Category: 3. Business

Black Friday bargain-hunters should be wary of the flood of “buy now, pay later” offers at the checkout, money experts have warned, amid record numbers of people seeking help with shopping debts.

Billions of pounds will be spent online and in shops over the coming weeks, with more than one in three Britons said to be planning to use this form of credit to help stagger their Black Friday spending.

But debt organisations and charities say shoppers should think very carefully before succumbing to the temptation of clicking on the buy now, pay later (BNPL) button.

Citizens Advice said it was helping “more people than ever before” with BNPL-related problems. The charity added: “We urge people to take caution, especially if they are struggling with bills already.”

Meanwhile, Money Wellness, an organisation that provides free money and debt advice, said last month had been a record month for people seeking help with BNPL debt, with another spike expected in January and February as festive spending feeds through.

The number of shoppers turning to BNPL has increased steeply in recent years, with banking industry data showing the use of this type of credit rising from 14% to 25% of UK adults in the space of 12 months.

The credit, which is common at online checkouts, and increasingly available at physical shops too, lets people spread payments for everything from dresses and trainers to concert tickets, takeaway pizzas and hotel rooms.

Typically, the cost is split into three or four instalments, and if consumers keep up with their repayment plan they will not usually pay interest or charges. However, regulators and consumer bodies have long voiced worries that some people will end up taking out loans they cannot afford to pay back on time, thereby incurring charges, tipping them into debt and damaging their credit score.

In the UK, more than 3 million customers missed payments in 2024, some of whom will have ended up being pursued by debt collectors.

With the US-inspired Black Friday discount day on 28 November swiftly followed by Cyber Monday on 1 December and then a final burst of festive shopping, this is a bumper time of year for the BNPL industry, which in the UK is dominated by three brands: Klarna, Clearpay and PayPal.

UK consumers will spend £6.4bn on Black Friday purchases this year – up slightly on the £6.3bn spent last year, according to a forecast from the accountancy firm PwC UK.

The average transaction using BNPL is £114, according to the banking body UK Finance, with fashion – clothes, shoes and jewellery – accounting for almost half of all spending using this form of credit last year.

Jane Parsons , at Citizens Advice, said it had shifted from a niche payment option to “a quick solution for people wanting to bag the latest bargains,” but it was still a form of credit, and using it “could still deal a heavy blow to your budget, with little protection if things go wrong”.

While BNPL is often interest-free, “it’s certainly not risk-free”, said Vikki Brownridge at StepChange.

For some shoppers, “juggling multiple BNPL payments alongside rent, bills and other debts can quickly become overwhelming”, said Sebrina McCullough at Money Wellness.

She added: “A major issue is having multiple lines of BNPL credit with different payment dates throughout the month, which makes it hard to budget and easy to lose track. Missed or late payments often come with fees, and debt can spiral before people realise.”

The Financial Conduct Authority will start regulating BNPL on 15 July 2026, which could require lenders to carry out affordability checks on even the smallest loans, so this will be the last Black Friday and Christmas when shoppers will not be protected by consumer legislation. From that date, BNPL loans will become regulated credit agreements.

• Ever wondered if Procter & Gamble stock is a hidden gem or already priced for perfection? Let’s break down whether there’s value hiding beneath the surface for thoughtful investors like you.

• The stock just gained 2.2% in the past week, although it’s still down 0.8% this month and has slipped 9.1% year-to-date, hinting at shifting expectations and perhaps new opportunities or risks.

• Market chatter has centered on Procter & Gamble’s expansion in emerging markets and its commitment to sustainability. Both of these factors have caught investors’ eyes recently, adding buzz and possibly some uncertainty about what’s next for the company.

• Right now, Procter & Gamble has a valuation score of 2 out of 6. This means it screens as undervalued on just two checks out of a possible six, so there’s certainly more to uncover. We’ll explore how this score stacks up using classic valuation approaches, and at the end, I’ll show you a smarter way to think about value beyond the usual metrics.

