The Chancellor of the Exchequer is considering a radical overhaul of the way road users are charged for using public highways, according to reports.
The ‘pay per mile’ concept, originally scrapped by the Labour government in 2007, has been mooted as an alternative to Vehicle Excise Duty, following concerns that the move to EVs could leave a £40bn shortfall in the Treasury’s budget.
The news, reported in The Times, highlighted that a reduction in VED, fuel duty from a decline in petrol and diesel use, and other pollution focused schemes would create a huge shortfall for the Treasury when the UK has fully transitioned to electric vehicles.
Currently, there are only a few road user charging schemes in the UK, such as the M6 Toll road and the Dartford Crossing. Changes in technology, such as ANPR and GPS tracking of vehicles, has made it easier to consider road user charging since it was first considered as a universal policy option more than two decades ago.
A Treasury source told the Times: “The Treasury regularly explores lots of different policy options. This is no different.”
Under the original Labour administration’s proposals in 2007, there would have been devolution of responsibility to local networks to implement tolling with motorists paying for technology to be fitted to their cars.