The Labour Government

The problem for Reeves with fuel duty is cars are more economical these days and we have electric cars. I suspect she’ll be more tempted to look at pay per mile. Given the unfair nature of fuel duty (you pay tax on tax) I’d like to see a much fairer system where we pay a fixed cost to register your car each year (around £500) with a pay per mile on main roads and remove fuel duty entirely. Obviously HGVs and the such would have some other fixed cost and potentially per mile rate to pay.

It’ll be far simpler to implement and far more transparent- I suspect it will make people question if they need to travel far more than the current model as it’s much clearer how much each mile costs.
The problem with that is if you give a toss about net zero (putting aside the madness of it), then that doesn’t encourage more economical engines. I’d be half tempted to buy a 20 year old car with a 6 litre V12 if they came out with a system like that!

I’ve long thought that fuel duty is the best tax overall for the following reasons:

Drive more, use more fuel, pay more. Drive less, pay less
Buy a more economical, more fuel efficient car, use less fuel, pay less
Drive slower, pay less. Thrash the car, pay more etc
Easy to collect, impossible to avoid.

I appreciate people are moving to electric but take up is not where the government would like it, so they could further encourage people by punitive fuel duty rates.

I would not like such a scheme btw, I just suggest that if screwing UK tax payers is your objective, this might be a good way to do it. It also has the advantage that the government can lie about their intentions, passing it off as “sorry, but we’re forced to do this to save the planet - it’s nothing to do with us trying to shaft everyone”.
 
They’d need to use ANPR type cameras like they’ll have on the M6 toll. Will need to put up cameras on all the main roads. You’ll pay more the more you drive but you do that anyway through fuel duty. The problem with the uptake in electric or hybrids is the state lose that fuel duty revenue when they running on battery power. It needs to be fair as always.

You won’t get clocked on minor roads. The risk is it sends traffic off main roads to avoid the per mile charge of course.
At some stage the the government is going to have to replace the vast amount of money it receives from fuel duty, just how they do that whilst encouraging the phasing out of the internal combustion engine is above my pay grade. Unless they put a couple of speed cameras on the Mancunian way :-)
 
The problem with that is if you give a toss about net zero (putting aside the madness of it), then that doesn’t encourage more economical engines. I’d be half tempted to buy a 20 year old car with a 6 litre V12 if they came out with a system like that!

I’ve long thought that fuel duty is the best tax overall for the following reasons:

Drive more, use more fuel, pay more. Drive less, pay less
Buy a more economical, more fuel efficient car, use less fuel, pay less
Drive slower, pay less. Thrash the car, pay more etc
Easy to collect, impossible to avoid.

I appreciate people are moving to electric but take up is not where the government would like it, so they could further encourage people by punitive fuel duty rates.

I would not like such a scheme btw, I just suggest that if screwing UK tax payers is your objective, this might be a good way to do it. It also has the advantage that the government can lie about their intentions, passing it off as “sorry, but we’re forced to do this to save the planet - it’s nothing to do with us trying to shaft everyone”.

Some very fair points. Your Reeves and you see tax revenue from fuel duty declining. What do you do?

You can’t whack up fuel duty as that impacts the poorest most. I’d imagine a large number of business use cars are electric so those who travel a lot would not be paying anything like the wear and tear they put on the roads (given how heavy these electric cars are). Annual car tax based on value at purchase is actually reasonable policy as it means electric cars pay more as they cost more - perhaps getting revenue from the hybrid/EV car owners that way? But then it discourages take up.

So you’re right it’s probably not great policy towards net zero. But I’m struggling to see what levers the government has.
 

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