With a new government could come a radical change in the way we pay to use to our roads. Pay-per-mile isn’t a new initiative, but until recently it hasn’t seen much traction. That might be about to change.
What exactly is pay-per-mile?
Put simply, instead of a fixed tax fee for your vehicle, based on age, engine size and emissions, pay-per-mile would see you being charged for the mileage you cover on an annual basis. Think pay-as-go but for your road use. The idea behind this scheme is to be more fair and balanced.
For example, you’re a pensioner. You might only drive a few miles a day. Is it “fair” that you should pay the same amount of road tax as someone who travels hundreds of miles a week up and down the motorways? The pensioner isn’t causing the same wear and tear or economical impact as the other driver. Therefore why should they pay the same amount of tax? It’s a valid argument and would potentially benefit people who don’t use their car that often.
However, for those who drive for a living, have long commutes, commercial vehicles, this change could become prohibitively expensive. No rates have yet been released assuming the scheme does go ahead. Regardless, the cost of road transport will increase significantly and as a result so will the cost of goods shipped via that method. This also includes haulage and courier work. If the government does go ahead with pay-per-mile there will need to be concessions put in place for the road transport industry. But where does that leave taxi drivers, salesmen, workers who’s jobs involving racking up the miles on our motorway network? Is pay-per-mile a fair option for them?
Another argument for pay-per-mile is to fill the gap left in taxation by electric vehicles which do not pay road tax or fuel duty. As the adoption of EV’s increases so does the tax deficit. Pay-per-mile could be a solution. That said, the government has announced that as of April 2025 EV’s will start being subject to road tax to the sum of £190 a year. So, do we really need pay-per-mile?
The scheme also raises concerns with regards to privacy. For the system to work every vehicle will have to be tracked. This in itself is likely to be very complicated and expensive to implement. Most modern cars have telematics but it is unlikely manufactures will release this data for the purpose of pay-per-mile. Older cars would need to be retrofitted with tracking systems. The thought of having your every journey tracked and catalogued is worrying and open to exploitation from insurance companies, police and criminals alike.
If the Labour government does decide to implement this scheme it needs to be slowly, methodically and carefully. It needs robust security and data handling and thorough scrutiny from trusted third parties to ensure true fairness and public safety.
