The Government has left the door open to a pay-per-mile driving scheme in next week's Budget, after a minister's Commons statement was clarified. Transport minister Heidi Alexander told MPs "there are no proposals to introduce a national pay-per-mile scheme" when questioned about potential impacts on motorists in the upcoming Budget.
However, a source close to the Transport Secretary has since revealed she misspoke and meant to rule out a national road pricing system, which could include tolls and congestion charges.
"This Government is firmly on the side of drivers," Ms Alexander said on Thursday morning, responding to Conservative MP for Bridlington and The Wolds Charlie Dewhirst, who warned that charging motorists based on distance travelled would "disproportionately impact" rural drivers.
Ms Alexander added that the Government was already "pumping £24 billion of capital into motorways and local roads", with repairs to "run-down bridges, decaying flyovers and worn-out tunnels". Vehicle fuel duty, including petrol and diesel, generated nearly £25 billion in the 2024/25 financial year, but the shift towards electric vehicles (EVs) threatens to reduce Treasury revenues.
Earlier this month, The Telegraph reported that Chancellor Rachel Reeves was gearing up to announce a 3p-per-mile charge for electric vehicle (EV) drivers, in addition to other road taxes. This would come into effect from 2028 following a consultation.
It's understood that drivers would be charged based on their estimated travel, with no widespread electronic tracking of their movements.
A Government spokesperson at the time advocated for "a fairer system for all drivers whilst backing the transition to electric vehicles", with buyers being supported by a grant to reduce upfront costs by up to £3,750 per eligible vehicle.
They added: "Just as it is right to seek a tax system that fairly funds roads, infrastructure and public services, we will look at further support measures to make owning electric vehicles more convenient and more affordable."
