Confusion surrounds the future of road pricing in the UK after a series of conflicting statements from the Labour government. Transport Secretary Heidi Alexander appeared to rule out a national pay-per-mile car tax, only for sources to later suggest she had misspoken.
Government U-Turn on Road Pricing
On Thursday, Transport Secretary Heidi Alexander made a definitive statement, declaring: "There are no proposals to introduce a national pay-per-mile scheme. This Government is firmly on the side of drivers, as I've set out already." This was widely interpreted as a significant u-turn, seemingly shutting down speculation about a new national road pricing system.
However, the clarity was short-lived. Transport sources speaking to the PA news agency subsequently appeared to backtrack on the minister's comments. A source close to the Labour MP for Swindon South claimed that Alexander had "misspoke" and had actually intended to rule out a "national road pricing system", leaving the door open for other forms of pay-per-mile taxation.
Budget Implications and Electric Vehicle Focus
The timing of this confusion is critical, with Chancellor Rachel Reeves expected to address vehicle taxation in the upcoming Budget on November 26. The government is seeking new revenue streams as the shift to electric vehicles (EVs) causes a steep decline in fuel duty income.
A Government spokesperson previously highlighted this fiscal gap, stating: "Fuel duty covers petrol and diesel, but there's no equivalent for electric vehicles." Reports indicate the Chancellor is considering launching new taxes specifically for electric vehicles from 2028.
Industry Backlash and Fragile EV Demand
The prospect of new taxes on electric vehicles has drawn sharp criticism from industry leaders. Lisa Brankin, managing director of Ford UK, issued a stark warning ahead of the Budget. Speaking to the BBC's Big Boss Interview podcast, she argued that introducing such a policy now would risk derailing the transition to cleaner transport.
"It's certainly not the right time to do it," Brankin stated. "That [policy], in the face of really fragile demand for electric vehicles, is just another brake. It's really easy to sell people things they want. It's hard to sell people things they don't want."
Despite the uncertainty, the government has reiterated its commitment to a fairer system for all drivers and its support for the EV transition, pointing to its £4billion investment in grants and infrastructure.
