Ignore the howls around pay-per-mile, chancellor. We can’t afford not to tax electric cars
If you want a document to give you sleepless nights, the Office for Budget Responsibility’s biennial Fiscal Risks and Sustainability report is a go-to publication.This is the one that looks to the horizon and covers everything from demographic trends to state pension promises to the climate crisis.The headline finding in this July’s version was a true jaw-dropper.The UK’s public finances are on an unsustainable long-term trajectory because government debt would rise to a remarkable 270% of GDP by the early 2070s – up from almost 100% today – if current policies were left unchanged.The “if nothing changes” qualification is important because some of the risks to the public finances are so blindingly obvious – and have been for ages – that it is astonishing successive governments have ignored them.
One is the certainty that government income from fuel duty will dwindle to next to nothing once we’re all driving electric vehicles.The July document spelled out the arithmetic.From expected revenues of £24.4bn from fuel duty in 2024-25, a halving is projected by the 2030s and receipts will be close to zero by 2050.“This is an average £15.
5bn a year lost in fuel duty receipts, driven by the assumption all new cars and vans will be zero-emission by 2035 and new HGVs [heavy goods vehicles] by 2040,” said the OBR,The sums, to state the obvious, are huge,Indeed, fuel duty alone accounts for three-quarters of the revenues that will be lost to government arising from decarbonising the economy,Something plainly has to change on motoring taxes,And here – finally – is a proposal.
Rachel Reeves is considering using this month’s budget to announce plans for a pay-per-mile tax for electric vehicles from 2028.A charge of 3p a mile for EVs, on top of other road taxes, would offset falling revenue from petrol and diesel cars.Crucially, from a transition perspective, the numbers would still be loaded in favour of EVs.The suggested rate would work out at an average of £250 a year, a lot less than the average £600 that petrol and diesel drivers pay in fuel tax, which can itself be considered a pay-per-mile charge.Enforcement remains an unanswered practical problem if Reeves’s system will rely on EV drivers estimating their mileage themselves.
But the principle is sound: the Treasury cannot afford to let motoring taxes disappear,Naturally, the idea provoked howls from predictable quarters,The Society of Motor Manufacturers and Traders said that at such a pivotal moment in the UK’s transition towards EVs, it would be “the wrong measure”,The car salesmen need to get real,It is their sort of “not the right time” thinking that has made the problem of evaporating fuel duties so urgent.
It would have been better to start reform incrementally half a decade ago, as the Institute for Fiscal Studies was urging at the time,From its 2019 report: “The government needs to rethink how it taxes motoring,It should start now, before the revenue disappears and expectations of low-tax motoring become ingrained,” Quite,The issue has been dodged for too long.
Reeves’s proposal is too blunt to tackle the costs of congestion, the other problem identified by the IFS, but it’s better than letting the pressure on Treasury receipts build and build,If the UK can’t rejig motoring taxes to keep up with changes in technology, it hasn’t a hope of easing bigger headaches in the OBR’s book of scary projections, such as rising pension and healthcare costs,Reeves should implement her pay-per-mile idea,Most EV drivers, one suspects, will see the fairness,
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It was a message of defiance. A show of strength from the justice department. The system may be in crisis but there was leadership at the very top. There was one prisoner who was most definitely not getting an accidental early release. And that was the justice secretary himself
Reform UK suspends another member of Kent county council
Nigel Farage’s Reform UK has suspended another member of its “flagship” county council in Kent as it held its first full meeting since the party’s councillors were thrown into crisis by a leaked meeting revealing bitter internal tensions.The departure of Isabella Kemp, who had also worked as a data protection officer at Reform’s HQ, means the party has lost nine of the 57 councillors elected during the local elections in May.Kemp said she had started the process of taking Reform UK to a tribunal for unfair dismissal. She said she had contacted the conciliation service Acas and the whistleblowing charity Protect.The latest turmoil comes after the Guardian published a recording of an incendiary internal meeting in which the council leader, Linden Kemkaran, told dissenting Reform UK colleagues they had to “fucking suck it up” if they did not like her decisions
Lammy says he was not ‘equipped with the details’ when facing questions on mistaken prisoner release at PMQs – as it happened
David Lammy has recorded a pooled interview about the prisoner release mistakes reveaved after yesterday’s PMQs. There were three main lines in the excerpt available so far.Lammy, the deputy PM and justice secretary, defended his decision to dodge questions at PMQs yesterday about whether there had been another prisoner let out by mistake. The Conservatives have strongly criticised him for this, with Chris Philp, the shadow home secretary, saying that Lammy’s non-answer was “dishonest”, and Robert Jenrick, the shadow justice secretary, saying Lammy’s PMQs performance was “a disgrace” and “a dereliction of duty”. (See 9
Badenoch accused of ‘interfering’ in lobbying scandal linked to Cameron
Lex Greensill has accused Kemi Badenoch of “interfering” in an insolvency case “for political ends” as the last Conservative government sought to protect David Cameron from scrutiny for his involvement in a lobbying scandal.The financier, whose companies paid Cameron millions of pounds, claimed that the current Tory leader used her former ministerial position as business secretary to restructure an inquiry into his activities.Greensill alleged that the move was made to protect Cameron as he was elevated to the House of Lords in November 2023 and brought back into government as the foreign secretary.The allegations were made in a letter sent to the current business secretary, Peter Kyle, as Greensill contests the possibility of being disqualified from company directorships for up to 15 years.Greensill claimed the decision to omit Cameron’s involvement from the Insolvency Services’s inquiries meant the case against him should be dropped because it was “based on allegations that have no merit and little or no evidence”
Labour MPs revive ‘desperately needed’ soft left group to take on Reform
Senior MPs who were the architects of the Labour welfare rebellion are to revive a powerful caucus on the party’s soft left to influence the budget and beyond, in a move likely to further unnerve No 10.The former cabinet minister Louise Haigh and Vicky Foxcroft, a former whip who resigned to vote against welfare cuts, are to take the reins of the Tribune group with the aim of giving an organising voice to their wing of the party.Key figures in the group, which hopes it will attract more than 100 MPs to revitalise the caucus, were major players in Lucy Powell’s successful deputy leadership campaign.They also include the former minister Justin Madders, Sarah Owen, the chair of the women and equalities committee and Debbie Abrahams, the chair of the work and pensions select committee. Two other new MPs will also steward the group – Yuan Yang and Beccy Cooper
Lancashire’s Reform-run council plans to close care homes and day centres
Lancashire’s Reform-run council has been accused of “selling off the family silver” through its plans to save £4m a year by closing five council-run care homes and five day centres and moving residents into the private sector.One of the care home residents, a 92-year-old woman, said she would leave only by “being forcibly removed or in a box”.Another resident’s son, a Reform party member, said any move would “kill” his mother, and he vowed to quit the party if the closures went ahead.Questions are also being asked about a potential conflict of interest involving Reform’s cabinet member for social care in Lancashire, who owns a private care company with his wife.Reform UK took control of Lancashire county council (LCC) from the Conservatives in May, winning 53 of the 84 available seats
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