Thread by @timbolord

Ahead of Budget – my piece on why we’re having the wrong debate about fuel duty, and should be worrying more that £30bn of revenue is going to go in the next 15 years. Urgent need to focus on the alternatives, particularly road pricing. (1/) @InstituteGC
institute.global/policy/we-need…

Fuel duty raises about £30 billion a year – and as well documented, hasn’t risen since 2010. Revenues are £10 billion lower, and carbon emissions up to 5% higher, as a result. (2/)

The rise of EVs means that c1/3 of the car fleet could avoid fuel duty by 2030 - meaning we lose £30bn revenue, increase congestion, and target motoring costs on the least able to pay. (3/)

So how to respond? We could follow the approach for cigarettes of increasing duties to compensate for loss of revenue – but that exacerbates inequality, and only defers the problem for a few years. (4/)

We could try to replicate fuel duty by taxing the electricity used to charge them – but that’s technically challenging, and could slow the transition to EVs. (5/)

So we need to have a proper conversation about road pricing – which could solve the problem, but comes with big challenges around complexity, technology and equity. (6/)

Key thing is that we need to treat this transition as something that *will* happen – not something that might happen. EV transition is gathering pace quickly and will increasingly be driven by consumer choice, not gov’t policy. (/ends)