Chancellor Rachel Reeves Urged to Implement 'Pay-Per-Mile' Scheme for Electric Cars

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Chancellor Rachel Reeves is being urged to implement a 'pay-per-mile' scheme for electric vehicle (EV) drivers to address the anticipated loss of fuel duty revenue as more drivers switch to zero-emission vehicles (ZEVs). The Campaign for Better Transport (CBT) proposes that EV drivers should be taxed based on mileage to replace the declining fuel duty, which currently generates £25 billion annually for the Treasury.

As ZEV adoption rises, this revenue is expected to drop significantly. To address this, the CBT suggests exempting existing ZEV owners from the new charges to encourage the transition while ensuring that future drivers contribute fairly.

Silviya Barrett, CBT's Director of Policy and Campaigns, stressed the urgency: "The new Chancellor faces a looming black hole. She can avoid it in a way that is fair and garners broad public support." Although previous governments avoided road pricing due to political sensitivity, Barrett believes public opinion now supports such a move.

With her first budget scheduled for October 30, Chancellor Reeves faces increasing pressure to address this issue and maintain essential revenue streams while supporting the shift to greener transportation. Labour has also committed to reversing a decision to delay the ban on new conventionally fueled cars, emphasizing its commitment to climate goals.