Source · Select Committees · Public Accounts Committee
Recommendation 14
14
We asked what planning HM Treasury had undertaken to counteract the reduction in revenue from...
Conclusion
We asked what planning HM Treasury had undertaken to counteract the reduction in revenue from taxes on fossil fuels and greenhouse gases. It said that the government did not have a plan, but the reduction in revenue had been flagged and under review for several years, with ministers advised on long-term tax options. HM Treasury also said that the new regulation banning sales of new petrol and diesel cars would not take effect for another nine years in 2030.26
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