New plans are being considered by Rishi Sunak which reveals that motorists could be charged for every mile they drive on Britain’s roads.
The Chancellor is mulling over the move to fill a £40 billion tax shortfall caused by the rise in popularity of electric cars, The Times reports.
The London Congestion Zone, the M6 Toll in the West Midlands, the Dartford crossing, and levies on certain tunnels and bridges are currently the only road charging schemes.
Labour abandoned the unpopular idea of a national road pricing scheme when Blair was in charge, amid fury at drivers potentially being charged up to £1.50 a mile. A staggering 1.8 million signatures were on a petition against the plans.
However, Mr Sunak is reportedly ‘very interested’ in the concept of a national road pricing scheme, but it’s unclear how the charges would be calculated.
For each litre of petrol and diesel they buy, motorists currently pay 57.95p in fuel duty – a figure which has been frozen since March 2011.
£28 billion a year is generated by this, or 1.3% of national income, according to the Institute for Fiscal Studies, while VAT on fuel and vehicle excise duty also raises money for the Treasury.
It has recently been reported that as part of efforts to reach net-zero carbon emissions by 2050, a proposed ban on the sale of new petrol and diesel cars will be accelerated to 2030.
President of the AA, Edmund King, said that while vehicles were good for the environment, they are less so for the Treasury.
He said: “The Government can’t afford to lose £40bn from fuel duty and car tax when the electric revolution arrives.
“It is always assumed that Road Pricing would be the solution but that has been raised every five years since 1964 and is still perceived by most as a “poll tax on wheels”.’
According to Mr King, the country needed an “imaginative solution”, highlighting a proposal he made in 2017 where driver would be given an allowance of 3,000 miles per year – or more in rural areas – free of charge, and any mile over would be subject to a fee.