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Kemi Badenoch took aim at the Labour Party over their policy to increase fuel duties earlier. She said:…
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Proposed pay‑per‑mile tax for electric vehicles raises concerns
The Chancellor is expected to outline plans in the upcoming Budget to introduce a mileage‑based tax for electric vehicles (EVs) from 2028. The measure is being considered as fuel duty revenues decline with more drivers moving away from petrol and diesel.
If introduced, EV drivers would pay around 3p per mile, with hybrid vehicles charged at a slightly lower rate. The proposal has not yet been confirmed and would require parliamentary approval before implementation.
Rising costs for electric drivers
Industry figures point out that electric drivers have already faced a series of cost increases in recent years, including higher insurance premiums, the introduction of Vehicle Excise Duty (VED), and rising home charging costs.
Motoring analyst John Wilmot, founder of LeaseLoco, said the proposed tax risks undermining one of the main incentives for switching to electric.
“One of the massive benefits to driving an electric vehicle was that it was far cheaper to run than a petrol or diesel car, but a pay‑per‑mile tax risks eliminating that advantage,” he said.
“It’s almost sending mixed messages. We want people to switch to electric cars but they’re dealing with limited charging infrastructure and other rising costs which can leave them questioning whether it’s even worth it.”
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Explore our in-depth feature on more than 100 possible tax changes and what they could mean for households and businesses across South West Wales.
Net zero implications
Wilmot warned that the proposal could slow progress towards the government’s net zero goals.
“Lower running costs were a huge part of the incentive for going electric. Taking that away risks stalling the momentum we have built by giving people confidence in electric vehicles,” he said.
He added that many drivers are already expressing interest in electric options, but uncertainty over future costs may cause hesitation.
“Drivers want clarity before committing to making the switch to electric and it’s hard to have confidence when the rules and the costs keep changing.”
What it means locally
South Wales has seen a steady rise in EV ownership, supported by council‑backed charging points and private investment. Campaigners say any policy that reduces incentives could affect uptake in the region, where charging infrastructure is still developing.
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My UK Gov petition is finally live!
Raise fuel duty in line with inflation to raise income for critical services
It's crazy that public transport costs have rocketed in recent years, yet the government has sought "popularity" by suppressing motoring costs. Excessive driving is bad for the planet and creates miserable cities. The government is also desperate for revenue so raising fuel duty will kill two birds with one stone. #fuelduty #environment #revenue
Please sign
https://petition.parliament.uk/petitions/736415
In 2000 fuel duty on petrol was 49p/litre. Since then, it has not risen with inflation, and currently sits at 53p/litre. We believe raising the duty to 93p/litre would raise significant revenue for the Treasury.
Successive chancellors have steered clear of increasing taxes for motorists for 15 years, but this should be a no-brainer for cash-strapped Rachel Reeves, says Guardian columnist Larry Elliott
And rail fares are going up by more than inflation again too, also in the context of the bus fare cap rise, while drivers receive another long-standing fuel duty freeze.
So, no effort to remove car dependency and encourage more sustainable transport choices.
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