From England

Labour must consider ‘pay-per-mile road tax’

Matt Oliver

Mon 8 July 2024

Labour must consider road pricing to prevent a black hole emerging in the public finances, a civil servant has said.

Michael Dnes, head of future roads technology at the Department for Transport, called for ministers to consider a controversial “per-mile” tax on drivers to ensure “electric motorists keep paying their share”.

With the number of electric cars on the road growing, the Treasury is facing a £25bn shortfall – about half the annual defence budget – if it cannot replace revenues from fuel duty.

This is because electric car owners do not need to buy petrol, on which fuel duty is levied.

In a series of social media posts on X, formerly known as Twitter, which have since been deleted, Mr Dnes wrote: “The obvious answer is to find another tax so electric motorists keep paying their share.

“But electric vehicles don’t use special electricity that you can tax. And a purchase or a registration tax won’t restrain gridlock.

“So you need some kind of per-mile cost. And that leads you back to road pricing. The principle is you pay a small fee for every mile you drive. Just like you effectively do through fuel taxes today.

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