Procter & Gamble scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

A Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future cash flows and then discounting those amounts back to today’s dollars. This method provides insight into what the business may be worth, based on the money it is likely to generate in the coming years.

For Procter & Gamble, the current Free Cash Flow stands at $15.4 Billion. Analysts forecast steady growth in these cash flows, projecting they will reach about $21.4 Billion in 2035. Notably, analysts have only made explicit forecasts through 2028 (with 2028 FCF projected at $17.0 Billion). Later years are based on cautious, methodical extrapolations. All figures are in US dollars.

By discounting each year’s expected cash flows back to a present value, the DCF model calculates Procter & Gamble’s intrinsic value at about $185.05 per share. This is roughly 18.4% higher than the current trading price. This suggests that the stock is presently undervalued based on these long-term cash flow expectations.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Procter & Gamble is undervalued by 18.4%. Track this in your watchlist or portfolio, or discover 917 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Procter & Gamble.

The Price-to-Earnings (PE) ratio is a primary valuation tool for profitable companies like Procter & Gamble. It shows investors how much the market is willing to pay for each dollar of the company’s earnings, making it a quick way to assess whether a stock is trading at a premium or discount relative to its profits.

A fair PE ratio depends on factors such as expected company growth and the perceived risk of its future. Higher earnings growth and lower risk tend to support a higher PE ratio, while greater uncertainty or slower growth usually warrant a lower ratio.

Currently, Procter & Gamble trades at a PE ratio of 21.4x. This is above the Household Products industry average of 17.6x, and just slightly above the peer average of 20.5x. Although comparisons like these can be helpful, they do not always provide the full picture because each company has unique growth rates, risks, and profitability profiles.

Simply Wall St’s “Fair Ratio” is a proprietary metric that estimates the PE you might expect for Procter & Gamble when considering its earnings growth, industry, profit margins, risks, and market cap. Instead of relying solely on averages, the Fair Ratio evaluates both the company and its environment for a more tailored benchmark.

With a Fair Ratio of 25.8x compared to the actual 21.4x multiple, Procter & Gamble appears undervalued according to this more comprehensive approach.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1422 companies where insiders are betting big on explosive growth.

Earlier we mentioned that there’s an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simplified framework allowing investors to build and share their own story or perspective about a company like Procter & Gamble. This approach connects the company’s business fundamentals to future estimates and ultimately to a fair value. Instead of just crunching numbers, Narratives let you combine your assumptions about revenues, earnings growth, and margins with your take on what really drives the business. This makes the investment process more personal and insightful.

Narratives are available to everyone on Simply Wall St’s Community page and are already used by millions of investors. They streamline the decision process by showing how your unique outlook translates into a financial forecast and a fair value estimate. You can then compare that fair value with the current market price to decide if it’s time to buy or sell. Narratives aren’t static, either. When big news or earnings updates come in, these stories and their valuations automatically adjust, so your perspective stays relevant in real time.

For example, one investor’s Narrative for Procter & Gamble might forecast slow growth and margin pressure, leading to a low fair value estimate of $105. Another could anticipate robust innovation and buybacks, supporting a high target like $186. Narratives empower you to turn your own informed view into actionable insight.

For Procter & Gamble, we will make it easy for you with previews of two leading Procter & Gamble Narratives:

🐂 Procter & Gamble Bull Case

Fair value estimate: $169.05

Currently 10.8% undervalued compared to last close ($150.92)

Projected revenue growth: 3.2%

• Analyst consensus expects steady revenue growth, margin improvement, and robust earnings by 2028, supporting a fair valuation above the current market price.

• Growth drivers include product innovation, cost efficiencies, share repurchases, and expanding presence in various consumer segments.

• Risks include volatility in core markets, geopolitical tensions, tariffs, and currency fluctuations, all of which could impact revenue and margins if not addressed.

