government does not have further
views on the Committee’s recommendations for the ways in which
road pricing should be considered.”
Last year the Government announced that Vehicle Excise Duty will
be levied on electric vehicles from 2025. However, the Committee
has noted OBR forecasts that this could only raise £1.6 billion a
year by 2027/28.
Transport Committee Chair
said:
“It is disappointing that Treasury Ministers have not followed
usual Parliamentary courtesies by not responding fully to the
important issues flagged in our report. As petrol and diesel cars
reduce in number, so too will the Treasury’s tax revenue. That’s
why we asked the Government to set out a range of options to
replace Fuel Duty and Vehicle Excise Duty.
“In challenging times for the economy it is all the more vital to
get this right, not least because most revenue from motoring
taxes actually funds hospitals, schools, police and everything
else. Only £7 billion of the £35 billion collected is used to
maintain the country’s roads. The Committee recognised that this
is a conversation that needs to start sooner rather than later.
We were not urging the Government to adopt a particular scheme;
we want them to start exploring the options. I hope they will
reconsider and respond meaningfully to our suggestions.”
ENDS
Notes to editor:
· Letters exchanged between
the Committee and the Treasury regarding recommendations made in
the Road Pricing report are included in the Appendix of the
Special Report.
