CBT calls for road user charging on zero emission vehicles

Public transport charity, Campaign for Better Transport (CBT) has reignited the road user charging debate in an open letter to Chancellor Rachel Reeves in which it urges her to introduce a pay-per-mile scheme, but only for drivers of zero emission vehicles.

CBT’s argument is based on the widely recognised funding black hole that will arise due to the decline in fuel duty revenues as vehicles transition to electric in the UK. Under current arrangements zero emission vehicles do not contribute to fuel duty, which accounts for about £28 billion annually, or nearly 4% of UK tax receipts. As more drivers switch to EVs this revenue will decline, CBT estimates by around 20% by 2033.

This, it says, would leave a £5 billion black hole if a new solution isn’t introduced and the Chancellor must “reform vehicle taxation or face a massive revenue gap.”

Silviya Barrett of Campaign for Better Transport said, “The new Chancellor faces a looming black hole. She can avoid it, in a way which is fair, and which garners broad public support. But she should start now, as this issue will only get more pressing.”

The easiest immediate solution, the letter says, would be a simple charge levied on zero emission vehicles on a per-mile basis.

“Having an adequate transition period would enable industry to prepare. And exempting existing ZEV drivers would incentivise uptake before the implementation date.

“It should be cheaper to drive a zero-emission vehicle than a more polluting vehicle, but it’s only fair that these drivers should pay a share, and a pay-as-you-drive model can achieve this.”