🐻 Procter & Gamble Bear Case

Fair value estimate: $119.81

Currently 26% overvalued compared to last close ($150.92)

Projected revenue growth: 4.7%

• Despite strong brand strength and operational efficiency, future growth is expected to remain modest and align with inflation, causing limited upside.

• Valuation methods such as DCF, dividend models, and historical comparisons all point towards a current trading price above estimated fair value, suggesting the stock is richly valued.

• P&G remains a high-quality, stable dividend payer, but investors may need to be cautious about buying at current prices unless fundamental growth or margin expansion accelerates.

Do you think there’s more to the story for Procter & Gamble? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include PG.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Residents of a shared property in south-east London had to urinate in a bath or use the lavatories at a nearby furniture superstore for 58 days because their landlord did not fix a broken toilet, a tribunal has heard.

The five tenants also had to put up with a faulty ventilation system that was so noisy it kept them awake at night and caused mould.

They applied for rent repayment accusing the landlords of not holding the correct licence to run the Greenwich property and were given £5,300 back.

The landlord accepted they were unlicensed and said it was due to the co-landlord’s memory loss which they had experienced since suffering a “severe brain injury” in 2021.

The owners of the four-bedroom maisonette on Woolwich Road required a special licence as the property was a House in Multiple Occupation (HMO), meaning the home was shared by at least three people sharing the same kitchen and bathroom.

The landlord told the tribunal that she had lost a letter from Greenwich Council which outlined updates to the council’s licensing policy, the Local Democracy Reporting Service reported.

The tribunal’s impression was that both landlords’ understanding of the licensing regime was limited and “they had no real understanding of the nature of mandatory licensing”.

The tribunal acknowledged the landlord’s health situation, but ruled they should have been aware of the need for HMO licensing as they owned and managed other HMO properties.

One of the residents admitted to breaking the lavatory bowl in October 2023. The landlords accepted responsibility for the repair, but it was not carried out for 58 days, the tribunal heard.

The landlords said they thought the faulty ventilation system served the whole block, but after finding out this was not the case a specialist company was contacted to have the system checked and repaired.

The system was found to be operating at 50 per cent efficiency and vent openings within the flat were “seriously affected by mould”, according to a report from the proceedings.

Considering the licensing, disrepair and other issues, the tribunal calculated the Rent Repayment Order to be 40 per cent of the maximum possible figure of £13,229. This was rounded to £5,300.

BELEM, Brazil, Nov 22 (Reuters) – A British real estate manager overseeing 26 billion euros ($29.93 billion) in assets and concerned about flood, fire and other climate-related risks to its properties sought help from Climate X, a data analytics firm based in London.

Climate X started crunching numbers and using its AI risk modeling tool, informed partly by U.S. scientific data, to help Savills Investment Management estimate possible damages to 300 of its assets in Europe and Asia if weather disruptions hit.

Sign up here.

Savills said the information helps with investment decisions and it may now use Climate X analytics to assess hundreds more properties.

Revenues for the earth intelligence sector should rise at least 10% to $4.2 billion by 2030, market analysis firm Gartner said, teasing the industry in July as a “new revenue growth opportunity.”

The industry’s impact could be even more significant. The World Economic Forum has estimated earth intelligence will help reduce risk, grow opportunities, and generate jobs for a total $3.8 trillion in economic value by 2030, up from $266 billion today.

The private data boom is also raising questions around accuracy and access for those unable to pay. Private companies can do only so much without baseline data from U.S. government agencies such as NOAA, according to officials from more than a dozen firms who spoke with Reuters.

“Without it we wouldn’t know if our models are good or bad, frankly,” Climate X co-founder and Chief Operating Officer Kamil Kluza said.

“We are huge consumers of governmental data to validate what’s happened in the past,” Kluza told Reuters. “The governments hold the past flood history … past subsidence incidents, landslides, and so on.”

