The UK Government is set to lump another bill on the public, as the cost of living soars and Britain sees the biggest fall in living standards since records began.
Motorists are likely to be saddled with having to make up a £35bn tax shortfall, as fuel duty revenue declines with the shift to electric vehicles growing faster, the Commons Transport Committee has said.
At present, the duty makes up around 58p of the price of fuel per liter. But, as more households switch to electric and bio-fuel vehicles, the Government is without one of its main money makers.
MPs reportedly see “no viable alternative” to road pricing and said work on bringing in a new motorist tax should start “immediately”.
The production of new petrol and diesel cars is set to be banned by 2050, which would mean the Treasury loses an estimated combined £35bn in fuel and vehicle excise duty per year.
An introduction of a new duty to make up for a shortfall in tax revenue has caused outrage. It came in the same week it was revealed the Conservative Government wasted almost £10bn on defective and overpriced personal protective equipment
GPS trackers
Under new plans, MPs have said electric cars users should have to pay to maintain the roads, just as petrol and diesel drivers do through fuel duty.
However, the incentive to buy cleaner vehicles must remain, the committee concluded.
The UK is lagging behind many nations in the use of electric vehicles, accounting for just 1.38 percent of cars on the road in 2020. In the Netherlands the number is 4.3 percent, Sweden 4.0 and Norway 22.1.
For the Government to continue to raise funds from British drivers, alternative measures are being discussed.
One of which is a controversial GPS tracking system which would log every journey a motorist makes. the Transportation Committee say the government has just two years to plan for a ‘world leading’ telematic charging system which would be built into the smartphones of drivers.
Described as a ‘dynamic’ system, it would charge road users according to their vehicle and when and where they travel.
The committee recommends the system designed should allow for it to modify driver behavior in the future.
