The Transport Committee has slammed the Treasury for its inertia on tackling road pricing, despite MPs saying last year there was “no viable alternative”.

A report published by the Transport Committee in February 2022 said the UK “faces an under-resourced and congested future unless the Government acts urgently to reform motoring taxation”

A report published by the Select Committee in February 2022 said the UK “faces an under-resourced and congested future unless the Government acts urgently to reform motoring taxation”.

The publication warned the Treasury that it risks losing out on tens of billions of tax revenue if it does not explore new forms of road taxation as drivers increasingly opt for electric vehicles which are not subject to Fuel Duty or, until 2025, Vehicle Excise Duty. And MPs called for the Government to have “an honest conversation with the public” about the future of road pricing.

The committee has now published a Special Report comprising an exchange of letters between Committee Chair Iain Stewart MP and Treasury ministers regarding the report.

In the exchange of letters, Iain Stewart MP expressed disappointment at the Treasury’s delayed response to the report, in which its main message was that the Government “does not currently have plans to consider road pricing”.

The Chair wrote to Chancellor Jeremy Hunt MP on 25 January 2023 saying: “It is discourteous both to my Committee and to the witnesses who freely gave their time and expertise, both in writing and in person, that your Department has not meaningfully engaged with the substance of our report nor responded to the specific conclusions and recommendations made.”

Treasury Minister James Cartlidge MP replied to the Chair on 13 February, saying: “As set out in the Chancellor’s previous letter the Government does not currently have plans to consider road pricing. Given this, the Government does not have further views on the Committee’s recommendations for the ways in which road pricing should be considered.”

The Government announced in the 2023 Autumn Statement that Vehicle Excise Duty will be levied on electric vehicles from 2025 – it’s a move that’s been slammed by many, yet it could only raise £1.6bn a year by 2027/28, as noted by the Transport Committee from OBR forecasts.

Iain Stewart MP added: “It is disappointing that Treasury Ministers have not followed usual Parliamentary courtesies by not responding fully to the important issues flagged in our report. As petrol and diesel cars reduce in number, so too will the Treasury’s tax revenue. That’s why we asked the Government to set out a range of options to replace Fuel Duty and Vehicle Excise Duty.

“In challenging times for the economy, it is all the more vital to get this right, not least because most revenue from motoring taxes actually funds hospitals, schools, police and everything else. Only £7bn of the £35bn collected is used to maintain the country’s roads. The Committee recognised that this is a conversation that needs to start sooner rather than later. We were not urging the Government to adopt a particular scheme; we want them to start exploring the options.

“I hope they will reconsider and respond meaningfully to our suggestions.”