EV levy to plug the gap

FIVE-MINUTE GUIDE TO... PAY-PER-MILE FUEL DUTY CHARGE

- By Harvey Jones

GREEN FOR GO: A car charging

LATEST Budget rumours suggest Rachel Reeves may unveil a new pay-per-mile charge that will hit electric vehicle owners with a 3p levy for every mile they drive.

This would be on top of existing costs, adding around £250 a year to the average EV driver's bill.

It’s being pitched as “fairness”, but critics view it as a straight revenue grab that could backfire by deterring millions from switching to cleaner cars.

Fuel duty raises huge sums for the Treasury. Charged at 52.95p per litre on petrol and diesel, it generated around £25billion last year.

Yet receipts are falling as more motorists go electric.

Official forecasts suggest that by 2040 the shift to EVs could blow a £12billion hole in the public finances if nothing replaces fuel duty.

Reeves believes this proposed mileage levy can plug part of the gap, raising an estimated £1.8billion by 2031. Critics aren't convinced.