Source · Select Committees · Public Accounts Committee
Recommendation 13
13
The transition to cleaner vehicles in the UK will reduce the demand for petrol and...
Conclusion
The transition to cleaner vehicles in the UK will reduce the demand for petrol and diesel and thus affect the amount of fuel duty raised. In November 2020, government announced its ambition to stop the sale of new cars that are powered solely by petrol or diesel by 2030.24 The government also said that as the UK transitions to electric vehicles the government needed to ensure that revenue from motoring taxes keeps pace with the change, to ensure it could continue to fund public services and infrastructure.25
Government Response
Not Addressed
HM Government
Not Addressed
2.1 The government disagrees with the Committee’s recommendation. 2.2 The government agrees on the need to consider the implications for tax revenue from net zero and the need over time to set out a plan for the replacement of fuel duty revenues but disagrees with the Committee's specific recommendation to set out a timetable before the next Budget, since that would pre-empt policy decisions which are for Ministers to take at the relevant time. 2.3 The interim Net Zero Review report in December 2020 highlighted that structural changes in the economy related to net zero will have fiscal implications. Much of the revenue from fossil fuel-based taxes is likely to be eroded during the transition to a net zero economy, the most significant of which are motoring taxes such as fuel duty. As set out by the Prime Minister in the Ten Point Plan for a Green Industrial Revolution, whilst the UK moves forward with the transition away from petrol and diesel cars and vans, the government will need to ensure that revenue from motoring taxes keeps pace with this change, so that the government