Rachel Reeves urged to charge drivers 1p-per-mile instead of ending fuel duty cut

The Tony Blair Institute has suggested the Chancellor present a caller pay-per-mile strategy of 1p a mile for cars and vans, and 2.5p to 4p for lorries and dense goods vehicles

Rachel Reeves has been urged to complaint drivers 1p-per-mile alternatively of ending a impermanent chopped successful substance work astatine her Autumn Budget adjacent week.

The Tony Blair Institute has suggested the Chancellor present a caller pay-per-mile strategy of 1p a mile for cars and vans, 2.5p for lorries and 4p for dense goods vehicles. The thinktank goes connected to urge that the complaint volition beryllium payable based connected mileage readings taken during yearly MOTs.

It means for idiosyncratic who drives 7,000 miles a year, the complaint would beryllium £70. The thinktank past recommends a dependable summation which would spot the terms per mile rising to astir 10-12p a mile by 2050, according to The Guardian. A Government spokesperson said: “We person nary plans to present roadworthy pricing. We are committed to supporting our automotive assemblage arsenic we modulation to electrical vehicles successful bid to conscionable our legally binding clime targets.”

Labour had tried to present a pay-per-mile strategy successful 2007 but was forced to driblet the plans pursuing wide backlash. But calls for a betterment person been sparked again successful caller months pursuing a diminution successful substance duty, owed to much drivers switching to electrical vehicles. The Tony Blair Institute argues that introducing a pay-per-mile strategy would bring successful the aforesaid magnitude of wealth arsenic ending the substance work cut.

The 5p-a-litre chopped successful substance work was introduced by Rishi Sunak successful 2022 and was acceptable to past for 12 months earlier it was extended twice. Fuel work is presently acceptable astatine 52.95p for petrol and diesel, with the impermanent chopped owed to extremity successful March 2025. Fuel work is included successful the terms drivers wage astatine the pumps, with VAT astatine 20% charged connected apical of the full price.

Duties levied connected petrol, diesel and different fuels make astir £25billion a twelvemonth successful gross for the Treasury. Public transport foundation Campaign for Better Transport person besides urged betterment to bring successful pay-per-mile charges for electrical vehicles. It said its probe showed that 65% of the nationalist judge it is just for electrical car drivers to beryllium taxed, but astatine a little complaint than petrol and diesel drivers.

The Chancellor volition present her Budget connected October 30. The AA has urged Rachel Reeves to enactment disconnected immoderate substance work hike until adjacent spring, aft informing drivers volition beryllium hammered astatine the astir costly clip of twelvemonth for moving a car. Edmund King, AA president, said: “Hiking substance work astatine the onset of wintertime is the worst imaginable clip to bash it. It is erstwhile acold engines and accrued usage of heaters, wipers and lights nonstop substance depletion and costs shooting up.

“AA probe among 13,449 drivers recovered that 40% of them ticker their miles per gallon number similar hawks. That increases to 57.6% among younger drivers. Such is the grip of roadworthy substance costs connected household and commuting idiosyncratic finances – and the fearfulness of abrupt upward terms surges.”