I applaud this policy, and I know how to disconnect the odometer on all my cars :-)
The Govt currently raises £25bn per year from petrol and diesel taxes. If (say) 50% of cars are electric or plug in hybrid by 2030 then that's a loss of £12Bn to the treasury. By 2040 it'll be closer to the full £25Bn since the only ones still using dinosaur juice will be those of us still driving classic cars. Something has to be done to plug that gap in funding. We may or may not like whatever they propose, but at least they have realised there is a looming issue, and are thinking about how to deal with it.
An interesting point has been raised on the skiing forums. Dover to the Alps and back is (roughly) 1200 miles, depending on destination. At 3p/mile thats £36. All those miles will show on your odometer, none of them are in the UK, but are you still going to get charged by HMRC?