Chancellor Rishi Sunak is reportedly considering plans to charge motorists for every mile they drive on Britain's roads, aiming to fill a £40 billion tax shortfall caused by the shift to electric vehicles. The proposal, which would introduce a national 'pay-as-you-drive' system, has sparked debate as the Treasury seeks to replace revenues lost from fuel duty and vehicle excise duty.
According to reports, Sunak is 'very interested' in the idea, which would see drivers charged based on distance travelled. A similar scheme was shelved by the Labour government in 2007 after a petition signed by 1.8 million people opposed plans that could have cost up to £1.50 per mile. Current road pricing in England is limited to schemes like the M6 Toll, Dartford Crossing, and London's Congestion Zone.
The move comes amid fears that the ban on new petrol and diesel car sales, which Boris Johnson may bring forward to 2030, will hit Treasury revenues hard. Fuel duty alone raises around £27.5 billion annually, while vehicle excise duty contributes £7.1 billion, and VAT on fuel generates nearly £6 billion. A government source confirmed that the Treasury has analysed options for a national road pricing scheme to replace these lost taxes.
Critics have raised concerns about privacy and cost, recalling the 2007 backlash against satellite tracking or roadside beacons. The Department for Transport previously denied plans for a national scheme, insisting only local tolls were considered. However, with the green agenda accelerating, the idea is back on the table as ministers seek to balance environmental goals with fiscal sustainability.
