MPs call to replace £38bn motoring taxes

The Government is being urged to reform motoring taxation or face an "under-resourced and congested future".

MPs on the Transport Committee said green policies could cause revenue from motoring taxes to fall to zero by 2040.

In a report on road pricing, the Committee revealed vehicle excise duty and fuel together raise £35 billion a year and is forecasted to equate to 4% of overall tax receipts in 2021/22.

But with net-zero policies threatening to make the taxes redundant by 2040, the Committee argued revenue must be collected through road pricing.

A road-pricing system would charge drivers according to distance travelled, vehicle type and congestion.

It called for the Treasury and Department for Transport to propose other policy options by the end of 2022.

Philip Booth, senior academic fellow at the Institute of Economic Affairs, said a "scheme to replace all existing fuel and road taxes should be implemented as soon as possible".

He claimed:

"There will be winners and losers, but there will be less congestion and a stronger incentive to use roads when they are not congested.

"In addition, there will be an incentive to invest in the road network - including through the provision of private roads and motorways."

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