PRESS RELEASE

Welcome moves to tackle vehicle taxation

Commenting on today’s announcement in the Chancellor’s Budget of a new pay as you drive charge for electric vehicles¹, the freeze on rail fares², the gradual withdrawal of the temporary fuel duty cut³, and an additional £891m for the Lower Thames Crossing⁴, Chris Todd, Director of Transport Action Network said:

“At long last we have a Chancellor brave enough to grasp the thorny issues around vehicle taxation, which too many have ducked before⁵. This is to be applauded.

“The new pay to drive charge on electric and hybrid cars is the right and fair thing to do. Owners of these vehicles need to contribute to maintaining our roads⁶ and cleaning up pollution such as toxic road runoff⁷. At the same time we strongly support the phased withdrawal of the temporary cut to fuel duty. This is important to shift behaviour while providing the funds to enable greater investment in better public transport.

“Alongside these reforms, the freeze in rail fares is welcome, although it’s disappointing that further action hasn’t been taken to make bus services more affordable.

“However, one area the Chancellor is still behind the curve on is her throwing good money after bad at the poor value Lower Thames Crossing. This scheme is the ‘enemy of growth’ as it prevents better value investments in rail projects, such as Ely Junction.”

– ENDS –

Notes for editors

1. From 5.12 of the Budget 2025: The government is introducing Electric Vehicle Excise Duty (eVED), a new mileage charge for electric and plug-in hybrid cars, with effect from April 2028. Drivers will pay for their mileage on a per-mile basis alongside their existing Vehicle Excise Duty. Electric cars will pay half the equivalent fuel duty rate for petrol and diesel cars, and plug-in hybrid cars will pay a reduced rate equivalent to half of the electric car rate. ↩︎
2. First rail freeze in 30 years to ease the cost of living, Government press release, 23 November 2025 ↩︎
3. From 5.2 of Budget 2025: Fuel duty will be frozen for a further 5 months, with the cut being reversed in three stages: 1p on 1 September 2026, 2p on 1 December 2026 and 2p on 1 March 2027. This will return rates to pre-March 2022 levels. The government will then uprate fuel duty rates by Retail Prices Index (RPI) from April 2027. ↩︎
4. The government has pledged a further £891m towards the Lower Thames Crossing (LTC) for 2027-28 and 2028-29 (see 5.6 Budget 2025). It has already pledged £840m since it came to power, with £250m for 2025-26 and £590m for 2026-27. Before that, £1.2bn had been spent on the LTC up to February 2025 (see Table 2.1 in this funding statement submitted to the Secretary of State in February 2025). This means that in total nearly £3bn of public money will have been spent before private finance is found, and judging by these timeframes that could be years away. See TAN briefing for more info on the LTC: The Lower Thames Crossing ‘smart’ motorway is the enemy of growth. ↩︎
5. PwC estimates fuel duty revenue will decline by £9 billion by 2030 and £27 billion by 2040 as a result of the transition to EVs – see press release by Campaign for Better Transport. ↩︎
6. The total backlog in local road and bridge maintenance is around £24bn. It was nearly £17bn in 2025 for the backlog of local roads maintenance and nearly £7bn for local bridge maintenance in 2024. ↩︎
7. Despite the outcry about sewage in our rivers and seas, much less is known about the toxic brew of chemicals washed off our roads and straight into our waterways without any treatment whatsoever. See TAN’s blog about runoff from the Strategic Road Network which highlights some of the issues and how little is being done to tackle this toxic legacy. Electric vehicles are not pollution free and will contribute to this through tyre and road wear and to a lesser extent particulates from braking.
   
   Updated on 26 November 2025 with new information on the Lower Thames Crossing ↩︎