By GB News (World News) | Created at 2025-03-25 14:14:39 | Updated at 2025-03-26 00:04:36
9 hours ago
Labour has been urged to introduce new pay-per-mile taxes to help plug the £28billion black hole created by more drivers switching to electric vehicles.
The Chartered Institute of Logistics and Transport UK (CILT) has warned that the current annual income from fuel duty has started to decline as more drivers give up their petrol and diesel cars.
This substantial sum, collected at nearly 53p per litre on petrol and diesel, helps fund vital road repairs and improvements across Britain.
But as more drivers switch to electric cars as part of the Zero Emission Vehicle mandate, experts have now called for urgent action to address this impending shortfall before it severely impacts the national infrastructure.
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The Chancellor has been urged to introduce new road pricing to help balance the books
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The new report from CILT has outlined several recommendations to tackle this issue facing the UK transport infrastructure, including introducing pay-per-mile taxes to replace fuel duty.
The report did recommend that any new road charging scheme should be national in scope and allow for local input and flexibility.
It should be designed to incentivise more efficient use of infrastructure, particularly as roads are currently not used to capacity with many single-occupancy vehicles, the organisation detailed.
The Government currently generates billions of pounds annually from fuel duty, with different rates applying to other fuel types, including liquefied petroleum gas charged at 28.88p per kg and natural gas at 22.57p per kg.
Motorists also pay standard rate VAT at 20 per cent on most fuels, including public charging points for electric vehicles.
The transition to electric vehicles threatens to create a significant gap in infrastructure financing if not addressed, the group warned.
Daniel Parker-Klein, Director of Communications and Policy for CILT (UK), said: "It's no secret that fuel duty in this country stands at just over 52p per litre. But as we see a shift towards electric vehicles, this revenue is drying up.
"We at the CILT (UK) believe that through proper consultation and thoughtful design, an approach can be created which motorists will view as reasonable and balanced treating all drivers fairly."
Pay-per-mile car taxes have previously been met with strong criticism from motorists
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"Whilst we face a significant funding gap from declining fuel duty revenues, we now have the chance to develop a fairer, more sophisticated approach to road pricing."
The institute has advised that any new scheme should be implemented through a cross-government approach. This would involve the Chancellor working alongside the Department for Transport, the Department for Energy Security and Net Zero, and the Department for Housing, Communities and Local Government.
An HM Treasury spokesperson said: "We have no plans to introduce road pricing. We are committed to supporting our automotive sector as we transition to electric vehicles in order to meet our legally binding climate targets."
