Electric car drivers should pay by the mile to help shore up public finances, think-tank claims

Electric car drivers should pay by the mile to help shore up public finances, think-tank claims

  • The Resolution Foundation said electric car drivers should pay a new ‘road duty’
  • The tax would prevent the loss of £28 billion in fuel duty due to uptake of EVs 

Electric car owners should be charged to drive by the mile to plug a growing hole in the public finances, a leading think-tank has claimed.

The Resolution Foundation has called for a new ‘road duty’ which would see electric-only vehicle drivers charged around 6p a mile.

It would aim to prevent a £28billion hole emerging in the public purse due to a fall in fuel duty receipts as drivers move away from traditional vehicles.

Because the road-pricing system would be administered via the GPS systems fitted in new electric cars, extra charges could be added for driving in towns and city centres.

This would help reduce congestion without local authorities having to pay thousands for CCTV cameras to enforce low-traffic zones, the report published yesterday says. 

The Resolution Foundation has called for a new ‘road duty’ that would see electric car drivers charged 6p a mile (File photo: An electric car charging in the London borough of Wandsworth)

The Government takes in around £28billion a year from the fuel duty added to the cost of petrol and diesel at forecourts, which helps pay for schools, hospitals and other public amenities. 

A further £7billion is collected in road tax, from which electric cars are exempt, to help maintain highways. But they will start paying the levy from April 2025.

Jonny Marshall, senior economist at the Resolution Foundation, said: ‘Our tax system needs to keep pace with the electric vehicle transition, in a way that protects low and middle-income households.’

It comes amid warnings e-car drivers risk being left stranded by a growing gap between the number of vehicles on the road and public charge points. 

There is now just one public charge point per 36 cars, with the worst ratio in the north-west of England, where there is one per 85 cars, says the Society of Motor Manufacturers and Trader.

Supermarkets cut rip-off diesel prices by 7p a litre 

Supermarkets have cut the price of diesel by 7p a litre under a threat of legal action by the competitions watchdog.

Motoring groups suggest the stores feared an investigation by the Competition and Markets Authority would find them guilty of ripping off drivers. 

Initial findings by a CMA investigation into prices found they were higher than could be explained by the impact of the Ukraine war.

Since May 15, when the regulator noted a rise in profit margins, the average price of a litre of diesel at supermarkets has fallen by 7.44p – from 151.02p to 143.58p. 

But the RAC said it could be cut by 6p more.

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