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15 Aug 2024

Treasury reportedly ‘piled pressure’ on Tory government to implement road pricing

Former chancellor Jeremy Hunt’s chief of staff, Adam Smith, has reportedly told how staff at the Treasury advised the previous Conservative government to start work on a pay-per-mile road tax.

Mr Smith said Treasury officials warmed to the idea of a pay-per-mile road tax amid concerns that the switch to electric cars will eat into the £25bn a year raised in fuel duty.

As successive UK government’s have supported the transition to electric vehicles (EV), it has become more apparent as owners of EVs do not pay the tax because their cars are powered by electricity, taxes generated by current road tax policies will decrease in value.

This will have a knock-on effect on road maintenance as taxes are directly tied to reinvestment schemes.

The upcoming ban on on the sale of new petrol and diesel-powered cars has catalysed this process, prompting the government’s former staff, reports Mr. Smith, to encourage investigating new tax systems.

Labour has promised to bring forward the ban to 2030, reversing the Conservative’s decision to delay it until 2035.

Former chief of staff for Jeremy Hunt, Alan Smith, said: “The Transport Select Committee had reported in favour of the introduction of a road pricing scheme in February 2022.

“So when I arrived the Government response was about six months late. It wasn’t until I saw the initial draft response that I realised why. It broadly agreed with the recommendation to start preparatory work on a road pricing scheme.”

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