Treasury ignores MPs over £35bn motoring tax hole

MPs on the Transport Committee have criticised the Treasury’s failure to take up any ideas from its report on the risks of losing £35bn in road and fuel tax revenue

The Transport Committee said it had only received a ‘delayed and brief response’ from the Treasury almost a year after it published the road pricing report in February 2022.

It has since published an exchange of letters between Committee chair Iain Stewart MP and Treasury ministers, about whether the government had any plans to consider road pricing.

In a letter dated 9 January 2023, the Chancellor, Jeremy Hunt, said that the transition to a new road pricing system was underway, and pointed out that ‘from 2025, electric cars, vans and motorcycles will pay vehicle excise duty (VED) in the same way as petrol and diesel vehicles’.

The Road Pricing Report, published last year, warned the government that it risked losing out on tens of billions in tax revenue if it did not explore new forms of road taxation as drivers opt for electric vehicles.

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