Rachel Reeves is poised to break ANOTHER promise as she 'plots £300-a-year charge for electric car drivers' in desperate Budget despite warnings it will be 'poll tax on wheels'
Rachel Reeves is poised to break another promise amid claims the Budget will bring in 'road pricing' for electric car drivers.
The Chancellor could unveil a 3p per mile levy on EVs, on top of other road taxes, as she desperately tries to fill a huge black hole in the public finances.
That could leave drivers paying between £250 and £300 annually by 2028 based on typical use. Hybrid cars would also face a new, but lower, charge.
The Treasury is expected to make the case that the new tax is needed to cover falling fuel duty revenue as more and more vehicle owners go green.
However, the Tories pointed out that Ms Reeves explicitly ruled out road pricing in the wake of her last tax-raising Budget bonanza. And motoring groups warned it could be a 'poll tax on wheels' for Labour.
Up to six million extra EVs are predicted to be on the roads by the time the scheme is up and running.
Rachel Reeves is poised to break another promise amid claims the Budget will bring in 'road pricing' for electric car drivers
Rachel Reeves is expected to announce that EV's will be charged 3p per mile on top of other road taxes. Meanwhile, hybrid cars will also face a new, but lower, charge
Ms Reeves could also argue the move will be fairer as petrol drivers already pay £600 a year on average in fuel duty.
It would help the Treasury raise an estimated £1.8billion by 2031 and help plug a fiscal hole caused by the green transition due to the loss of revenue from petrol cars.
A pay-per-mile road taxation system has been discussed by governments and industry experts for years.
However, up to now it has been regarded as too politically toxic.
Ms Reeves was asked by Tory MP Harriett Baldwin at a Treasury Select Committee hearing last November whether she was 'planning, during this Parliament, to move beyond fuel duty and to introduce a system of road pricing?'
She replied: 'We are not looking at road pricing.'
AA president Edmund King said: 'Whilst we acknowledge the Treasury is losing fuel duty revenue as drivers go electric, the Government has to tread carefully unless their actions slow down the transition to EVs.
'The Zev mandate for 28 per cent of new car sales to be zero emissions this year will not be met as sales are running at just 22 per cent.
'We need to see the detail of this proposal to ascertain whether these new taxes will be equitable or a poll tax on wheels.'
The so-called poll tax – introduced by Margaret Thatcher's government in Scotland in 1989 and then England and Wales the following year – was a fixed payment for all adults, which sparked violent protests.
The Daily Telegraph suggested Ms Reeves's EV scheme will involve users estimating how far they will drive over the following 12 months, and making an extra payment on top of vehicle excise duty (VED).
If they drive more they will need to top up this amount, while some of the money would carry over to the next year if someone clocks up fewer miles.
Journey examples of a 3p per mile fee include £12 between London and Edinburgh, £5 between Cambridge and Bristol, and £2 between Liverpool and Leeds.
The exemption for EVs from VED was removed in April.
A Government spokesman said: 'Fuel duty covers petrol and diesel, but there's no equivalent for electric vehicles.
'We want a fairer system for all drivers whilst backing the transition to electric vehicles, which is why we have invested £4billion in support, including grants to cut upfront costs by up to £3,750 per eligible vehicle.
'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.'
Ginny Buckley, chief executive of EV advice site Electrifying.com, said: 'This is yet another example of mixed messaging from the Government.
'Drivers are being encouraged to go electric, then hit with the threat of new taxes – you can't drive the EV transition with one foot on the accelerator and the other on the brake.
'This adds extra cost for EV drivers who can't charge at home and already pay more per mile on public chargers than many petrol drivers.
'It also penalises those who switched in good faith, based on promised savings.'
