The Labour government has ruled out amending the current road tax pricing system ahead of the 30 October 2024 Autumn Budget.
The news comes following an 18 September 2024 open letter from Campaign for Better Transport (CBT) to UK transport secretary Rachel Reeves, imploring her to consider changes to the current system.
A government spokesperson said: “We have no plans to introduce road pricing. We are committed to supporting our automotive sector as we transition to electric vehicles in order to meet our legally binding climate targets.”
CBT’s letter called for a system based on price-per-mile in addition to commenting on a range of public transport infrastructure initiatives.
With the increasing number of electric vehicles (EV) on the road, traditional road tax – which depends on the car’s official CO2 emissions and the type of fuel it uses – will return less and less tax as more people switch to EVs.
However, a study from New Automotive warns that pay-per-mile road pricing could stall strong EV take-up in the UK, based on sales figures from Iceland and New Zealand.
This may have influenced the UK government’s decision as its primary focus remains meeting its Net Zero 2040 goals to decarbonise transport, CBT alleges.
The report also calls for light reform to fuel duty to ensure petrol and diesel drivers continue to pay their way.
The analysis suggests that freezing fuel duty has not significantly undermined decarbonisation efforts to date – and that a gradual increase in fuel duty of 2ppl every three years will provide enough revenue to ensure drivers of internal combustion engine vehicles continue to pay their way.
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