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A new road tax could one day be pay-as-you-drive

Motorists could one day be billed for road use on a pay-as-you-go basis, the Government has signalled. Tax and fuel duty bolster the Treasury’s coffers to the tune of £40 billion each year – but may be on “borrowed time” in the advent of an electric car revolution.

The House of Commons’ Transport Committee now wants to open a “national debate” on road pricing ahead of a formal inquiry next year.

Funding from fuel duty might eventually dry up entirely, as the motoring industry moves away from traditional fuels.

A road pricing scheme was last considered in 2007, but the Labour administration abandoned proposals following an online petition attracting 1.8 million signatures.

Earlier this month, the Institute for Fiscal Studies called on MPs to consider a range of road pricing efforts to plug the funding gap.

Lilian Greenwood, who chairs the Transport Committee, said: “We need to ask how we will pay for roads in the future and in answering that question we have an opportunity for a much wider debate about our use of road space, cutting carbon emissions, tackling congestion, modal shift and how we prioritise active travel.”

The committee is inviting the opinions of drivers and non-drivers to scrutinise the economic, environmental and social impact of road pricing in early 2020.

Road pricing efforts could include tolls, congestion charges, HGV levies, workplace parking levies, plus low emission and clean air zones.