Pay-per mile tolls ‘inevitable’ on UK roads as ministers struggle to balance the books as petrol and diesel cars are replaced by electric, government’s infrastructure tsar warns

Pay-per-mile tolls and other form of road pricing are ‘inevitable’ in the UK as petrol and diesel vehicles are replaced by electric ones, the country’s infrastructure czar has warned.

Sir John Armitt said that governments would need some way of recouping the £35billion added annually to the Treasury from taxes on fossil fuels and vehicle excise duty, as electric cars are not liable for either.

Before the election the Tories claimed Labour would ‘declare war’ on motorists by introducing road pricing schemes like the Ulez scheme in London.

And the idea was examined by the Treasury when Boris Johnson was in No10, before it was later dropped. 

Speaking to reporters yesterday Sir John, the chairman of the National Infrastructure Commission who also worked for the last Tory government, said: ‘It’s politically a very difficult issue isn’t it? But many people will say road pricing is inevitable. Personally, I don’t see why it should be any different to anything else.’

‘We pay for all our other infrastructure services as we use them, and we pay for driving on the road, as we use it, via petrol tax. And if you’re going to lose the petrol tax, at [more than] £30bn a year, what is government going to replace it with?’

The Treasury in 2021 examined proposals for the introduction of road pricing to replace the £30billion in lost fuel duty resulting from a move to electric vehicles.

Last month Chancellor Rachel Reeves was urged to impose a pay-per-mile scheme on UK drivers to avoid a ‘black hole’ from lost fuel duty revenue.

Public transport charity Campaign for Better Transport (CBT) issued the plea, claiming it would have public support.

It proposed that drivers of zero emission vehicles (ZEVs), such as electric cars, should be charged based on how far they travel.

Under the plan, drivers with a ZEV before the implementation date would be exempt, incentivising the switch to electric motoring.

But successive governments have found the prospect of introducing per-mile charges – known as road pricing – to be too politically toxic.

The Treasury in 2021 examined proposals for the introduction of road pricing to replace the cash in lost fuel duty resulting from a move to electric vehicles.

But it was axed as officials feared charging drivers by the mile would act as a major disincentive to people considering buying an electric vehicle. 

Fuel duty raised £25.1 billion (1.0 per cent of GDP) in 2022-23, but has been falling as share of GDP since 1998-99, according to the Office for Budget Responsibility (OBR).

And it is projected to fall to 0.1 per cent by 2045 when electric cars are expected to account for almost all cars on the road following the ban on sales of petrol and diesel vehicles in 2035.