{"id":865,"date":"2025-10-22T16:50:17","date_gmt":"2025-10-22T15:50:17","guid":{"rendered":"https:\/\/www.ecoportal.net\/uk\/?p=865"},"modified":"2025-10-28T13:02:48","modified_gmt":"2025-10-28T13:02:48","slug":"pay-per-mile-debate-hits-london","status":"publish","type":"post","link":"https:\/\/www.ecoportal.net\/uk\/pay-per-mile-debate-hits-london\/865\/","title":{"rendered":"Pay-per-mile debate hits London \u2014 Rachel Reeves\u2019 proposal meets response as Khan unveils new plans"},"content":{"rendered":"

Chancellor of the Exchequer Rachel Reeves is being urged to implement pay-per-mile automobile taxes<\/strong> in the next Autumn Budget to address the Government’s financial shortfall. T<\/span>he analysis, titled \u201cCall of Duties,\u201d examines possible changes that the Chancellor could make in her address to improve the economy and generate revenue.\u00a0<\/span><\/p>\n

A potential solution to the fuel tax shortfall and road pricing for electric vehicles<\/h2>\n

Although they may present an “obvious and significant fiscal risk,” the analysis recommends that new motoring tax measures be implemented as one of the crucial measures. <\/span>It acknowledges that the Government is expected to permit the 5p reduction in the rate of fuel duty to expire in March, which might save the Treasury about \u00a33 billion annually.<\/span><\/p>\n

Experts have consistently pointed out that the funds generated by the sale of petrol and diesel, although fuel tax revenue still makes a significant contribution to the government, are insufficient to cover the cost of maintaining the roads<\/strong>.\u00a0<\/span><\/p>\n

Since more drivers are switching to electric cars, there will be fewer sales of gasoline and diesel, which will necessitate the government finding alternative sources of revenue.\u00a0<\/span>Road pricing, which experts believe may take the place of the levy imposed on drivers, would be one of the most well-liked methods of accomplishing this. A set fee based on the car’s type or the amount of driving done is being considered.<\/span><\/p>\n

Charges may be 6p\/mile excluding VAT<\/h3>\n

The report pointed out that, on average, a typical vehicle pays a fuel tax of about 6 pence plus VAT per mile<\/strong>, but electric vehicles are excluded from this charge.\u00a0<\/span>If electric vehicles weigh an average of about 1,800 kg, it implies that they may be charged six pence per mile without VAT.<\/span><\/p>\n

A light EV weighing 1,000 kg might cost 3 pence per mile to charge, whereas a heavier EV weighing 2,800 kg might cost 9 pence per mile.<\/span><\/p>\n

UK’s proposed pay-per-mile road pricing: What it means for electric vehicle drivers<\/h2>\n

It stated further that “given that EVs can be powered for as little as 2 pence per mile, while a typical weight petrol car might cost 16 pence per mile.” Compared to the current VED system, a new one like that would significantly alter the cost of driving an EV, but it would still be less expensive than the cost of driving a mile.\u00a0<\/span><\/p>\n

The official statement from the London Assembly in 2023<\/a> proposes a weight and distance link to encourage frequent driving, reducing road damage, noise, pollution, and vehicle value. It also suggests measuring driving distances using MOTs, self-reporting, and telematics<\/strong>, potentially reducing undervaluation for cost savings.<\/span><\/p>\n

Think tanks like the Tony Blair Institute for Global Change suggest road pricing could replace fuel duty and motoring taxation, raising \u00a320bn annually for the Treasury. The Resolution Foundation also advocates for a cut to the “pavement tax” to match home charging rates. However, the HM Treasury has no plans to introduce road pricing.<\/span><\/p>\n

The future of road pricing and pay-per-mile in London, according to Sadiq Khan<\/h2>\n

On September 26, 2023, London Mayor Sadiq Khan stated that a pay-per-mile plan would not be put into place in London, stressing that ULEZ emissions standards would continue<\/strong>.<\/p>\n

Through electrifying taxi and bus fleets, investing in zero-emission technologies, encouraging cycling and walking, and enhancing transportation links, Khan emphasised his dedication to making London net zero by 2030. Khan is advocating for greater power and resources for City Hall to promote a green economy and advance environmental objectives<\/a>.<\/p>\n

He has urged Transport for London (TfL) to create a full road user charging system<\/strong> by the end of the decade, and he has also demanded that TfL do the following: consider raising rates and using less polluting vehicles<\/a>. Mayor Khan has said that during his tenure, he would not implement pay-per-mile pricing and that modifications to existing fees, such as the Congestion Charge and ULEZ, may occur in the future.<\/p>\n","protected":false},"excerpt":{"rendered":"

Chancellor of the Exchequer Rachel Reeves is being urged to implement pay-per-mile automobile taxes in the next Autumn Budget to address the Government’s financial shortfall. The analysis, titled \u201cCall of Duties,\u201d examines possible changes that the Chancellor could make in her address to improve the economy and generate revenue.\u00a0 A potential solution to the fuel … Read more<\/a><\/p>\n","protected":false},"author":9,"featured_media":949,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-865","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mobility"],"_links":{"self":[{"href":"https:\/\/www.ecoportal.net\/uk\/wp-json\/wp\/v2\/posts\/865","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ecoportal.net\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ecoportal.net\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ecoportal.net\/uk\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ecoportal.net\/uk\/wp-json\/wp\/v2\/comments?post=865"}],"version-history":[{"count":13,"href":"https:\/\/www.ecoportal.net\/uk\/wp-json\/wp\/v2\/posts\/865\/revisions"}],"predecessor-version":[{"id":968,"href":"https:\/\/www.ecoportal.net\/uk\/wp-json\/wp\/v2\/posts\/865\/revisions\/968"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ecoportal.net\/uk\/wp-json\/wp\/v2\/media\/949"}],"wp:attachment":[{"href":"https:\/\/www.ecoportal.net\/uk\/wp-json\/wp\/v2\/media?parent=865"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ecoportal.net\/uk\/wp-json\/wp\/v2\/categories?post=865"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ecoportal.net\/uk\/wp-json\/wp\/v2\/tags?post=865"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}