• The Times has revelead that the government is planning to introduce a pay-per-mile tax scheme to help fill a predicted £40 billion a year shortfall in revenue as drivers switch to electric cars.
  • This has come after Boris Johnson would announce plans for a ‘green industrial revolution’ in October, in an attempt to ‘support 60,000 jobs’ and put the UK on a path to reach carbon neutrality by 2050.
  • This idea, however, is not a new concept, being suggested by the Blair government in 2007.
  • What we must ask is at what cost will this policy, if introduced, detrimentally affect the British people – limiting their privacy and freedom to choose their form of transport.

What is ‘Pay-Per-Mile’?

The Treasury has recently been reported to be exploring methods by which they can replace lost fuel duty and vehicle excise duty (VED), as a shift to electric vehicles increases. Rishi Sunak, Chancellor of the Exchequer, has stated that he is ‘very interested’ in the idea of a road pricing scheme as the government attempts to accelerate plans to ban the sale of new petrol and diesel vehicles over the next decade.

According to the Financial Times, The UK government is set to announce an update on the date of fossil-fuel cars to 2030 – five years earlier than was previously indicated by Transport Secretary Grant Shapps in February. However, the previously indicated 2035 date will be kept in place for an end to the sale of hybrid cars.

This comes after Boris Johnson would announce plans for a ‘green industrial revolution’ in October, in an attempt to ‘support 60,000 jobs’ and put the UK on a path to reach carbon neutrality by 2050. In addition to these promises, the PM would indicate the potential for investment in other ‘green’ areas, including wind and solar energy, and hydrogen and carbon capture storage.

However, a plan for the introduction of a national road pricing scheme – where drivers would pay for each mile driven – rather than the current annual car tax, is not a new concept. In 2007, this idea was explored by Tony Blair’s government, although, after a great deal of backlash from the public, in which nearly 600,000 people signed a petition against this new road pricing scheme, it would falter and quite rapidly exit as a topic for discussion.


Can People Afford To Go Greener?

In March, there were 38.3 million licensed vehicles in Great Britain. As of October, approximately 373,600 plug-in cars and 10,300 plug-in vans have been registered in the UK. Therefore, only 1% (approx.) of all cars registered are powered using electricity.

While ultra low emission vehicles (ULEVs) registered for the first time in Great Britain (March), saw an increase of 113%, making up 5.6% of all new registrations, the question still remains: how possible will it be for the government to fulfil their promise of a ‘green industrial revolution’ by 2030?

Battery Electric Vehicle’s (BEV) have indeed reduced in price over the last decade. In 2010, a 75-kWh battery pack for a Tesla Model 3 would have cost approximately $90,000. Today, the car’s battery now comes in at around $11,700.

However, to say that electric cars are an affordable product for your average citizen is hardly the case. Even if we are to ignore the latest tech in ULEV’s, such as the Tesla Roadster (which will set you back a staggering £189,000), we are still left with cars that would be out of the price range of the majority of UK car-buyers: the Nissan Leaf (£27,000), Renault Zoe (£30,000+) and Volkswagen ID3 (£32,000+), which are considered ‘cheaper options’, are nearly double the price of your average small-sized car (£12,000-£17,000) and rest in-between the middle-high range of medium-sized petrol/diesel cars (£22,000-£36,000).

As Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMTT), has stated:  

Manufacturers are working hard to make zero and ultra-low emission [vehicles] the norm and are committed to working with government to accelerate the shift to net zero – but obstacles remain […] Until these vehicles are as affordable to buy and as easy to own and operate as conventional cars, we risk the UK being in the slow lane, undermining industry investment and holding back progress.

While the price of electric cars will almost certainly reduce over the next ten years, with an expanding second-hand market, it appears as if the government are trying to force this transition,  rather than allowing it to occur naturally, which it almost inevitably will.

Instead, those that cannot afford to transition or who simply do not wish too, will be punished with additional charges, simply for the privilege of being able to travel in their own car. While the government is claiming that the pay-per-mile scheme will replace the current vehicle tax , this will almost certainly only apply to those that have an electric car.

Although some may cry out that a ban on petrol/diesel fuelled cars does not prevent individuals from continuing to drive their already purchased vehicles, this policy will ultimately have repercussions. The production of parts for petrol/diesel cars will lessen, as European countries follow suit, and consequently become more expensive as availability is reduced. People will either be ‘forced’ to buy an electric car, due to the high cost of their repair or left without a vehicle whatsoever.


Track & Trace (Drivers Edition)

However, what is more worrying than increased taxes or the hand of big-government forcing consumers to transition to a particular product, is the way in which they will have to carry out the measures necessary to accurately account for the number of miles driven by the taxpayer.

While we can only speculate how the government plans to accurately calculate a driver’s mileage, it seems highly unlikely that they will rely on the taxpayer to fill in this crucial information in their annual tax return. We are therefore left with a single option: Track and Trace (Drivers Edition).

With the government seemingly wishing to do-away with UK citizens privacy and autonomy – will this be the next step? Could a legally required app to track your geo-location and mileage be on the horizon as we are pushed towards an ever-increasing data-driven society?

Car insurance providers, such as By Miles (established in 2017), will likely provide a model for the UK government to work from. The company has offered its users a fixed annual cost while their car is parked and a ‘unique per-mile rate to cover your driving’. This has managed via a ‘Miles Tracker’ which can be plugged under your car’s dashboard, while their app or online dashboard has been used to automatically see the cost of your journeys.  

This concept may have seemed ludicrous, even just a few years ago, however, as time progresses it appears that we will enter a new society – one dominated by online payments, tracking software, and other forms of data collection.

By Miles Driving Insurance

So What Are The Consequences?

We will have to see how the government progresses with this policy, after all, it may not come to fruition…the events over the last few days could have simply been a form of government-media cooperation, in which this concept has been taughted in order to garner a response and understand how the public might react if this was to become a reality.

However, if the pay-per-mile scheme was to become a blanket policy for all vehicles and all people, then it would likely have a devastating impact upon many facets of life. From the price of produce, to the cost of postage on products from Amazon, paying per-mile will show its ugly head.

With a declining economy, increased unemployment, and people leaving their houses less than ever before, this policy may gain more traction than it did in the past, as people come to view this new tax scheme as a way of cutting down on costs.

However, everything has its price…

We will just have to see how much people value their data and privacy, over the potential for saving a few pennies on a scheme that will almost certainly be more expensive in the long run.