No double road tax, urges Logistics UK

As the sales of new petrol and diesel vehicles are phased out in the coming decades, attention has increasingly turned to how roads will be funded in the future. While motorists are currently subject to two principal taxes – Vehicle Excise Duty (VED) and Fuel Duty – as the number of zero-emission vehicles grows, revenue from VED (currently £7 billion a year) and Fuel Duty (currently £28 billion a year) is predicted to fall steeply. As zero tailpipe emission vehicles are currently zero-rated for VED and Fuel Duty is not currently levied on electric vehicles, the Office for Budget Responsibility described the growth in electric vehicle ownership as a “large and predictable tax cut on motoring”.

To tackle the decline in VED, which is allocated to the National Roads Fund, and Fuel Duty, which is disbursed across the whole of state spending, the Transport Committee held two oral sessions on road pricing and received 148 written evidence submissions. The Committee published its report into road pricing last week (4 February 2022).

In response, Michelle Gardner, Head of Public Policy at Logistics UK, said: “As the logistics industry transitions to zero tailpipe emission vehicles at pace, Logistics UK is urging the government to involve the sector as it decides the future of motoring tax; any new charging system, such as road pricing, must be fair, proportionate, and provide businesses with the certainty they need to plan their long-term investments into alternative fuelled vehicles.

“As the Transport Committee identified, road charging must replace rather than add to existing motoring taxes, and be revenue neutral to limit the financial burden placed on logistics businesses, with all investment going back into road maintenance and improvement.” 

*www.logistics.org.uk/road

Published On: 10/02/2022 16:00:37

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