Revenue from fuel duties peaked at 2.2% of national income in 1999–2000 in the UK. However, the duty-levels have since decreased, resulting in a revenue contraction of £19 billion. Prime Minister Boris Johnson is said to be pressing for fuel duties to be cut even further, by 2p per litre in the upcoming Budget. This would cost the excheque another £1 billion a year.
In chapter 9 of A road map for motoring taxing, Stuart Adam and Rebekah Stroud argue that the government should take the opportunity it has now to set out both its long-term strategy for taxing motoring and how it will get there. There is a window of opportunity to do this quickly, they say, before revenue from fuel duties disappears entirely. To read the full chapter, where the authors examine how satisfactorily tax policy treats motoring currently and how it might be made ready for the future, follow the link to the Institute for Fiscal Studies website.
