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The Treasury has very little idea about how it will manage declining fuel duty revenues as people move away from fossil fuels to cleaner alternatives, according to a damning new report from MPs.

The Public Accounts Committee (PAC) said there was a lack of “understanding, leadership and coordination” at both the Treasury and HM Revenue & Customs and both possessed a “limited understanding of the environmental impact” of taxes, such as fuel duty, the landfill tax and the aggregates levy.

The PAC said that in 2019/20, £28bn was raised in fuel duty, but this would steadily decline as people changed to electric vehicles to meet the government’s target to end sales of new petrol and diesel and hybrid alternatives by 2035.

MP Meg Hillier, PAC chair, said: “The economic revolution required to abandon fossil fuels and reach net zero must be the greatest co-ordinated ask, of governments around the globe, in history.

“But the UK government has been blithely issuing ever more ambitious climate targets for years now, with no sign of a roadmap to reach any of them.

“The departments in charge seem stuck in a bygone era, with little sign of the innovative thinking needed to achieve all this.”

In a joint statement, the Treasury and HMRC said the country was leading the world with its climate targets and added: “But this is about policies not just targets, which is why the prime minister has outlined an ambitious 10-point plan to achieve our environmental goals.”