Hackney Council, led by the Green Party, is proposing that London serve as a pilot area for pay-per-mile road charging, as the government prepares to introduce a national road user levy for electric vehicles in 2028.
The borough's Transport Strategy for 2026 to 2036 states: "The Government is currently intending to introduce a form of national road user charging in 2028 for electric vehicle owners. Hackney will continue to engage in the debate over road user charging and will consider lobbying for the introduction of systems of smart road pricing such as pay-per-mile in London as a pilot scheme or on a national basis."
Conservative criticism
The proposal has drawn immediate criticism from the Conservatives, who describe it as part of a "bonkers war on motorists." Shadow Transport Secretary Richard Holden said: "The Green Party are desperate to work with Labour to turn London into their pay-per-mile guinea pig. These are the politics of the bonkers war on motorists, dreamed up by people who seem to think driving is a luxury."
Mayor of London Sadiq Khan has stated he has no plans for City Hall to introduce pay-per-mile, saying: "As long as I am Mayor, we are not going to have pay-per-mile."
Electric Vehicle Excise Duty details
The new eVED (Electric Vehicle Excise Duty) will apply to 2.3 million fully-electric vehicles in the UK and more than 2.7 million hybrids, including over 190,000 and over 300,000 in London respectively. It could mean the typical electric car driver paying around £250-£300 more a year.
Announced at last year's Budget by then Chancellor Rachel Reeves, the eVED starts in April 2028. It aims to compensate for electric vehicle drivers not paying fuel duty at the pump, while contributing to congestion and wear and tear on roads. Even with eVED, most electric car users are expected to pay less road tax and fuel duty than petrol or diesel drivers.
Impact on drivers
Many electric vehicle drivers bought their cars, paying higher upfront costs, on the understanding that they would cost significantly less to run. There are already warnings that eVED could become a "poll tax on wheels," referring to the revolt against the precursor to council tax, which partly led to the downfall of Margaret Thatcher as Prime Minister in 1990.
The eVED will be imposed on top of the current VED, with affected drivers charged 3p per mile for fully electric and hydrogen-powered vehicles, and 1.5p per mile for hybrids. Rates will rise annually with inflation. The new tax is set to raise £1 billion for the Treasury in 2028/29, increasing to £2.3 billion within three years.
Motorists will have to declare estimated annual mileage and current mileage readings when they renew their VED road tax. They will pay an upfront charge based on their estimate or spread payments across the year, with year-end mileage readings triggering a reconciliation of the figures.
The standard VED rate for petrol, diesel and hybrid cars registered on or after 1 April 2017 is £200. Cars with a list price over £40,000 when first sold (or £50,000 if electric) may also be liable for the Expensive Car Supplement, adding £440 to annual VED.
