Are you ready to pay-per-mile to drive? Who will be the winners and losers of a rumoured new road tax?

Local TV

The Rachel Reeves-led Treasury is reportedly preparing to introduce a “pay-per-mile” charge for electric vehicles — around three pence a mile — from roughly the year 2028, in response to falling fuel-duty revenues. The average driver of an electric car could see an extra two hundred and fifty pounds a year.

Transcript

00:00The shift from petrol and diesel to electric vehicles has created a hole in motoring tax revenues.

00:08Fuel duty currently raises billions each year, but EV drivers do not pay it.

00:14Now the government says a pay-per-mile model may be the answer.

00:19As we move towards a greener economy, and we've heard a lot about that in terms of global warming,

00:24we're going to have to drive electric cars. Why is that?

00:27Well, mainly because, of course, we're going to have to get rid of the internal combustion engines,

00:32which burn petrol and diesel, which are made from fossil fuels.

00:36Now, the corollary of that is that as we buy less and less diesel and petrol,

00:42the government gets less money off the fuel duty as a consequence.

00:47Just to say, at the moment, that's roughly about £24.5 billion a year.

00:51And also, to give you another statistic of the recent sales statistics for cars in this country,

00:57a quarter or sort of electric, so we are buying electric cars in increasing numbers.

01:01The vehicle registration, or sort of the tax that we pay, that will continue.

01:05So that's, if you like, banked. I don't see the government getting rid of that.

01:08But they've got to find some way, if you like, of replacing eventually.

01:11So paying per mile is a very good way of doing so in the sense, of course,

01:15electric cars, by the nature of what they are, they're movable computers or moving computers.

01:19Therefore, they can be tracked.

01:21So it'll be sort of perfectly possible to do all of this,

01:24although I think some sort of investment will have to go into the infrastructure.

01:27According to industry reports, electric vehicle drivers may be charged around three pence per mile

01:34under new plans being finalised by the Treasury.

01:37The proposed change comes as the Office for Budget Responsibility,

01:41and other forecasts suggest a multi-billion pound revenue shortfall

01:46if the current system remains unchanged.

01:48What it will mean, from a very logical consequence,

01:51is that every time we use our car, we'll think more carefully about how much it's going to cost us,

01:56depending upon the cost thereof.

01:59So I suspect there'll be a sort of graduated scheme whereby driving around local roads

02:02will be relatively cheap, but as soon as you go onto the motorways, it'll be far more expensive.

02:07Then, of course, it would perhaps make that sort of the incentive to use public transport all the greater,

02:12whereas at the moment, of course, if you sort of drive long distances,

02:14it's often far cheaper to go in the car than it is on public transport.

02:18So we're into a sort of revolution which is part of, if you like, the greener economy,

02:24but also allied to the fact that technology monitors everything we do, including driving your car.

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