Chancellor urged to adopt pay-per-mile scheme to offset fuel duty loss
Move to pay-per-mile for ZEVs could address £25bn fuel duty gap
Chancellor Rachel Reeves has been urged to introduce a pay-per-mile scheme for British drivers to address a potential loss in fuel duty revenue. Campaign for Better Transport (CBT), a public transport charity, suggests charging drivers of zero-emission vehicles (ZEVs) based on distance travelled, claiming public support for the idea. The plan exempts those who own ZEVs before its implementation, encouraging a switch to electric vehicles.
Petrol, diesel, and other fuel duties generate approximately £25bn annually for the Treasury. This revenue is expected to decline as more drivers transition to ZEVs. Previous governments found road pricing politically challenging.
Silviya Barrett, CBT’s director of policy and campaigns, highlighted the imminent financial shortfall the Chancellor faces. She stressed the need for immediate action, suggesting a fair approach with potential public backing. Barrett emphasised that while driving a ZEV should be cheaper than a polluting vehicle, ZEV drivers should still contribute via a pay-as-you-drive model.
Chancellor urged to impose pay-per-mile scheme on UK drivershttps://t.co/XkYyyiNq8j
Is this another control measure being considered by the government 🤔. They don't want anyone to have freedom!!
— KRC (@CurnainC) September 3, 2024
Barrett communicated these points in a letter to Ms Reeves, advocating for a straightforward charge based on regular odometer readings. She acknowledged potential opposition but cited research indicating public support for the initiative.
Labour has pledged to reverse the decision by former Prime Minister Rishi Sunak to delay the ban on new conventionally fuelled car sales from 2030 to 2035. Ms Reeves will present her first budget on 30 October.
Frequently Asked Questions
Here are some common questions asked about this news
What is the proposed pay-per-mile scheme for British drivers?
It’s a plan to charge drivers of zero-emission vehicles based on how far they travel.
Why is the pay-per-mile scheme being proposed?
To avoid a revenue loss from declining fuel duty as more drivers switch to electric vehicles.
Will current zero-emission vehicle owners be affected by the new charges?
No, drivers with a ZEV before the implementation date would be exempt.
How much revenue does fuel duty generate for the Treasury annually?
Fuel duties generate around £25bn a year.
What did CBT’s Silviya Barrett say about the public’s view on the pay-per-mile scheme?
She claimed that the general public supports the move.
