Two Reports on Road Pricing

08 February 2022

Electric Vehicles impact Treasury revenues.

The Transport Select Committee has reviewed the future for the two principal motoring taxes, fuel duty and vehicle excise duty and issued a report on the potential to implement Road Pricing.

The think Tank Policy Exchange has also reviewed road pricing, in particular looking at experience in cities worldwide, and has prepared its own report

Vehicle excise duty and fuel duty raise some £35 billion a year, which comprises approximately 1.5% of UK GDP.  This equates to approximately 4% of overall tax receipts in 2021–22.  The Select Committee that fuel duty is equivalent to approximately five pence on the rate of income tax.

Policies to deliver net zero emissions by 2050 are likely to result in zero revenue for the Government from motoring taxation by 2040.

Motoring taxation also has a role to play in managing congestion by regulating demand to use public roads. If the Government fail radically to reform motoring taxation, the UK faces an under resourced and congested future. Motoring taxes are increasingly duplicated by local schemes that charge motorists for entering congestion zones and clean air zones.

This emerging patchwork of local schemes could make the implementation of a clear a national road pricing scheme very complex.

An issue that is likely to be raised is concerned with personal privacy as vehicles may be tracked on a nationwide basis. 

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