MPs said they were disappointed with the Treasury Department’s response to a report outlining the need for new forms of road tax amid rising EV ownership.
The House of Commons Transportation Committee released its report on road prices in February, warning the government it could lose tens of billions of dollars in tax revenue if it doesn’t explore new forms of road taxation as drivers increasingly opt for electric cars.
These vehicles will not be taxed on petrol or road tax until 2025, the government announced last year.
However, the committee noted that Office of Budget Responsibility (OBR) projections show that removing these exemptions will bring in just under £1.6bn a year by 2027/2028.
Instead, it says road taxes and fuel consumption combined will generate nearly £35bn a year, around 4% of total tax revenue in 2021-22. Thus, it argued that a ban on the sale of new gasoline and diesel vehicles from 2030 and other measures to achieve zero emissions by 2050 require new charging mechanisms.
He released a new special report consisting of an exchange of letters between committee chairman Ian Stewart MP and the finance ministers on the road price report.
In it, Mr. Stewart expresses his disappointment at the Treasury Department’s late response to the initial report.
This shows that he wrote to Chancellor Jeremy Hunt on January 25 stating: “This is impolite both to my committee and to the witnesses who have voluntarily donated their time and experience, both in writing and in person, if your department doesn’t.” meaningful contributions with engaging content. our report, nor its specific conclusions and recommendations.”
Chancellor of the Exchequer James Cartlidge, M.P., replied to Mr Stewart on 13 February that the government does not currently plan to consider tolling.
He added: “In light of this, the government has no further opinion on the Committee’s recommendations on how road costs should be accounted for.”
It was a “disappointing” response, MEPs said, saying ministers should have followed standard parliamentary courtesies and fully responded to the important questions raised in the report.
Mr. Stewart said: “As the number of petrol and diesel vehicles decreases, tax revenues to the treasury will decrease. That’s why we asked the government to come up with several options to replace the oil tax and the vehicle tax.
“In difficult economic times, getting this right is all the more important, not least because most of the tax revenue from cars actually funds hospitals, schools, police and everything else.”
“We didn’t push the government to adopt any particular program; We want them to start exploring options. I hope they will consider our proposals and respond meaningfully.
Nearly 17,300 new battery electric vehicles were registered in January, up 6 percent from January 2022.
They now sell diesel vehicles in the UK and dealers sold just 10,399 vehicles in January 2023.
Source: I News
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