Miliband Ramps Up The War Against The Motorist
On April 24th, The Telegraph reported Mad Miliband is pressing ahead with plans to make hybrid drivers liable for a new pay-per-mile tax despite admitting they barely use their vehicles in electric mode
The article states:
Plug-in hybrid cars (PHEV) will become liable for Rachel Reeves’s new electric road tax from 2028, with each mile driven attracting a 1.5p fee. It will be half the 3p levy paid by owners of electric vehicles (EVs).
Last year, justifying the policy, the Treasury said PHEV motorists drove “more or less than 50pc in electric mode”. But analysis quietly published by the Department for Transport last week revealed that the Government had overestimated the number of miles plug-in hybrid owners covered with battery power.
“Evidence indicates that PHEVs complete a smaller proportion of their journeys in electric mode than previously assumed,” the document on fuel efficiency read.
Critics said the decision to tax PHEV drivers pay-per-mile and fuel duty felt like “double taxation”.
Despite this, the Government will press ahead with the tax in two years’ time. Known as electric vehicle excise duty (eVED), the tax is being introduced to offset some of the money lost from dwindling fuel duty receipts.
The Office for Budget Responsibility (OBR) estimates pay-per-mile will bring in £7bn for the Treasury come 2050. That is far below the £24bn currently raised each year from fuel duty.
Plug-in hybrids typically have a limited range in their battery pack, so it is common for drivers to ignore the electric capability of their car.
The average range of the electric component of a PHEV is 15 to 60 miles. This is dwarfed by the capabilities of pure electric vehicles, which can achieve in excess of 300 miles on one charge, according to tests run by the consumer group Which?.
The limited battery range of PHEVs means many owners don’t bother charging their car or using the electric function. Yet they will still be charged 1.5p for every mile they drive, in addition to what they already pay in fuel duty, which is equivalent to 6-7p per mile.
PHEV owner Ross Williamson said: “While there is logic in pure EVs having a charge per mile, I struggle with hybrids such as my Land Rover Defender P400 paying a charge on total mileage. It has a maximum electric range of 26 miles.”
Full story here.
There’s a few things to unpack here, notably:
The Office for Budget Responsibility (OBR) estimates pay-per-mile will bring in £7bn for the Treasury come 2050. That is far below the £24bn currently raised each year from fuel duty.
As I warned when the new tax was announced, it would eventually have to at least triple if it was to fully replace the revenue lost from fuel duty.
The Government should really just come clean now and announce a timetable of increasing the tax to, say, 10p/mile.
The second issue is that while hybrids are extremely fuel efficient, they still need fuel. That is why new hybrids are being phased out between 2030 and 2035, as they are incompatible with ‘net zero’.
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