The UK government's plan to introduce a pay-per-mile road tax has been dealt a significant warning, with experts pointing to a 'disastrous' rollout in New Zealand that has actively discouraged drivers from switching to electric vehicles.
New Zealand's Cautionary Tale on Road Pricing
Gideon Salutin, a researcher at the Social Market Foundation think tank, has issued a stark alert to British MPs. He highlighted that in New Zealand, the implementation of road user charges coincided with a significant fall in EV sales. While the simultaneous end of a generous EV purchase grant played a larger role, the policy created uncertainty and acted as a deterrent.
"Uncertainty over new policies causes a lot of stress for people. It tends to put people off, and that is fair enough," Salutin told The Telegraph. He emphasised that the New Zealand experience "should flash warning signs for policymakers in Britain."
Risk to UK's Electric Vehicle Transition
The core concern is that the proposed system could undermine the economic incentive to choose an electric car. In New Zealand, the policy failure to maintain a clear price advantage for EVs meant it became cheaper to drive a petrol car than an electric one.
Salutin contrasted this with the UK's previous approach, which socialised EVs through reliable charge point networks and maintained a price difference via fuel duty. He warned that the government's projections for offsetting the tax's impact seem "massively inflated," creating real risks.
Instead, he advocates for policies like social leasing, where the government supports low-income families in transitioning to an EV, to genuinely boost adoption rates.
The UK's Road Pricing Rollout Plan
Chancellor Rachel Reeves has confirmed the Labour government will proceed with the rollout of road pricing for electric vehicles from 2028. The initial pay-per-mile rate is expected to be set at 3p per mile.
The long-term vision, mirroring the rationale in New Zealand, is for all vehicles to pay based on actual road use, weight, and distance travelled, irrespective of their fuel type. Chris Bishop, New Zealand's Transport Minister, defended the principle, stating: "It isn’t fair to have Kiwis who drive less and who can’t afford a fuel-efficient car paying more than people who can afford one and drive more often. This change simply has to happen."
However, the critical lesson for the UK is that the design and timing of the scheme are paramount. Without careful calibration to protect incentives for cleaner vehicles, the policy intended to create a fairer system could inadvertently stall the vital transition to electric transport.
