Motorists across the UK could soon face a major shake-up to how they pay for driving, as Chancellor Rachel Reeves is reportedly considering a pay-per-mile road charging system. The proposal, being examined by Treasury officials, comes amid growing concern that the government is losing billions in fuel duty as more people switch to electric vehicles (EVs).
Currently, the Treasury collects around £25 billion a year from fuel duty — a vital source of income that’s shrinking fast as drivers go electric. Reeves and her team are said to be exploring a fairer and more sustainable model that would charge drivers per mile travelled, regardless of whether they drive petrol, diesel, or electric cars.
The idea of road pricing isn’t new, but it’s been avoided in the past due to privacy concerns and fears of a public backlash. However, with the shift to EVs accelerating, ministers believe a pay-per-mile scheme could be unavoidable. Early suggestions indicate that tracking could be done through GPS data or automatic number plate recognition (ANPR) technology to measure mileage accurately.
Critics argue the plan could unfairly target rural drivers, who often have no choice but to rely on their vehicles for work and daily life. Others warn it risks becoming yet another stealth tax at a time when motorists are already facing record fuel prices, higher insurance costs, and soaring living expenses.
Supporters, however, believe the change could make the system fairer and greener. They say those who drive more should pay more, while reduced car use would help cut congestion and emissions, aiding the UK’s net-zero climate goals.
Although no final decision has been made, insiders suggest the proposal could feature in the next Budget announcement. If implemented, this would mark one of the biggest transformations in UK motoring taxes for decades, potentially reshaping how Britons pay to use the roads.
One thing’s clear: with millions of drivers already struggling, the idea of Rachel Reeves’ pay-per-mile tax is guaranteed to ignite national debate.
