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£30bn EV hole

BBC News 18 December 2020 - Electric cars will leave hole in tax revenues, says Treasury?

NEWS HEADLINE: The Treasury has now openly stated that EV’s will have to be taxed to fill a £30 billion hole in their finances.

If you’ve followed my previous blogs on this subject, you’ll know that the revenue last year from Road Tax and Road Fuel Tax was £68 billion. The Treasury’s £30 Billion hole in their revenue is the estimate for next year on the projected sales added to existing EV’s, and will grow year on year.

So to those who thought that by buying an EV they’d get effective free motoring, sorry to disappoint. The article, copied below indicates how the Government may plug that gap, and as previously predicted in my last Blog, it will most likely be by road pricing. The cost will probably be based on the road type and the time that you drive; so main road, rush hour, yikes!…… rural road, middle of day, a bit more reasonable, but still charged. But we will all have to pay. A Tracker will need to be fitted to all new cars in due course and existing cars retro-fitted to facilitate these Tax’s.

The Chancellor needs money, and lots of it to pay for all these COVID costs and motoring has long been regarded as a ‘cash-cow’ for any government, so expect higher costs! One former Chancellor stated that “no government has ever lost an election by putting road fuel tax up!”

The rest of the article about the Treasury needing to recover road Tax costs goes on to state:

BBC News - 18 December 2020 - Taxes must increase or services be cut to compensate for the loss of fuel tax income thanks to the advent of electric cars, the Treasury has admitted. Officials have been long concerned about the future loss of more than £30bn in revenue from drivers.

In a new review the Treasury has acknowledged the problem in a way that will spark a debate about how driving should be taxed in the future. One idea would be to charge motorists for every mile they drive. But the AA says such road pricing will be tough to sell politically. Instead, the motoring organisation is proposing a system of "Road Miles" in which motorists are allowed to drive free of charge for 3,000 miles (4,000 in rural areas) before they start paying.

The Treasury review offers another striking conclusion from a government department traditionally worried about harm to the economy from cleaning up the UK's emissions. The latest message from The Treasury is the opposite - that tackling climate change might even benefit the economy by giving the UK a lead in clean technologies. It says: "Overall, in the context of the rest of the world decarbonising, the net impact of the transition on growth to 2050 is likely to be small compared to total growth over that period. “It could be slightly positive or slightly negative."

The document continues: "Climate change is an existential threat to humanity. Without global action to limit greenhouse gas emissions, the climate will change catastrophically with almost unimaginable consequences for societies across the world."

Environmentalists welcome what they say is a dramatic change in tone from the Treasury, Doug Parr from Greenpeace told BBC News: "Finally the Treasury has admitted that tackling climate change could actually be good for the economy. "For years it's been a total drag on climate policies - it used to get in the way of any good proposals." He said the Treasury should save money by scrapping the £27bn roads programme and the £100bn HS2 rail line - both of which will increase carbon emissions.

But they would say that wouldn’t they!

Article by 'Fuelcard Frank'

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