A major transformation is on the horizon as a new pay-per-mile initiative is expected to increase costs for certain motorists in the upcoming weeks.
Announced by Labour Party Chancellor Rachel Reeves during the October Autumn Statement and Budget, this development could result in higher bills for drivers across the nation.
He noted that those who drive extensively might find themselves paying more under the pay-per-mile system compared to the existing Vehicle Excise Duty (VED) structure, while low-mileage drivers may benefit from lower costs.
Next year will see a shift in rules that previously exempted electric vehicle (EV) owners from VED. Consequently, a high-mileage EV driver might face increased expenses compared to what they previously paid to operate their electric car.
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Public Opinion on Road Pricing
An Auto Express survey involving 280 respondents revealed mixed feelings regarding road pricing. Approximately two-fifths of participants expressed support for the new scheme as a solution to government revenue deficits, while others preferred modifying fuel duty or road tax regulations instead.
Criticism from Driving Organizations
The planned pay-per-mile system has drawn sharp criticism from the Alliance of British Drivers, which labeled it “regressive.”
Former Chairman Ian Taylor acknowledged the need for funding adjustments due to the rise of electric vehicles but expressed discomfort with the concept of road pricing.
He remarked to Auto Express that “it’s regressive taxation” and highlighted the high implementation costs associated with constantly monitoring individuals’ movements, which raises privacy concerns.
In a clarifying statement, Simon Williams from the RAC policy team expressed support for transitioning from fuel duty to a pay-per-mile framework.
He indicated that such a move would ensure that the only tax imposed on fuel would be Value Added Tax (VAT), leaving no room for retailers to obscure the costs.