Drivers could face tolls on UK’s roads

Sunak looks to plug £ 40bn tax shortfall

MOTORING: Drivers could be charged for using Britain’s roads under plans reportedly being considered by Chancellor Rishi Sunak. It was reported the move is being mulled to cover a tax shortfall of £ 40bn caused by the rise in popularity of electric cars.

The UK currently only has one major toll road – the M6 Toll in the West Midlands.

MOTORISTS could be charged for using Britain’s roads under plans reportedly being considered by Chancellor Rishi Sunak.

It was reported the move is being mulled to cover a tax shortfall of £ 40bn caused by the rise in popularity of electric cars.

The UK currently only has one major toll road – the M6 Toll in the West Midlands – and drivers also face levies when using certain tunnels and bridges.

According to the report, Mr Sunak is “very interested” in the concept of a national road pricing scheme but it is unclear how the charges would be calculated.

Currently motorists pay 57.95p in fuel duty for each litre of petrol and diesel they buy – a figure which has been frozen since March 2011.

This brings in £ 28bn a year, or 1.3 per cent 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 a proposed ban on the sale of new petrol and diesel cars will be accelerated to 2030 as part of efforts to reach net- zero carbon emissions by 2050.

Under Tony Blair, Labour backed and then abandoned the idea of a national road pricing scheme with a petition against the plans reaching 1.8 million signatures.

AA president Edmund King said that, while electric vehicles were good for the environment, they are less so for the Exchequer.

“The Government can’t afford to lose £ 40bn from fuel duty and car tax when the electric revolution arrives,” he said.

“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’.”

Mr King said the country needed an “imaginative solution”, highlighting a proposal he made in 2017 where drivers would be given an allowance of 3,000 miles per year – or more in rural areas – free of charge, and any mile over that would be subject to a fee.

Road pricing involves charging drivers based on how often and when they use roads.

London’s congestion charge is a form of road pricing, with drivers paying a £ 15 daily fee to enter the centre of the capital between 7am and 10pm.

France, Italy, Spain, Norway, Australia, Singapore, the US and Canada are among other countries where motorists pay to use certain roads.

Road maintenance and improvements are funded by general taxation. There is no direct link between investment and the amount of money raised through fuel duty and Vehicle Excise Duty, which is also known as car tax.

Advocates of road pricing say it can slash traffic jams by charging drivers less if they cut down their overall mileage or drive on quieter roads at off- peak times.

Road commuters lost an average of 115 hours stuck in traffic in 2019, according to new research carried out by traffic analyst Inrix. This cost the country £ 6.9bn and a typical driver £ 894.

The Department for Transport published a feasibility study into road pricing in 2004, but plans were not implemented.

The switch from petrol and diesel cars to electric models will slash the amount of money made from fuel duty, which stands at £ 28bn a year.

Opponents of road pricing have compared it to the poll tax dispute, which led to widespread riots in 1990.

The Government can’t afford to lose £ 40bn from fuel duty and car tax.

AA president Edmund King.