Government 'planning motorway toll roads to replace lost tax income from electric cars'

Downing Street is considering introducing more motorway toll roads as a way of replacing the £35bn hole in the public finances expected as a result of petrol and diesel cars being phased out.

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The Times has reported the idea is under consideration as a way of replacing funds raised from fuel duty and vehicle excise duty, which are not levied on electric vehicles.

It comes as Chancellor Rishi Sunak is expected to announce a cut to fuel duty in tomorrow's Spring Statement.

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A source told the newspaper: “It’s definitely being taken very seriously in Downing Street. The policy unit is giving it a thorough look and the problems with fuel duty now make it more urgent.”

More toll roads could be introduced across the country, it has been suggestedMore toll roads could be introduced across the country, it has been suggested
More toll roads could be introduced across the country, it has been suggested

No work on specific options is under way at this stage.

Currently, the only major toll road in Britain is the M6 in the West Midlands, which costs £7.10 for cars on weekdays.

Figures from the Society of Motor Manufacturers and Traders show plug-in vehicles accounted for more than one in six new cars registered in the UK last year.

The sale of new petrol and diesel cars and vans will be banned in the UK from 2030.

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Last month, the influential Transport Select Committee called on the Government to introduce a new road pricing system, based on miles travelled and vehicle type - warning that the current system will deliver “zero revenue” by 2040.

It said such introducing a road pricing system would enable the Government to maintain the existing link between motoring taxation and road usage.

Huw Merriman, chair of the committee, suggested work on introducing such a plan “should begin without delay” given the urgency of the situation.

He said: “New taxes, which rely on new technology, take years to introduce.

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“A national scheme would avoid a confusing and potentially unfair and contradictory patchwork of local schemes but would be impossible to deliver if this patchwork becomes too vast.

“The countdown to net zero has begun. Net zero emissions should not mean zero tax revenue.”

Mr Merriman said: “It’s time for an honest conversation on motoring taxes.

“The Government’s plans to reach net zero by 2050 are ambitious. Zero emission vehicles are part of that plan.

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“However, the resulting loss of two major sources of motor taxation will leave a £35 billion black hole in finances unless the Government acts now - that’s four per cent of the entire tax-take. Only £7 billion of this goes back to the roads; schools and hospitals could be impacted if motorists don’t continue to pay.

“We need to talk about road pricing. Innovative technology could deliver a national road-pricing scheme which prices up a journey based on the amount of road, and type of vehicle, used. Just like our current motoring taxes but, by using price as a lever, we can offer better prices at less congested times and have technology compare these directly to public transport alternatives.”

Mr Sunak is widely expected to introduce a temporary 5p cut in fuel duty in tomorrow’s Spring Statement. Fuel duty is currently levied at 57.95p per litre for petrol and diesel, with VAT at 20 per cent charged on top of the total price.

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