Treasury considering ‘charging motorists to use roads to fill £40bn tax shortfall’

Motorists could be charged for using Britain’s roads under plans reportedly being considered by the Treasury in response to an expected £40 billion tax shortfall amid a switch to electric cars.

It comes as Boris Johnson is expected to announce the government will bring forward a ban on the sale of new petrol and diesel cars to 2030 – five years earlier than planned – as he unveils his 10-point strategy for tackling the climate emergency.

According to The Times, the chancellor Rishi Sunak is “very interested” in a national road pricing scheme as the rise in popularity of electric cars that could leave the Treasury with multi-billion funding gap due to a loss in fuel duty.

Currently, motorists pay 57.95p in fuel duty for each litre of petrol and diesel they buy which amounts to around £28 billion a year, or 1.3 per cent of national income, according to the Institute for Fiscal Studies.

Last year, the IFS warned the government’s commitment to reaching net zero emissions by 2050 – a legally binding target – means that “revenue from fuel duties will completely disappear over the next few decades” and presented a “huge long-run fiscal challenge for the government”.

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.

The Treasury declined to comment on any revival of the concept when approached by The Independent, but the chancellor later said: “Speculation that people might see – I wouldn’t comment on future fiscal policy, but this week the prime minister will be publishing our plan actually for our green revolution as he likes to describe it with an exciting set of opportunities in there to create jobs and drive growth across the UK as we transition into net zero.”

Edmund King, president of the AA,  said: "The government can't afford to lose £40bn from fuel duty and car tax when the electric revolution arrives.

"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'."

He 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.

The bringing forward of the date to ban the sale of new petrol and diesel cars to 2030 is backed the government’s independent advisory body the Committee on Climate Change and environmental campaigners.

Speaking to The Independent, Lord Deben, a former Conservative environment minister who chairs the body, urged Mr Johnson to immediately commit to a raft of fully-funded environmental policies if he hopes to be seen as “credible” in tackling the climate crisis.

Ahead of an anticipated speech from the prime minister outlining his 10 point plan, he said: “If the prime minister makes this awaited speech, what we’ll be looking for is firm commitments for immediate action on the central issues which really have to be dealt with at once.