Rachel Reeves, the Labour Party’s Shadow Chancellor, is preparing to roll out a new pay-per-mile tax for EV drivers! We expect this announcement to form part of the government’s budget announcement on 26th November. This initiative aims to address the fiscal challenges resulting from a decline in revenue from traditional petrol and diesel vehicles as more drivers transition to greener alternatives.
The suggested levy would penalise electric vehicle drivers, who would be charged 3p per mile. This would leave drivers on average £250 a year worse off. This new scheme is expected to roll out in 2028 after a lengthy consultation process. By that time, it is estimated that up to six million people will be using electric cars or vans in the UK.
The Campaign for Better Transport has advocated for this type of road charging scheme, emphasizing its fairness compared to the existing structure. A spokesperson stated, “Fuel duty covers petrol and diesel, but there’s no equivalent for electric vehicles. We want a fairer system for all drivers.”
In addition to the pay-per-mile tax, Reeves’ budget announcement is expected to include other road taxes, further impacting motorists across the country. Almost half of the British public are considering ‘black box’ car insurance. These alternatives track vehicle miles and may save lower income drivers money as concern over the new per-mile charge increases and costs are being estimated.
We’ve reached out to Treasury for comment on their forthcoming plan, but those comments haven’t been made public yet. The Daily Telegraph was the first to report on Rachel Reeves’ intention to impose this pay-per-mile tax, sparking discussions among policymakers and citizens alike.