HUNTING OPPORTUNITY AND COSTS

Gartner predicts private companies will soon account for more than half of global spending on data services, up from just 15% currently.

In 2025, earth intelligence companies raised some $3.2 billion across 57 funding rounds up to November 21, up sharply from $1.1 billion in 89 rounds last year and $845 million in 99 rounds in 2023, according to data from industry tracker Tracxn shared exclusively with Reuters.

“Business is good, business is growing,” the company’s UK head Dan Wicks told Reuters.

GHGSat is part of a trend in private satellite monitoring, with 666 commercial satellites focused on earth observation or science circling the planet in 2023, compared with just seven in 2005, according to the Union of Concerned Scientists.

With governments and energy companies looking for GHGSat’s help in spotting leaky infrastructure they can plug to stem climate-warming methane emissions and possibly boost profits, Wicks said, “we are seeing significant growth year on year as a private company.”

JUGGLING EQUITY, ACCESS AND PROFITS

Public companies are also rallying. Shares for one of the largest, Planet Labs, are up 190% since January.

In the seven decades since Dutch-based Fugro began studying soil, it has grown into a geospatial data company with annual revenues above $2.2 billion as it took on marine surveys and pushed its mapping out to sea.

“We map, then we start modeling it, and then we start monitoring it — whether it’s the built environment or the natural environment,” Fugro CEO Mark Heine told Reuters.

Two-thirds of its work is now offshore: building underwater maps that can help governments manage coastal environments or help ships navigate safely.

These companies are not immune to upheaval. After posting 4% growth in 2024, Fugro took a hit partly as offshore wind clients suffered a downturn after Trump slammed the brakes on U.S. support for renewable energy. Fugro’s third-quarter revenues were down 14.5% from last year.

Fugro, keen to offer more, is co-chairing the U.N.’s Ocean Decade Corporate Data Group aimed at unlocking marine data from industries like energy, telecoms and fisheries for public benefit.

“We have invited 12 very large enterprises, like Shell, BP, Total, Equinor, to discuss how to release ocean data collected for commercial purposes,” Heine said.

Fugro has also teamed up with the private GIS software company Esri to build coastal maps around climate-vulnerable island nations, starting in the Caribbean.

“We believe rich countries have a responsibility to help small island nations protect themselves from sea-level rise,” Heine said.

($1 = 0.8688 euros)

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• Wondering if Pfizer is a smart buy at today’s price? You are not alone, especially as value-focused investors begin to focus on the stock.

• Pfizer’s performance has been mixed lately. Shares dipped just 0.1% in the last week, inched up 1.3% over the past month, but are still down 5.9% year to date despite a 4.7% return over the last twelve months.

• Recent headlines about Pfizer have focused on its latest product developments and major moves in the pharmaceutical sector, generating speculation about the company’s future direction. These stories give investors plenty to consider regarding long-term growth prospects and short-term uncertainty.

• In terms of valuation, Pfizer scores a strong 5 out of 6 on our core checklist for undervaluation, making it a notable candidate for deeper analysis. Next, let us explore the valuation methods that matter, and stay tuned for a perspective that goes beyond the numbers alone.

Find out why Pfizer’s 4.7% return over the last year is lagging behind its peers.

A Discounted Cash Flow (DCF) model estimates a company’s value by projecting its future cash flows and discounting them back to their value today. This helps investors see what those future dollars are worth in today’s terms.

For Pfizer, the latest reported Free Cash Flow (FCF) stands at $9.95 Billion. Analysts forecast that FCF will grow steadily, with Simply Wall St extrapolating a projected FCF of $16.36 Billion in the year 2029. While analyst estimates usually cover the next five years, these longer-term numbers are model driven based on known cash flow trends.

Based on these projections and the DCF methodology, the estimated intrinsic value of Pfizer’s shares comes out to $62.40. This is a striking 59.9% higher than the current market price, indicating that the stock trades at a substantial discount according to this valuation.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Pfizer is undervalued by 59.9%. Track this in your watchlist or portfolio, or discover 917 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Pfizer.

