Motorists To Fund £35bn Tax Shortfall Says Committee

Tue 15th Feb 2022

An influential government think-tank has suggested that motorists must pay-as-they-drive in one of the biggest overhaul of the fuel duty and Vehicle Excise Duty ever suggested.

The Transport Select Committee has said that as more and more drivers switch from petrol and diesel to EVs ahead of the 2030 ban on sales of combustion engines, there is an increasing gap in the taxes being collected. The Committee is suggesting that by 2040 there could be a ‘fiscal black hole’ of £35 billion a year and that a new road tax system is required.

A report from the government funded committee says that EV drivers should still be paying for the roads they drive on, for maintenance, and that modern technology such as telemetry can be a solution. The new system would cost most drivers the same of less than they currenty pay in tax.

“Innovative technology could deliver a national road-pricing scheme which prices up a journey based on the amount of road, and type of vehicle, used," said Huw Merriman MP, chair of the Transport Committee.

"Just like our current motoring taxes but, by using price as a lever, we can offer better prices at less congested times and have technology compare these directly to public transport alternatives.

"By offering choice, we can deliver for the driver and for the environment. Road pricing should not cost motorists more, overall, or undermine progress on active travel."