MOTORISTS could be forced to pay a new type of road tax as money from fuel duty dries up, politicians and business leaders have warned.
Due to the switch from fossil fuel cars to electric vehicles the government’s £28bn income stream from fuel sales will reduce to zero in the coming years.
A Treasury report has highlighted this as a key cost of Britain’s Net Zero strategy – new plans to reduce emissions significantly by 2050.
If the government doesn’t replace this income source with increased tax or another type of tax, there will be a 1.5% gap in the UK’s GDP.
Pay as you drive
Road pricing – also known as pay-per-mile – is being heralded as the solution to this issue.
Under this scheme, motorists will no longer pay one annual amount to keep their cars “taxed”.
Instead, they will pay depending on how much they use the road, when they drive, how far they go and the places they visit.
It is also expected to improve traffic, as people will be forced to pay for their journeys.
Toby Poston, corporate affairs director at the British Vehicle Rental and Leasing Association, said that road pricing was an inevitable part of the Net Zero strategy.
He said: “It is imperative that road pricing is considered and trialled now to ensure a smooth transition into a new system.”
“Drivers and fleet operators need clarity on future taxation as they make the transition to zero-emission road transport.”
While road pricing and pay-per-mile taxation has been ignored by politicians as a controversial issue that will lose them votes at elections.
Growing support for new green tax
But a recent study has shown that voters are no longer opposed to the idea, Auto Express reports.
A poll by public policy think tank the Social Market Foundation suggests that 40% of people support road pricing.
Scott Corfe, research director at the Social Market Foundation, said: “For too long politicians have thought of reforming motoring taxes as grasping the nettle, fearful that a backlash from drivers will hit them at the polls.
“In reality, the public want to see a better, fairer system of how the UK taxes drivers.
“Britain needs a system of road taxes fit for the 21st Century and the age of the electric vehicle.
“It is vital that ministers recognise how far public opinion has shifted on road pricing over the last two decades.”
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