Britain should move to a system of road pricing to combat congestion and compensate for the £28bn loss of revenue from fuel duty as the country makes the transition to electric vehicles, the Institute for Fiscal Studies has said. The thinktank said the government’s pledge that the UK would reach zero net emissions by 2050 meant the tax take from petrol and diesel would shrink to nothing over the coming decades and a new way to raise money from drivers was needed. The IFS said decisions by both Labour and Conservative governments not to raise fuel duty in line with inflation meant that duties had fallen from 2.2% to 1.3% of national income since peaking in 1999-2000, costing £19bn a year in lost revenue. It added that the government would lose a further £1bn a year if rumours of a 2p a litre cut in fuel duty in the budget proved to be true. In a report, the IFS said taxes on driving would still be necessary even after the replacement of fossil-fuel powered cars by electric models because the costs of congested roads would remain a factor.
Guardian 4th Oct 2019 read more »