The British government is facing a significant financial shortfall due to its push to encourage the adoption of electric vehicles, which do not pay vehicle excise duty or fuel duty. A senior government advisor, Sir John Armitt, has warned that the government will need to find alternative sources of funding to make up for the lost revenue, which could include introducing a system of road pricing.
According to Armitt, the government could either fund roads through general taxation or find a way to tax electric vehicles. One option being considered is a system where drivers are billed per mile for using roads, with the bill being based on the annual mileage recorded during roadworthiness tests. However, Armitt also suggested that the government could go further and introduce a more complex system that tracks drivers’ movements in real-time, allowing for different rates to be charged depending on the time of day, type of road, and location.
The idea of road pricing is not new, and it is already in use in some form in certain parts of the UK, such as London’s congestion charge. However, Armitt acknowledged that it would be a “politically difficult issue” to introduce such a system, which could be seen as intrusive and reminiscent of the “Big Brother is watching you” style of surveillance.
Despite the challenges, Armitt believes that road pricing is inevitable and that it would be no different from paying for other infrastructure services as they are used. He noted that the government stands to lose £30 billion per year in fuel duty revenue as more cars become electric, and that it would need to find a replacement source of funding to make up for the loss.
The government has set a target of banning new internal combustion engine cars by 2035, with the aim of making 100% of cars on British roads electric by 2045. However, this goal is not without its challenges, and Armitt’s comments highlight the potential financial implications of such a policy.
