Road Pricing

Lord Young of Cookham Excerpts

Monday 29th April 2024 Lords Chamber

Asked by

[Lord Young of Cookham]

To ask His Majesty’s Government what consideration they have given to replacing excise duty on fuel with road pricing.

[The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)]

My Lords, the Government have no plans to consider road pricing. As set out in the letter to the Transport Select Committee in January 2023, the Government are focusing on delivering their core priorities.

[Lord Young of Cookham (Con)]

My Lords, road pricing clearly touches a raw nerve in the body politic. The OBR has recently said of the Government’s policy on electric vehicles that it is

“rapidly eroding the £39 billion”

a year

“revenues from petrol and diesel”

taxes. That will leave a large hole in the Budget. The Transport Select Committee in the other place, with a government majority, said that work on road pricing should start straightaway. When I was Transport Secretary 30 years ago, I floated the idea, which is now much more feasible because of technological progress. If taxes made through the fuel duty are not replaced with something else, public transport will become much more expensive, undermining a sustainable transport policy. Should the Treasury be quite so hostile?

[Baroness Vere of Norbiton (Con)]

The Treasury sees that there are many options going forward for the fuel duty and many broader motoring taxes—and indeed for all taxes. As we transition to net zero, the Government will need to ensure that the tax system encourages more EV uptake and that revenue from motoring taxes keeps pace while remaining affordable.