Business leaders say electric car drivers ‘should be paying their way’ with NEW road use tax


Furious business leaders say electric car drivers ‘should be paying their way’ with NEW road use tax to replace fuel duty as petrol cars are axed to meet green targets

  • Move to electric vehicles will create £35bn fuel duty hole in Treasury coffers
  • But Boris Johnson is said to be cool on a new tax to replace it 
  • Road industry figures demanded clarity over plans to allow drivers to plan 


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Electric car owners need to start ‘paying their way’ for using the roads as petrol and diesel cars are phased out to meet green targets, MPs were told today. 

Boris Johnson’s government is currently mulling whether to bring in some sort of new tax that covers electric vehicles, with sales of new internal combustion engine-vehicles due to be banned from 2030. 

The phasing out of petrol and diesel is expected to leave a £35billion hole in the Treasury’s coffers as fuel duty take dwindles. But Boris Johnson is said to be cool on a new tax to replace it.

However MPs on the Commons’ Transport Committee heard today that details were needed on plans for a successor – if there is one – that targets electric car users to avoid hitting sales of electric vehicles and creating an economic ‘shock’ to early adopters.

Toby Poston, director of external affairs at the British Vehicle Renting and Leasing Association (BVRLA), told the committee that a road pricing scheme was pretty much inevitable. 

‘We are moving towards a carbon-free road transport environment. But that is still an environment that needs to be paid for and maintained and has external societal impacts in the way that it is used. So we have to acknowledge that as more people are adopting zero-emission vehicles they should be paying their way,’ he said.


Toby Poston, director of external affairs at the British Vehicle Renting and Leasing Association (BVRLA), told the committee that ‘as more people are adopting zero-emission vehicles they should be paying their way’. But Steve Gooding, director of the RAC Foundation warned that setting the price too high could hit electric car sales

Boris Johnson’s government is currently mulling whether to bring in some sort of new tax that covers electric vehicles, with sales of new internal combustion engine-vehicles due to be banned from 2030.

‘The longer we leave it the more people are going to get used to the idea of having very low cost transport if they are adopting electric vehicles.

‘It is going to become a shock and I think the scale of the change means it is inevitable and we indeed to get on and start working on it very soon.’

The committee is looking at various types of road pricing, from individual toll roads to zonal charging as found in some cities, plus flat rates per mile, geographic or toll-based charging and rates based on how long people are driving for.

Steve Gooding, director of the RAC Foundation, told the MPs: ‘If we were going to go down that path we would say go with the simplest scheme you can, don’t over-complicate it.

‘The dilemma is … if you wish to encourage the rapid take-up of electric and zero tailpipe vehicles as the committee has recommended, you don’t want to be further adding to the cost differential.

‘Because at the moment as you know an electric car is going to cost you more than the petrol equivalent and doing something that tips that differential the wrong way by adding a distance charge could be seen as a disincentive.’ 

Mr Johnson is facing questions over where the money will come from for his Net Zero plans today amid claims Rishi Sunak’s bombshell fears about the public finances were watered down.

Alongside the PM’s strategy for decarbonising Britain by 2050, the Treasury released a stark assessment warning that the government cannot borrow to fund the costs of the transition.

It cautioned that tax rises would be needed to underwrite state investment – and that a way will have to be found to fill the black hole left as £37billion of revenue from fuel duty disappears.

The message contrasted sharply with the PM’s bullish comments that there will be no need for ‘hair shirt’ measures. 

But there are reports it the Treasury assessment was ‘scrubbed’ to remove the most alarming predictions – and originally was even tougher.

Although the government insists that there is no way of predicting the bill for getting to Net Zero, experts have suggested it will be at least a trillion pounds.

That would be far less than the costs of dealing with unmitigated climate change.

However, with the public sector considered likely to foot half that investment it implies an average annual cost of around £15billion – with the rest being picked up by consumers and business. 

The episode is the latest sign of tensions between the Chancellor and Mr Johnson over the government finances, with Mr Sunak increasingly raising concerns about big spending commitments and the country’s vulnerability with a £2.2trillion debt mountain after Covid. 

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