Toll road network could address fall in fuel duty revenue

A system of toll roads, costing drivers around £700 a year, could be used in a bid to compensate for the loss in fuel duty resulting from the uptake of electric vehicles.

As EVs become more and more popular, the government’s revenue from fuel duty will decrease. Electric vehicles don’t pay fuel duty, and the drivers are also exempt from most vehicle excise duty – limiting the money that can be earned from them.

A study conducted by Bloomberg New Energy Finance and reported in The Times suggests that the government could look to compensate for this in a number of ways.

Among the solutions suggested were increasing the surcharge on electricity or a higher fuel duty to be paid by those still driving petrol and diesel vehicles.

But the study suggested that the most effective system would be to scrap existing fuel duty and vehicle excise duty and replace it with a mileage-based road charging system. It raised the idea that drivers should pay a levy of 7.5p per mile by 2030, rising to 9.1p per mile by 2040.

That’s the year that the government intends to suspend sales of all new petrol and diesel cars, though used examples will be on the roads for some years afterwards.

It’s not the first time that such a system has been proposed. Back in 2005, the Labour government proposed a road pricing policy that would see drivers pay up to £1.34 per mile to travel at peak times.

Significant backlash, including an online petition against the scheme that gathered 1.8 million signatures forced the government to abandon the plan.