New Labour pay-per-mile car tax system will 'hammer' petrol and diesel drivers

Labour must consider road pricing to prevent a black hole emerging in the public finances, a civil servant has said. Michael Dnes, the head of future roads technology at the Department for Transport called for ministers to consider a controversial “per-mile” tax on drivers to ensure “electric motorists keep paying their share”.

Mr Dnes wrote: “The obvious answer is to find another tax so electric motorists keep paying their share. But electric vehicles don’t use special electricity that you can tax. And a purchase or a registration tax won’t restrain gridlock.

“So you need some kind of per-mile cost. And that leads you back to road pricing. The principle is you pay a small fee for every mile you drive. Just like you effectively do through fuel taxes today. In the fancier versions, you adjust the prices so you pay less on empty roads and more on busy ones.”

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He said: “There’s a perfect ‘window’ for doing this – plenty of EV sales, but not many EVs already on the road. It’s well above my pay-grade. People like me exist to deliver the will of elected governments, not second-guess it.

“The only thing I will say is that the UK will be firmly outside that window by 2029. So, whatever the choice, the new Government will be the one making it.” On Monday, Sir Iain Duncan Smith MP, the former Conservative leader, said: “I can understand the problem posed for tax revenues by electric cars, which pay literally no fuel duty and are heavily subsidised at the moment.

“But I am against any road pricing being introduced. Right now drivers of petrol and diesel cars already get hammered by taxes, whereas electric cars are a huge fillip. It used to be that people could drive into London to go to a restaurant or the theatre.

"But that has become more and more difficult and the costs are now astonishing.”