Rachel Reeves is poised to break ANOTHER promise as she ‘plots £300-a-year charge for electric car drivers’ in desperate Budget despite warnings it will be ‘poll tax on wheels’
Amidst claims that the budget will introduce ‘road pricing’ for electric car drivers, Rachel Reeves is preparing to fulfill another promise.
Chancellor may make a statement A 3p per mile tax on electric vehicles, in addition to other road taxes. desperately trying to fill a huge black hole in the public finances..
This could see drivers pay between £250 and £300 annually by 2028, depending on typical usage. Hybrid cars will also face a new but lower price.
As more and more car owners turn green, the Treasury is expected to argue that the new tax is needed to offset falling fuel duty revenue.
But the Conservatives have pointed out that Ms Reeves has publicly ruled out road pricing following the recent tax hike Budget bonanza. And motoring groups have warned it could be a ‘poll tax on wheels’ for Labor.
It is estimated that up to six million additional electric vehicles will be on the road by the time the plan comes into effect.
Amid claims that the budget will introduce ‘road pricing’ for electric car drivers, Rachel Reeves is preparing to fulfill another promise
Rachel Reeves is expected to announce that electric vehicles will be charged 3p per mile in addition to other road taxes. Meanwhile, hybrid cars will also face a new but lower price.
Ms Reeves may also argue the move would be fairer as petrol drivers currently pay an average of £600 a year in fuel duty.
This will help the Treasury raise an estimated £1.8bn by 2031, helping to close the fiscal gap caused by the green switch due to the loss of revenue from petrol cars.
The pay-per-mile road taxation system has been debated by governments and industry experts for years.
But until now it was considered too politically toxic.
At a Treasury Select Committee hearing last November, Tory MP Harriett Baldwin asked Ms Reeves ‘whether she plans to go beyond fuel duty and introduce a road pricing system during this Parliament’.
He replied: ‘We don’t look at road pricing.’
AA chief executive Edmund King said: ‘Whilst we accept that the Treasury is losing fuel duty revenue as motorists switch to electric, the Government needs to tread carefully unless its actions slow the switch to electric vehicles.
‘Zev’s instruction that 28 percent of new car sales this year should be zero-emission will not be met as sales are only realized at 22 percent.
‘We need to see the details of this proposal to determine whether these new taxes would be fair or a stray tax.’
The so-called poll tax, introduced by Margaret Thatcher’s government in Scotland in 1989 and then by England and Wales the following year, was a fixed payment for all adults, prompting violent protests.
The Daily Telegraph suggested Ms Reeves’ EV plan would involve users predicting how far they will drive over the next 12 months and paying an extra fee on top of vehicle excise duty (VED).
If they drive more they will need to top up this amount, plus if someone drives fewer miles some of the money will be carried over to the next year.
Examples of journeys costing 3p per mile include £12 between London and Edinburgh, £5 between Cambridge and Bristol and £2 between Liverpool and Leeds.
The VED exemption for EVs was removed in April.
A Government spokesman said: ‘Fuel duty covers petrol and diesel but there is no equivalent for electric vehicles.
‘While we support the transition to electric vehicles, we want a fairer system for all drivers; That’s why we’ve invested £4bn in support, including grants that will reduce upfront costs by up to £3,750 per eligible vehicle.
‘Just as it is right to seek a tax system that fairly funds roads, infrastructure and public services, we will look at further support measures to make owning an electric vehicle more convenient and affordable.’
Ginny Buckley, managing director of electric vehicle advice site Electrifying.com, said: ‘This is another example of the mixed messages coming from the Government.
‘Motorists are encouraged to go electric, then threatened with new taxes; You can’t continue the EV transition with one foot on the gas pedal and the other on the brake.
‘This adds extra cost for EV drivers who cannot charge at home and currently pay more per kilometer on public chargers than many petrol drivers.
‘It also penalizes those who switch in good faith based on promised savings.’