For companies like Pfizer that consistently generate profits, the Price-to-Earnings (PE) ratio is a popular and reliable valuation tool. The PE ratio tells investors how much they are paying for each dollar of current earnings, providing a useful snapshot for comparing across companies and industries.

It is important to remember that what counts as a “normal” or “fair” PE ratio varies depending on a company’s growth expectations and risk profile. Companies with higher expected earnings growth or lower risk typically justify a higher PE, while those with slower growth or greater risk generally trade on a lower multiple.

At the moment, Pfizer trades on a PE ratio of 14.53x. This is noticeably below both the industry average of 19.92x and the peer group average of 17.05x. However, benchmarks like industry averages do not always tell the whole story.

That is where the Simply Wall St Fair Ratio comes in. The Fair Ratio for Pfizer is calculated at 24.17x, reflecting a more personalized estimate based on Pfizer’s growth prospects, profit margin, industry environment, company size, and business risks. This proprietary metric offers a more tailored and holistic view of what could be considered a reasonable valuation for Pfizer compared to industry and peer averages that may not fully capture company-specific factors.

Given that Pfizer’s current PE of 14.53x is well below its Fair Ratio of 24.17x, the evidence suggests Pfizer is undervalued on this preferred metric.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1422 companies where insiders are betting big on explosive growth.

Earlier we mentioned there is an even better way to understand valuation, so let us introduce you to Narratives. In investing, a Narrative is your perspective on a company’s future, connecting the story you believe about its business, such as growth in new markets, product launches, or risk factors, to your own estimates for revenue, earnings, and margins.

Narratives make investing smarter and more personalized by linking your view of Pfizer’s story directly to a dynamic financial forecast and fair value estimate. This approach is easy to use and available to all on Simply Wall St’s Community page, where millions of investors share their views and track company progress.

With Narratives, you can see how your fair value estimate compares to today’s market price. This makes it easier to decide when a stock might be a buying opportunity or when it may be time to take profits. Even better, as new data or news emerges, each Narrative updates automatically, keeping your analysis current without any extra effort.

For Pfizer, some investors see fair value as high as $35.77 per share (expecting margin expansion and accelerated innovation), while others estimate as low as $24.00 (citing patent risks and margin pressure).

For Pfizer, we’ll make it really easy for you with previews of two leading Pfizer Narratives:

🐂 Pfizer Bull Case

Fair Value: $29.08

Undervalued by 13.9%

Expected Revenue Growth Rate: -2.66%

• Growth strategy focuses on expansion in innovative therapies and global emerging markets. The goal is to achieve margin improvement and resilience despite industry pressures.

• Recent deals and digital investments, such as the Metsera acquisition and AI-powered R&D, are expected to drive long-term earnings growth and operational efficiencies.

• Risks include regulatory pressures, patent expirations, and fierce competition. Consensus analyst targets indicate upside of 14.4% from current pricing.

🐻 Pfizer Bear Case

Fair Value: $24.00

Overvalued by 4.3%

Expected Revenue Growth Rate: -4.21%

• Stricter drug price controls, ongoing patent expirations, and intensifying generic competition are expected to pressure Pfizer’s revenues and margins over the next several years.

• Heavy reliance on bringing new R&D assets to market introduces risk, as pipeline delays or failures may not offset losses from established drugs.

• Bears believe the company is fairly to slightly overvalued at its current price. This makes downside risks more prominent than potential upside under these assumptions.

Do you think there’s more to the story for Pfizer? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include PFE.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Story Continues

Currently, Merit Medical Systems is trading at a PE ratio of 43.7x. This is significantly above both the medical equipment industry average of 28.0x and the average among its peers of 27.0x. While surface-level comparisons might suggest the stock is expensive based on earnings, it is important to consider more than just benchmarks when judging if a valuation is fair.

