Electric car drivers should pay by the mile to help shore up public finances, think-tank claims
Drivers of electric cars have to pay per kilometer to keep public finances up, claims a think tank
- The Resolution Foundation said drivers of electric cars will have to pay a new ‘road tax’
- The tax would prevent the loss of £28bn in fuel excise duties due to electric car use
Electric car owners should be urged to go by the mile to close a growing gap in public finances, a leading think tank argues.
The Resolution Foundation has called for a new ‘road tax’, which would require drivers of electric vehicles to pay around 6 pence per mile.
It should prevent a £28bn hole in the coffers from a fall in fuel tax revenues as drivers move away from traditional vehicles.
Because road pricing would be managed via the GPS systems in new electric cars, additional costs could be charged for driving in cities and inner cities.
This would help ease congestion without requiring local authorities to pay thousands for CCTV cameras to enforce restricted traffic zones, the report published yesterday said.
The Resolution Foundation has called for a new ‘road tax’ where drivers of electric cars would pay 6p per mile (File photo: An electric car being charged in London’s Wandsworth)
The government receives around £28bn a year from the fuel duty which is added to the cost of petrol and diesel at filling stations, which helps pay for schools, hospitals and other public utilities.
A further £7bn will be collected in road tax, from which electric cars are exempt, to help maintain motorways. But from April 2025 they will pay the levy.
Jonny Marshall, senior economist at the Resolution Foundation, said: “Our tax system needs to keep pace with the transition to electric vehicles, in a way that protects low- and middle-income households.”
It comes amid warnings that e-car drivers are at risk of being stranded by a growing gap between the number of vehicles on the road and public charging points.
There is now just one public charging 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.