Chancellor urged to impose pay-per-mile scheme on drivers
Chancellor Rachel Reeves is being urged to impose a pay-per-mile scheme on drivers to avoid a “black hole” from lost fuel duty revenue.
Public transport charity Campaign for Better Transport (CBT) issued the plea, claiming it would have public support.
It is proposing that drivers of zero emission vehicles (ZEVs), such as electric cars, should be charged based on how far they travel.
Under the plan, drivers with a ZEV before the implementation date would be exempt, incentivising the switch to electric motoring.
Duties levied on petrol, diesel and other fuels generate around £25 billion a year in revenue for the Treasury.
This figure is expected to dwindle as more drivers transition from traditionally-fuelled cars to ZEVs.
Toxic
But successive governments have found the prospect of introducing per-mile charges – known as road pricing – to be too politically toxic.
CBT director of policy and campaigns Silviya Barrett said: “The new Chancellor faces a looming black hole. She can avoid it, in a way which is fair and which garners broad public support. But she should start now, as this issue will only get more pressing.
“It should be cheaper to drive a zero-emission vehicle than a more polluting vehicle, but it’s only fair that these drivers should pay a share, and a pay-as-you-drive model can achieve this.”
Ms Barrett wrote a letter to Ms Reeves stating that “ZEV drivers should fairly contribute towards vehicle taxation” and calling for a “simple charge” based on “regular odometer readings”.
She added: “We fully appreciate that such a change would be perceived as difficult and criticised by the opposition and by certain representative groups.
“However, our research demonstrated the general public supports such a move.”
CBT leads a forum consisting of 37 transport-related organisations, which it said would all “support a Treasury move on vehicle taxation”.
Fair
One member, motoring services company RAC, said a “replacement form of taxation needs to be introduced to avoid losing billions”.
It called for the new system to be “simple and fair to drivers of both conventional and electric vehicles”.
Another forum member, the Confederation of Passenger Transport, which represents bus and coach operators, said pay-as-you-go vehicle taxation could “help curb congestion”, making public transport “more attractive”.
Labour has committed to reverse then-prime minister Rishi Sunak’s decision in September last year to delay banning the sale of conventionally fuelled new cars from 2030 until 2035.
Ms Reeves will deliver her first budget on October 30.
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All these avenues of revenue seem to be aimed at creating more taxation for ordinary people on the street. Where are the reforms to tackle low taxation returns from millionaires/ billionaires and mega companies? Let’s hope the budget tackles these issues or this Labour government won’t be here in 2029.
The problem with taxing millionaires, billionaires and mega companies is that it would inevitably increase prices in shops etc. These people have the ability to pass increased expenditure on to the customer. The buck always ends with the customer.
Let’s hope cymru won’t be there in 2029.
Up in Millionaire Tesla Town these silent killers operate on the cheap…
Other much bigger and heavier electric 4×4’s plow up the ‘blacktop’ everywhere they go without paying for the damage they do…
Imposing that tax would be the death of the Labour Government.The amount motorists pay in fuel ,road tax , insurance and repair bills fue to poor road maintenance is more than enough already .Where is all the public transport coming from for those living in the rural areas?.
There is no evidence to support the prospect of any decent public transport beyond city limits. It’s all fudge generated by pipe dreamers and downright liars.
So if you live in rural Wales, like Llangors where there is only 1 bus per week on a Thursday on the Brecon to Abergavenny route which bypasses the villages from Bwlch to Talgarth road on other days, a vehicle of some kind becomes essential, whereas in the larger towns bus and train services means you can avoid the ppm charging system. What is the mechanism for fairness there in large tracts of rural Wales devoid of public transport and low EV charging access.
What about tractors that damage the road edges and perhaps making cyclist contribute a little too.
Since wear and tear on the road goes as the cube of the axle weight how much should that be?
I haven’t got a clue but I do know that the roads around where I live are damaged by tractors carting slurry day in and day out and I also know that if the load was transported by lorry the haulier would have higher running costs
There is always a downside to suggestions of amended taxation – so creating a vehicle tax for zero emission tax that taxes by miles travelled is a major DISINCENTIVE for buying an electric car. Whereas the current zero taxation is an INCENTIVE for buying one. A distance based tax won’t take cats off the road, especially when public transport in rural Wales in non-existent. So as a driver of an electric car, make me pay the same as everyone else, then it’s FAIR and EQUITABLE.
How often do you take your cat onto the road ? Does it go by car or catch a bus ?
How many more ways is this ‘so called’ Labour Government going to find to screw money from those with the least? I live inn a remote area a car is my only option, Buses and Trains, now ‘Privatised’ are very expensive. Even a relatively short trip would cost me a weeks Pension to get anywhere, When are they going to stop attacking us? I am overdrawn for the first time in my life and it is going to get worse, I am really worried and now in debt after having a 98% credit rating ALL my life!
What they have proposed would seem to benefit the better off who can afford to replace their vehicle with an EV in advance of the deadline.
So a Government fixated on reducing consumption is being urged to adopt a policy that removes the incentive to buy the smaller vehicle because both a small cheap EV city car and a three tonne SUV EV will pay the same mileage tax ? There should be included a sliding scale of charge based on vehicle weight.
I presume there is or could be a tax at point of purchase. A modest EV carries a non too modest purchase price and that is the major disincentive as far as I’m concerned. I still see company execs changing their EV’s every 2 or 3 years so the green virtues of that kind of behaviour is very suspect. Making cars last longer still produces better lifecycle cost profiles as long as they are properly maintained.
For sure, there are two important issues there. When and how will EVs be taxed fully as at some point they will have to compensate for the lost tax on ICE vehicles as this article highlights. And the issue of service life of an EV is questionable as battery life anxiety might cause even more rapid depreciation than at present. Complexity is another issue and appears to be a marketing plus point as far as manufacturers are concerned. They appear to have forgotten the old engineering saying – K.I.S.S. (Keep it simple stupid). It is noticeable how the average age… Read more »
CBT. There is always someone or a charitable body that knows better than any one else, and they know the general public will throw their support behind it “any proof ” so government you have been told, isn’t it lucky the senedd passed that law recently ” pay per mile” and then made the statement saying they don’t want to use it, lucky Wales.
Let them dare….