The Campaign for Better Transport (CBT) has urged Chancellor Rachel Reeves to introduce a “pay-per-mile” scheme for electric vehicle drivers to avoid a “black hole” in government revenue stemming from lost fuel duty, Sky News reports.
The charity argues that a mileage-based charging system for zero-emission vehicles (ZEVs) would be a fair and popular solution. Drivers with ZEVs before the implementation date would be exempt, encouraging the shift to electric vehicles.
Fuel duties, levied on petrol, diesel, and other fuels, currently generate £25 billion annually for the Treasury. This revenue is expected to decline as more drivers switch to electric vehicles.
Past governments have shied away from implementing road pricing schemes due to political sensitivities. However, the CBT believes the “pay-per-mile” approach would be more palatable to the public.
“The new Chancellor faces a looming black hole,” said Silviya Barrett, CBT director of policy and campaigns. “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.”
Labour has already pledged to reverse the decision made by former Prime Minister Rishi Sunak to delay the ban on the sale of conventionally fueled new cars from 2030 to 2035.
Chancellor Reeves is scheduled to deliver her first budget on October 30.
