Currently, vehicle excise duty and fuel duty raise around £35bn a year for the Treasury, but neither tax is levied on pure electric vehicles.
The UK is also set to ban the sale of new petrol and diesel vehicles entirely from 2030 as part of efforts to lower the country’s carbon emissions to net zero by 2050.
The Committee has urged the Treasury and the Department for Transport to start an “honest conversation” about how to maintain investment in roads and public services with the money that comes in from vehicles with internal combustion engines.
In its Road Pricing report, it proposes a system based on miles travelled and vehicle type, which would enable the government to maintain the existing link between motoring taxation and road usage.
It believes this should entirely replace fuel duty and vehicle excise duty rather than being added and would be “revenue neutral” with most motorists paying the same or less than they do currently.
It would also be...