Simply Wall St’s proprietary “Fair Ratio” aims to provide a more accurate assessment than a simple comparison to industry or peers. This measure accounts for factors such as Merit Medical’s earnings growth, profit margin, industry landscape, company size, and inherent risks. According to the Fair Ratio, Merit Medical should be valued at 23.3x earnings, notably less than its current PE.

Comparing Merit Medical Systems’ actual multiple to its Fair Ratio, the current PE is well above what would be considered fair given its growth prospects and risk profile. This points to the stock being overvalued on this metric.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1422 companies where insiders are betting big on explosive growth.

Earlier, we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your own story about a company; it connects your perspective and expectations for things like future revenue, earnings, and margins to a forecast and, ultimately, a fair value. Narratives make investing more accessible, as they are available right inside the Simply Wall St platform’s Community page, used by millions of investors. By comparing your Narrative’s Fair Value to the market Price, you get a clear signal on when a stock might be a buy or a sell according to your view. As company news and earnings are released, Narratives update automatically to reflect new information, keeping your analysis current. For example, when analyzing Merit Medical Systems, one investor might be optimistic, assuming rapid margin expansion and targeting a future price of $122 per share. Another might focus on reimbursement delays or industry risks, setting a much more cautious target of $90. Narratives let you see and compare these perspectives clearly, helping you make truly informed investment decisions tailored to your own outlook.

Do you think there’s more to the story for Merit Medical Systems? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include MMSI.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Three pence: a small charge per mile for an electric vehicle, but a giant conceptual leap for Britain.

Chancellors of the exchequer have long resisted any form of road pricing as politically toxic. That may be about to change next week: Rachel Reeves, perhaps inured to being pilloried for any money-raising proposal, is expected to introduce a charge explicitly linked to how far EVs drive.

The Treasury has all but confirmed some kind of charge will be announced at next week’s budget, but the details have not been revealed. According to an initial report in the Telegraph, EV drivers could from 2028 pay a supplement based on how far they had driven that year on top of their annual road tax, or vehicle excise duty (VED). That could be a self-declared estimate of distance or a check on the odometer at an MOT.

According to Department for Transport (DfT) figures, battery electric cars – with lower running costs than petrol – are used more: clocking up about 8,900 miles on average in 2024. At 3p a mile, that would bring in £267 a car from the 1.4m EVs currently on the road – about £375m a year in total.

The transport secretary, Heidi Alexander, was at pains to rule out a national road pricing scheme in the face of Commons attacks on Thursday – although a later “clarification” made clear that the EV pay-per-mile was still on the table.

The long-term picture is a looming shortfall in motoring tax revenues, as income from fuel duty evaporates in the transition to EVs. Petrol and diesel cars effectively pay a charge linked to how far they drive – but via fuel consumption at the pump.

Fuel duty of 52.95p a litre (roughly 5p a mile in average cars) will bring in £24.4bn this financial year, according to the latest forecast from the Office for Budget Responsibility, but the billions will dwindle away from 2030, when the ban on new pure petrol and diesel cars comes in.

The challenge is to find a fair replacement for an unsustainable system – and overcome longstanding resistance on the right to any form of road charging, bundled up in the culture wars around London’s ultra-low emission zone (Ulez) and low-traffic neighbourhoods with their claims of curtailed freedoms and increased surveillance.

Some economists have championed schemes that would price roads by time and congestion – potentially fairer and a better tool to manage road use, but bringing in another level of tracking.

Any scheme should be kept simple, says Steve Gooding, the director of the RAC Foundation motoring thinktank. Although, when it comes to privacy, he adds: “The amount of data being generated by the modern car is phenomenal. If the DfT or DVLA start tracking their movements, people think Big Brother is watching. But Elon [Musk] – they’re not that fussed.”

