Commons Sense

House of Commons · Westminster Hall

Vehicle Taxation Reform

19 October 2022 · 2 other contributors · 3,370 words

Opened by Wera Hobhouse Lib Dem Bath

Responding minister: Felicity Buchan

TaxationEnergyEnvironment

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Wera Hobhouse raised concerns about vehicle taxation reform in Westminster Hall. A government minister responded.

Key points

  • The current vehicle taxation system is not adequate for the shift towards electric vehicles and the phase-out of polluting vehicles by 2030.
  • The public views fuel duties as unfair, especially impacting low-income households with less efficient older cars.
  • The Government is urged to consider pay-as-you-go or smart road pricing systems to sustainably replace fuel duty revenue.

Key requests to Government

The Government should consider implementing pay-as-you-go or smart road pricing systems to replace declining fuel duty revenue in a sustainable manner. These reforms must be combined with increased investment in public transport infrastructure and environmentally friendly options.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Wera Hobhouse Lib Dem Bath

The current vehicle taxation system is not fit for purpose as electric vehicles are becoming more popular and polluting vehicles will be phased out by 2030. The public believes that fuel duties are unfair, particularly for low-income households with older, less efficient cars. There is a need to reform the vehicle taxation system to ensure fair treatment and sustainability.

Other contributors (2)
  • Huw Merriman

    He congratulated the hon. Lady on securing the debate, highlighting that road pricing could lead to a fiscal black hole with a significant loss in investment not just for roads but also for schools and hospitals due to devolved Mayors creating patchwork road-pricing schemes.

  • Richard Foord Lib Dem Honiton and Sidmouth

    He thanked the hon. Friend for securing this debate, expressing deep concern about fuel prices in rural areas due to limited competition and fewer forecourts, advocating for an expansion of fuel duty relief to reduce costs immediately.

Government Response

Felicity Buchan

It is a pleasure to serve under your chairmanship, Sir George, on my first outing as a Treasury Minister in Westminster Hall. I will begin by congratulating the hon. Member for Bath (Wera Hobhouse) and thanking her for securing this important debate on vehicle taxation... These taxes bring in some £35.5 billion to the Exchequer every year—money that is essential to fund high quality public services. That sum is worth about 4.3% of our total tax take, so it is critical... In considering how to replace those lost tax revenues, the Government will also consider the secondary impacts of existing vehicle taxes, not least in reducing road congestion...

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