An expert has voiced his concerns that Sir Keir Starmer and the Labour Party are up against an “impossible task” with the anticipated pay-per-mile car tax to hit UK roads. Iain Reid, who is the head of editorial at Carwow, highlighted the tough juggling act for officials striving to balance maintaining revenues whilst fostering a switch to electric vehicles (EVs).
He highlighted that while balancing budget needs with the encouragement for drivers to switch to electric vehicles (EVs) is a tricky endeavour, it is essential given the Government’s commitment to cease sales of new petrol and diesel cars by 2030. Until now, owners have enjoyed tax exemptions for EVs, offering an incentive to make the shift, but this may change as the Government looks to plug a purported £22billion hole in public finances.
The proposed mileage charge aims to replace dwindling fuel duty and vehicle excise duty revenues, but introducing fees for electric cars carries the risk of derailing the progress towards greater EV adoption. Mr Reid commented: “Because the Government has committed to reintroduce the ban on selling new petrol and diesel cars in 2030, it needs to incentivise consumers to make the switch to EVs.”, reports the Express.
“Can it increase the tax take from drivers while also supporting the switch to EVs? That sounds like an impossible task.” Moreover, he anticipates that the cost of running EVs will still remain lower than those for petrol or diesel vehicles after any alterations to the tax system.
These discussions follow revelations that former chief of staff to ex-chancellor Jeremy Hunt acknowledged the treasury had been advancing groundwork on a road pricing strategy for UK roads. Speculation is rife about the potential costs of a new pay-per-mile scheme, with some experts suggesting rates could range from 2p to 6p for each mile or kilometre travelled.
One expert even suggested that electric vehicle (EV) drivers might be charged differently than those driving traditional combustion engine cars. This week, Andrew Jervis, ClickMechanic’s founder and CEO, emphasised that any per-mile charge would likely continue to be emissions-based for the foreseeable future.
He said: “While the exact details of the mooted pay-per-mile scheme remain unknown, it’s understood that motorists whose vehicles contribute more emissions would pay more and vice versa.” In practice, that means if you drive more often than average and your vehicle emits more emissions than average, you will be hit harder in the pocket.”