Blair thinktank: Drivers should pay £70 a year on pay-per-mile roads

by · Mail Online

British drivers should be charged to pay-per-mile on their cars, according to the think tank of former Prime Minister Tony Blair.

Ahead of the budget on Wednesday, the Tony Blair Institute has suggested that Rachel Reeves should introduce a road pricing system of 1p a mile for cars and van, as well as a charge of 2.5p to 4p for lorries and heavy goods vehicles.

It is estimated the charges would cost the average motorist £70 a year, which would be worked out based on mileage readings after an annual MOT, The Guardian reported.

Reeves is expected to end the temporary 5p cut in fuel duty in her first budget on Wednesday, with an inflationary rise in the tax paid on petrol and diesel also expected.

The temporary cut in fuel duty was adopted in 2022. 

This graph shows how Government income from fuel duty plus VAT will plummet by 2050 if kept at current frozen level. The red area shows how pay-per-mile tax could take up the slack, according to the Tony Blair Institute scheme
Tony Blair's think tank is calling for the changes which could cost the average driver £70 a year
Rachel Reeves will announce her budget on Wednesday, with a temporary cut in fuel duty expected to end  

The Tony Blair Institute has suggested that charging drivers per mile could be adopted instead.

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In a report, the institute says that the charge would raise the same amount of money as ending the cut in fuel duty.

 In 2007, attempts by Blair to introduce road tolling were met with huge objections with more than one million people signing a parliamentary petition against the plans.

The move has been suggested as more drivers are making the change to electric cars, causing a decline in fuel duty which brings in around £25 billion each year.

The institute said the road pricing scheme would be 'a crucial step in reforming the UK's system of motoring taxation for the electric-vehicle era'.

The report says that fuel duty should be frozen and eventually become redundant as vehicles move towards zero-emission, with the price per mile rising to about 10-12p a mile by 2050.

Drivers could be forced to pay for each mile they have driven when they get their annual MOT

The report comes after the National Infrastructure Commission, Sir John Armitt, said road pricing was 'inevitable' and Campaign for Better Transport have called for pay-per-mile charges for electric vehicles. 

Reeves could increase fuel duty in order to fill a '£40billion black hole' in the country's finances.

The Tony Blair Institute also urged her to change fiscal rules for investment, and to overhaul stamp duty while raising council tax on more expensive houses.

A government spokesperson said: 'We have no plans to introduce road pricing. We are committed to supporting our automotive sector as we transition to electric vehicles in order to meet our legally binding climate targets.'