The Death Of Fossil Fuels

[TopBadger]

https://www.theguardian.com/money/2025/ ... ves-budget

This, if true, is hardly likely to help the transition to EV's.

It's crazy enough that my old Euro6 diesel car attracted £100 less in VED each year than my EV - when VED is supposedly structure on polluting costs.

Not scheduled to 2028? Great, another thing Reform can oppose that will be popular with the masses.

[bjn]

https://www.theguardian.com/money/2025/ ... ves-budget

This, if true, is hardly likely to help the transition to EV's.

It's crazy enough that my old Euro6 diesel car attracted £100 less in VED each year than my EV - when VED is supposedly structure on polluting costs.

Not scheduled to 2028? Great, another thing Reform can oppose that will be popular with the masses.

Stupid on so many levels. Reeves might be in a bad place because of a decade and a half of Tory misrule, but she really is a dipshit. Reducing demand for oil improves balance of trade and increase energy security.

Pigovian tax the f.ck out of things you want people to do less of and subsidise the things you want people to do, at least until you get to the point of the bad thing being dead and the good thing being the norm.

[nekomatic]

Yes and no - I think everyone agrees that the revenue shortfall as people switch from ICE cars to electric needs to be met somehow, and much as we need to encourage that switch we also need to encourage switching from driving to public transport and active travel, so that’s really where the subsidies should go if anywhere. Hopefully the secret ingredient will be reinstating the fuel duty escalator so driving ICE remains comfortably more expensive than driving electric…

Storing electricity is like storing any perishable good, is an analogy I haven’t heard before but I like it
https://ember-energy.org/latest-insight ... mechanger/

That’s really good, thanks.

[IvanV]

https://www.theguardian.com/money/2025/ ... ves-budget

This, if true, is hardly likely to help the transition to EV's.

It's crazy enough that my old Euro6 diesel car attracted £100 less in VED each year than my EV - when VED is supposedly structure on polluting costs.

Not scheduled to 2028? Great, another thing Reform can oppose that will be popular with the masses.

Hedgehog in Private Eye (who I don't always agree with*) this issue is on the nose in pointing out that it is very unhelpful to the cities that the government is requiring to clean up their air, that government simultaneously applies policies that have the effect of encouraging SUV ownership and hence increased pollution from ICEs.

The government has had to bring back EV subsidies to keep EV sales growth going, in part because so many of its other policies are unhelpful to it. Though at least it has done that. In Germany, BEV sales fell about 25% in 2024 vs 2023. The UK is now the biggest market in Europe for BEVs, albeit they have a higher market share in a few places like Norway.

But the government, any government, is a bit between a rock and a hard place on this, because of the potential impact of environmental policies on the less well off. Several years ago, I several times asked, in various forums, how was the government to avoid the transition to EVs becoming another engine expanding social inequality. And the best anyone could do was say, "good question". Because they really really didn't like the implications of trying to avoid it.

Clearly we will eventually need to tax EVs rather than subsidise them. But if a per mile charge is to be introduced, it should clearly apply to all cars, not just EVs. But then, how do we avoid that being a tax on the poor, when it is increasingly the poor who are the residual users of fossil fuel cars. Because it is difficult for them to get access to the cheap charging those of us with our own drive and charger can have; and because there isn't the availability of cheap second hand old bangers you can repair yourself (though that's getting harder with even ICE cars becoming laptops on wheels), like in the ICE market.

The installation of chargers, and the price of electricity from them, is left to the market at the moment. But that will inevitably lead to social inequality. We understand that we can't just leave housing to the market when it comes to the less well off. I think we also need to understand that there is a social issue in car charging too, if we are to enforce people to use electric cars. Because plenty of the less well off depend on their cars, and will become unable to drive around in the old bangers they currently satisfy that requirement with. I think there needs to be a degree of regulation of the price of electricity from certain car charges, and some degree of compulsion in installing them, with socialisation of the costs, if this is not to be a source of growing inequality.

---
*And even less often do I agree with Dr B.Ching, but he is on the nose this week with an article on one major reason why doing railway work costs too much.

[dyqik]

Clearly we will eventually need to tax EVs rather than subsidise them.

Or we could just charge income, corporation and sales taxes, plus congestion charges, sufficient to make up for not taxing them.

[Gfamily]

Clearly we will eventually need to tax EVs rather than subsidise them.

Or we could just charge income, corporation and sales taxes, plus congestion charges, sufficient to make up for not taxing them.

There are externalities from the use of motor vehicles wider than those arising from their use of fossil fuels. I think it's reasonable for there to be a 'use' based tax .
Personally, I think it would be an option to introduce a 'per mile' levy on all vehicles. How, exactly, is left as an exercise for the appropriate authorities.

[dyqik]

Clearly we will eventually need to tax EVs rather than subsidise them.

Or we could just charge income, corporation and sales taxes, plus congestion charges, sufficient to make up for not taxing them.

