TBI Proposes Pay-Per-Mile Road Pricing for EVs
The Tony Blair Institute for Global Change (TBI) has proposed a radical shift in motoring taxes, suggesting a pay-per-mile road pricing model to address funding gaps due to increasing electric vehicle (EV) adoption. The system, outlined in a recent report, aims to create a fairer and more adaptable approach to motoring taxes, aligning with the UK's green transition.
Under the proposed model, drivers would pay an introductory rate of 1p per mile for cars and vans. Heavy goods vehicles (HGVs) would be taxed between 2.5p and 4p per mile, depending on their size. This system could evolve over time, with telematics potentially enabling dynamic pricing based on congestion, peak hours, and geography. This would allow the UK government to set variable pricing to manage demand and optimize road use.
The TBI believes this model could remain revenue-neutral by replacing planned fuel duty hikes. This would ensure EVs contribute proportionally to motoring taxes alongside fuel-powered vehicles. For someone who drives 7,000 miles a year, the charge under the proposed system would be £70. However, Edmund King, president of the AA, has cautioned that road pricing could backfire politically if perceived as a 'tax on wheels', citing the backlash to a similar proposal in 2005.
The nationwide road-pricing system, if implemented, could generate much-needed funding for infrastructure upkeep and address rising congestion, projected to cost the UK economy over £300bn by 2050. In the initial phase, mileage would be tracked during annual MOT tests, with owners of new vehicles not yet due for an MOT able to self-report their mileage. The UK reportedly faces an estimated £30bn loss in revenue due to the shift toward EVs, with fuel duty frozen since 2011. The success of this proposal will depend on public acceptance and the government's ability to manage potential political backlash.
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