A wider concern is that pay-per-mile would discourage drivers from switching to electric vehicles, crucial for cutting carbon emissions. Manufacturers, businesses and motoring groups such as Ford, AutoTrader and the AA have all spoken out on the timing of new charges at this point in the transition. Carmakers must, under Britain’s ZEV mandate, ensure one in three cars sold next year are zero-emission, rising to 80% by 2030 (with hybrids allowed to make up the remaining 20%).

While grants remain of up to £3,750 on new electric vehicles and – for some – the running costs remain much cheaper, some discounts or tax and charge exemptions have already ended. Transport for London recently confirmed EVs would be liable for the capital’s congestion charge from next year, and zero-emission cars started paying VED in April.

According to a report for the Social Market Foundation (SMF) thinktank, New Zealand provides a cautionary tale. EVs were made liable last year for its road-user charge, which previously only applied to diesel vehicles, whereby drivers buy paper permits in units of 1,000km (621 miles). The move, allied to the end of buyer grants and tax exemptions, led to a sharp drop in new EV sales – now just 4% of the market, having peak 19%.

SMF says that Iceland, which also brought EVs into pay-per-mile schemes last year, maintained incentives and differentials in pricing and had a much smaller decline in market share.

Advocates for the new technology are alarmed. The Electric Vehicle Association England, a group representing drivers, warned in a letter to the chancellor that consumer sentiment was still sceptical about EVs.

For many, running costs are no longer the incentive they once were – particularly for those reliant on public charging points, usually in poorer areas and without a driveway. Ginny Buckley, the chief executive of Electrifying.com, an EV reviews platform and marketplace, says: “If you can’t rely on off-peak, affordable home charging and you’re reliant on the public charging network, for many people it will cost you more per mile to run your EV than it will a petrol car.”

Graham Parkhurst, a professor of sustainable mobility at the University of the West of England, describes the vast difference between domestic chargers and public charging points – which attract VAT at 20% on top – as a “political timebomb”, further dividing the haves and have-nots.

Even long-term proponents of pay-per-mile such as Parkhurst warn of the need to tread carefully: “Charging according to how much a vehicle moves makes sense. Fuel duty does that. But we need time to work out how to do this in the context of wider transport taxation. To the extent we need cars, it’s much better that they are electric,” he says.

The thinktank the Resolution Foundation recommends a charge based on miles driven and weight be brought in only for future EV sales, as part of VED.

Tanya Sinclair, the chief executive of the industry group Electric Vehicles UK, agrees that motoring taxes need fundamental reform – but the government needs to be absolutely clear it wants people to switch to EVs. “Anything that muddies that message – such as giving a grant with one hand and introducing pay-per-mile with the other – undermines that clarity for the consumer,” she says.

A government spokesperson says it would “look at further support measures” for EVs, but adds: “Fuel duty covers petrol and diesel, but there’s no equivalent for electric vehicles. We want a fairer system for all drivers whilst backing the transition to electric vehicles.”

For Gooding “the best time to introduce road pricing would have been a while ago – but politics has been an interesting place”. The cross-party transport select committee recommended the urgent introduction of road pricing – replacing all motoring taxes for every type of vehicle – in 2022. But no ministers have fancied it; London’s mayor, Sadiq Khan, battered by anti-Ulez hostility, last year had to rule out even considering a pricing scheme, despite once talking of it as the sensible option.

Piloting a new policy is, Gooding says, best done “with the smallest number you can get away with – and if it’s only EVs, that’s better than trying to introduce some kind of complicated charge for the 34m cars we’ve already got”.

For some, including Buckley and the Campaign for Better Transport, an obvious, if also politically contentious, answer remains: end the 15-year freeze on fuel duty and the temporary 5p cut in place since 2022.

Had the levy stayed the same in real terms, almost £150bn would have accrued to the public purse, according to SMF. Whatever pay-per-mile scheme evolves, Reeves “must ensure operating taxes on EVs remain lower than on petrol”, it says. “The simplest way to maintain that difference is to raise fuel duty.”