There are externalities from the use of motor vehicles wider than those arising from their use of fossil fuels. I think it's reasonable for there to be a 'use' based tax .
Personally, I think it would be an option to introduce a 'per mile' levy on all vehicles. How, exactly, is left as an exercise for the appropriate authorities.

That's why I included congestion charging in my list. Registration fees are another option for taxing vehicle ownership externalities (as opposed to vehicle use externalities)

With the poor state of public transport across most of the UK, congestion charging linked to public transport availability seems like the fairest option: charging people for driving to where they have other options.

Much use of motor vehicles is driven* by the inability to move closer to work etc., due to the broken housing market. Until that's fixed, per mile charging doesn't seem particularly fair.

[TopBadger]

Clearly we will eventually need to tax EVs rather than subsidise them. But if a per mile charge is to be introduced, it should clearly apply to all cars, not just EVs.

Yup

But then, how do we avoid that being a tax on the poor, when it is increasingly the poor who are the residual users of fossil fuel cars.

You increase the tax free allowance by £250. Offsets the costs for those that drive, puts an extra £250 in the pocket of those that can't afford to drive or don't drive.

[IvanV]

But then, how do we avoid that being a tax on the poor, when it is increasingly the poor who are the residual users of fossil fuel cars.

You increase the tax free allowance by £250. Offsets the costs for those that drive, puts an extra £250 in the pocket of those that can't afford to drive or don't drive.

Unfortunately, it only puts 20% of £250 in their pocket, that being the rate of income tax. I don't think £50 is anywhere near the scale of this.

Feeling lazy, I just asked an AI how much fuel duty and VAT you would pay on fuel for an average car if you drove 7,000 miles in a year, and the answer is about £1400, or about 20p per mile. So if we are trying to tax the usage of cars at that kind of a rate, so that EVs pay the kind of tax that ICE cars currently pay, and then compensate the poor on that scale, we would have to increase the tax free allowance by, say, £7,000. Though there are complications because frequently there are multiple wage earners in a household. So maybe £4,000-£5,000 might do it, in the round. But probably you'd be taking quite a lot of people out of income tax altogether, and so they wouldn't get the full benefit of it.

And of course the comfortably off would also get this benefit too. So you'd have to get it back off them by increasing the rates of taxation higher up the salary scales to recover it from them. Best of luck with that.

My college tutor, the late James Mirrlees, winner of the Nobel Prize for his work on optimal tax theory, often used to say things like this: you should tax externalities like car driving properly, and then adjust for poverty by redistributing through the tax system. But in practice it tends to be tricky to do that. Probably he'd be able to tell you the most suitable way to do that taxation. But, as he'd be first to admit, it's only ever "second best". There is in principle a "first best" tax system, he often referred to, called "lump sum taxation". But only as a thought experiment. Because in effect it requires an omniscient and clairvoyant god to write down in advance the precise amount of tax you need to pay each year.

[Gfamily]

Feeling lazy, I just asked an AI how much fuel duty and VAT you would pay on fuel for an average car if you drove 7,000 miles in a year, and the answer is about £1400, or about 20p per mile.

My (non AI) calculations were different (for 7000miles/year average)
average consumption (petrol) -> 39mpg ==> 180gallons
Fuel cost (@£1.32/litre ==> ~£1100
Of which VAT @20% ==> £188.33
Duty Paid (£2.40/gallon) ==> £432
Total tax ~£620

[IvanV]

Feeling lazy, I just asked an AI how much fuel duty and VAT you would pay on fuel for an average car if you drove 7,000 miles in a year, and the answer is about £1400, or about 20p per mile.

My (non AI) calculations were different (for 7000miles/year average)
average consumption (petrol) -> 39mpg ==> 180gallons
Fuel cost (@£1.32/litre ==> ~£1100
Of which VAT @20% ==> £188.33
Duty Paid (£2.40/gallon) ==> £432
Total tax ~£620

And many thanks for being awake enough to check something I was too lazy to check. More tax than the price of the fuel. Where did it get it so wrong? Stupid me not to do the basic check.

So we are talking like a £2000 increase in the tax free band, which isn't quite as implausible as the £4000-£5000 I mentioned. But as that benefit goes to everyone, we have to take it back with higher taxes further up. And there still maybe issues of not everyone earning enough to get the benefit of the tax adjustment.

[Gfamily]

Feeling lazy, I just asked an AI how much fuel duty and VAT you would pay on fuel for an average car if you drove 7,000 miles in a year, and the answer is about £1400, or about 20p per mile.

My (non AI) calculations were different (for 7000miles/year average)
average consumption (petrol) -> 39mpg ==> 180gallons
Fuel cost (@£1.32/litre ==> ~£1100
Of which VAT @20% ==> £188.33
Duty Paid (£2.40/gallon) ==> £432
Total tax ~£620

I've done an extra step -
A link to a Google Sheets which has costs and levies for ICE (petrol) EVs (charge at home and charge elsewhere) and Petrol Hybrid

https://docs.google.com/spreadsheets/d/ ... sp=sharing

You can play around with the numbers to see what taxes/levies are collected with/without a per/mile levy, and how they compare with the amounts collected for ICEs