Recommendation 3

We are concerned that immediate priorities have often outweighed action needed to support long-term environmental objectives. Budgets in 2020 and 2021 froze the rate of fuel duty to help with the cost of living, while recognising that future rates would need to be considered in the context of the UK’s commitment 6 Environmental tax measures to reach net zero emissions by 2050. HM Treasury told us that as net zero is a 30- year programme it needs to consider interventions over a long timeframe and not simply year by year. It also recognises that households and businesses need to understand the overall policy direction and where costs are likely to fall so they can plan accordingly. But HM Treasury has yet to provide a long-term view for taxpayers on the difficult action that will need to be taken to get the UK on the path to net zero. The Institute for Government has called for a tax road map to net zero to provide that long-term view, and the Treasury Select Committee has recommended a wider tax strategy including principles for meeting climate change and other environmental objectives. Recommendation: HM Treasury should consider the pros and cons of publishing a roadmap that signals a clear trajectory to taxpayers for how tax measures will be deployed to contribute net zero. It should write to the Committee to set out its thinking before the next Budget.