Policy Exchange (a right-wing think-tank) has put forward a ground-breaking pay-per-mile system that could make driving cheaper for many UK motorists. The well thought-out plan aims to swap fuel duty and road tax with time-based charges‚ giving better rates to those who drive during non-peak hours
The new system might boost UKʼs economy by £15-30 billion yearly — about 1% of GDP. Its smart-pricing approach would help manage traffic flow and fix the problem of lost income from non-taxed e-vehicles (which could need a 6p income tax rise to cover)
The proposal almost became reality few years back. Boris Johnsonʼs government had plans ready in late-2021‚ with Rishi Sunak supporting the idea; however party-gate issues made them put it aside
The switch would start as an opt-in choice: drivers could pick between old fuel duty or new mile-based fees. Those choosing the new system would get fuel duty money back based on their cars usage
Here are some yearly cost examples from the think-tank research:
- Rural retired driver: £532 (now £745)
- Country tradesperson: £850 (now £984)
- Big-city commuter: £1570 (now £984)
- School-run parent: £735 (now £745)
- Truck driver: £13‚750 (now £10‚663)
The policy case for road pricing is unanswerable – the main barrier is the politics
Roger Bootle from Policy Exchangeʼs Policy Programme says its a no-brainer: the tech exists‚ economists back it‚ and most drivers would benefit — all thats needed is political will to make it happen