There are moments in politics when one watches a policy trundle towards the cliff edge with the grim inevitability of a supermarket trolley on a Cornish headland. You shout. You wave. You point frantically at the drop. And still it rattles on.
Labour’s pay per mile scheme for electric vehicles is one such moment, a policy so heedless of real world evidence that one wonders whether everyone in the Labour Party has now developed an allergy to thinking things through.
Because the evidence is there. Not buried in some obscure academic journal or whispered by a lone think tank Cassandra, but blaring at full volume from the other side of the world. New Zealand tried this. And it went badly wrong.
Let us be absolutely clear about what happened. New Zealand’s electric vehicle market was booming, sales had increased almost ten fold in just a few years. The public was warming to the idea of battery power. Then the government did two things at once, it scrapped purchase subsidies and slapped kilometre based road charges on electric vehicles.
The result was a collapse. Registrations plunged from 19 per cent of new car sales to a pitiful 2 per cent in a matter of months. Even now, after a modest recovery, electric vehicles account for just 4 per cent of sales. That is not a wobble. That is a face plant.
Why did this happen. Because, and this may come as a shock to Labour’s policy unit, people respond to prices. In New Zealand it is now cheaper to drive a petrol car than an electric one. For every 100 kilometres, electric vehicle drivers pay more than their fossil fuelled counterparts. The supposed green option became the irrational one.
And Labour, gazing serenely across the Pacific, has decided this is exactly the road Britain should follow.
From 2028, Labour is saying electric car drivers will be charged 3p per mile, plug in hybrids 1.5p, all while fuel duty continues to rise for everyone else. A glorious dog’s breakfast of overlapping taxes, contradictory signals and political fudge, guaranteed to confuse motorists and dampen confidence just as we are supposed to be accelerating the transition to cleaner transport.
Even the Office for Budget Responsibility, not exactly a hotbed of ideological alarmism, predicts that Labour’s plan will mean 120,000 fewer electric vehicles on Britain’s roads. That is after assuming that expanded subsidies and tax tweaks will somehow magic away most of the damage. As the Social Market Foundation politely puts it, those offsetting numbers look massively inflated. One might be tempted to use a blunter phrase.
Contrast this with Iceland, often cited by Labour supporters as proof that road pricing can work. Yes, it can, if the groundwork is done. Iceland introduced pricing only after electric vehicles were socially normalised, charging infrastructure was widespread and crucially incentives remained generous. Drivers trusted the system because the government had not pulled the rug out from under them.
New Zealand did the opposite. Labour is now flirting with the same mistake.
And all of this is happening against the backdrop of an unavoidable truth, fuel duty is dying. It currently raises 25 billion pounds a year, but receipts are projected to fall by 12 billion pounds over the next decade and vanish almost entirely by 2050. Eventually Britain will have to move to some form of road pricing. That is not the argument.
The argument is about competence.
New Zealand has at least had the courage to announce a clean break, abolishing fuel duty entirely and replacing it with universal road pricing. Labour’s plan, by contrast, is to bolt a pay per mile charge onto electric vehicles alone, while fuel duty rattles on for everyone else. A two tier system. A muddle. A deterrent.
Worst of all, it risks achieving the precise opposite of what Labour claims to want. Slower electric vehicle adoption. Less confidence. Fewer people making the switch. A greener future postponed by years, all because the party could not be bothered to absorb the most basic lesson from overseas.
Policy, like engineering, obeys the laws of reality. Ignore them, and gravity wins. New Zealand has already demonstrated where this road leads. The only remaining mystery is why Labour, presented with a flashing warning sign, has chosen to accelerate straight through it.
Claire Bullivant
