Road pricing to replace fuel duty? (Current) PM hints at future tax on motorists

Elle Kiai

22 Sep 2022

Electric car drivers are set to be hit with new taxes as the government seeks to replace the money lost from the zero-rated road fund licence for zero emission vehicles.

The increasing popularity of electric vehicles, together with the impending 2030 ban on the sale of new petrol and diesel cars, has led to questions of how the £30bn raised each year through fuel duty will be replaced. 

(Current) Prime Minister Boris Johnson was challenged on the topic during today’s Liaison Committee meeting, with (then) Chair of the Transport Select Committee (TSC) Huw Merriman (who has since resigned) asking the PM what the government’s plans were to replace fuel duty. 

The TSC is there to scrutinise the Department for Transport and to hold Ministers and Departments to account by investigating matters of public concern. "I think road pricing is something that we will eventually have to consider,” said Johnson. “It is certainly the case that we will need a substitute for fuel duty.” 

Merriman then pushed the point, asking for a final decision: “The Treasury has signed off on this approach and for three months No10 has been told to look at it. Do you not agree that something should be done?”

The PM said they are looking at all fiscal proposals to replace fuel duty, but the details of how this may look are still hazy.

Will road pricing, where drivers pay per mile driven, be a fairer way to tax motorists when electric cars are the new norm? What’s clear is that revenue will need to be raised, but how this will work - and from when - are questions we hope have answers in the near future.

Boris Johnson was asked to clarify the position in the Liaison Committee meeting

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