Drivers should have to fork out around £70 a year on the pay-per-mile road pricing system, says Tony Blair’s think tank

British drivers should be charged payment per mile driven in their cars, according to former prime minister Tony Blair’s think tank.

Ahead of Wednesday’s Budget, the Tony Blair Institute suggested that Rachel Reeves should introduce a 1 cent per mile road pricing system for cars and vans, as well as a 2.5 cent to 4 cent charge for trucks and HGVs. of goods.

It is estimated that the charges would cost the average driver £70 a year, which would be calculated based on mileage readings following an annual MOT, The Guardian reported.

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

The temporary reduction in fuel tax was adopted in 2022.

This chart shows how government revenues from fuel tax plus VAT will fall sharply by 2050 if maintained at the current frozen level. The red area shows how tax paid per mile could make up the gap, according to the Tony Blair Institute scheme

Tony Blair’s think tank is calling for changes that could cost the average driver £70 a year

Rachel Reeves will announce her budget on Wednesday, with a temporary fuel tax cut expected to end

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

In a report, the institute states that the charge would raise the same amount that would end the cut in fuel tax.

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

The move has been suggested as more drivers are switching to electric cars, causing a decline in fuel tax, which raises around £25 billion a year.

The institute said the road pricing scheme would be “a crucial step in reforming the UK car taxation system for the electric vehicle era”.

The report says fuel tax should be frozen and eventually made redundant as vehicles move towards zero emissions, with the price per kilometer rising to around 10-12p per kilometer by 2050.

Drivers could be forced to pay for every mile they have driven when they receive their annual MOT

The report comes after National Infrastructure Commission Sir John Armitt said road prices were “inevitable” and the Campaign for Better Transport called for per-kilometre pay rates for electric vehicles.

Reeves could raise fuel tax to fill a “£40 billion black hole” in the country’s finances.

The Tony Blair Institute also urged her to change tax rules for investment and review stamp duty, while also increasing council tax on more expensive homes.

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 to meet our legally binding climate targets.”