Blair think tank calls for new road tax to target electric car drivers

TONY BLAIR’S think tank has said Jeremy Hunt must “urgently” introduce a road tax which would make driving electric cars more expensive.

James Browne, senior policy adviser at the Tony Blair Institute (TBI), called on the Chancellor to introduce a new system of road pricing to stop the country becoming “gridlock Britain”.

Analysts have warned that the Treasury must step in to plug a £25bn black hole in the nation’s finances and stop traffic jams from surging as more motorists shift to electric vehicles.

This will happen because EV drivers do not pay fuel duty. As the Government phases out petrol cars as part of its push to get to net zero carbon emissions by 2050, the Treasury’s tax take from the duty will disappear.

Mr Browne said: “This [road tax] needs to happen urgently, before too many people buy electric vehicles on the basis that they will not be taxed, making it impossible to introduce it later.” A report published by the TBI in 2021 warned that Britain will spend 50pc more time in traffic as driving becomes cheaper.

By the Government’s own estimates, over 50 years, the transition to EVS will cost the economy an extra £52bn because of extra congestion and £5bn because more cars on the roads will mean more road accidents.

While an EV costs around 4p per kilometre to drive, a petrol car costs 10p. That means a 400-mile (644km) drive from London to Edinburgh would cost an EV driver £26 in charging costs, while the driver of a petrol car would pay £64 in fuel.

Mr Browne said: “With fuel duty fading as a source of revenue, the Government needs to plan for moving towards road pricing as soon as possible.” From April 2025, EV owners will start paying some tax in the form of vehicle excise duty (VED).

But the Government has not yet addressed the issue of lost fuel duty. Colin Walker, head of transport at the Energy and Climate Intelligence Unit, said that neither party will touch the issue ahead of the general election.

Mr Walker said: “It would be kind of political suicide really for either party to stick their head out and say we want to talk about road pricing. [But] the longer you leave it, the larger the number who’ve got used to the cheap cost of driving that you potentially p--- off.”

A Treasury spokesman said: “We are making sure that motoring tax revenues keep pace with the switch to electric vehicles, while keeping it affordable for consumers, and have no plans to introduce road pricing. With the electric vehicle transition accelerating, it’s right that all drivers start to make a fair tax contribution through changes to VED while we’re also supporting through over £2.5bn in incentives.”