Fuel duty losses in green transition may mean new taxes, Treasury warns

Department says falling income from levies that brought in 37bn last year could cause significant and permanent fiscal pressure'

New taxes may be needed to replace billions of pounds in lost income from fuel duty on petrol and diesel cars, the Treasury has warned, revealing concerns at the heart of government over risks to the public finances from the green transition.

In documents released on Tuesday by Rishi Sunak's department alongside the government's net zero strategy, No 11 Downing Street said much of the 37bn raised last year from fuel duty and vehicle excise duty (VED) could be lost if drivers make the switch to electric cars, which have a low or zero tax rate to encourage take-up.