The Government has issued an update on its plans for a pay-per-mile car tax, a scheme that would charge drivers a fee for every mile driven in an effort to address a shortfall in finances.
Chancellor Rachel Reeves is facing calls to introduce a pay-per-mile system for UK drivers to prevent a significant loss of revenue from fuel duty.
The Campaign for Better Transport (CBT), a charity advocating for improved public transport, has urged the Government to adopt this approach, stressing public support. The proposal, according to reports in Lancashire Live, suggests that drivers of zero-emission vehicles (ZEVs), such as electric cars, should be charged based on their mileage.
However, in response, a Government spokesperson officially declared: “We have no plans to introduce road pricing. We are committed to supporting our automotive sector as we transition to electric vehicles in order to meet our legally binding climate targets.”
The plan would exempt drivers who purchased a ZEV before the implementation date, encouraging the adoption of electric vehicles. The Treasury currently generates around £25 billion annually from duties on petrol, diesel, and other fuels.
However, this revenue is expected to decline as more drivers switch to ZEVs. Despite this, previous governments have been hesitant to introduce per-mile charges, also known as road pricing, due to concerns about public backlash.
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Silviya Barrett, CBT’s director of policy and campaigns, stated: “ZEV drivers should fairly contribute towards vehicle taxation” and advocated for a “simple charge” based on “regular odometer readings.”
She acknowledged that such a change might be perceived as challenging and face criticism from opposition parties and certain interest groups. Nevertheless, she emphasized that the charity’s research indicated public support for the measure.
Motoring services firm RAC has warned that a “replacement form of taxation needs to be introduced to avoid losing billions”. They have urged for the new system to be “simple and fair to drivers of both conventional and electric vehicles.”
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