Road tolls: why road pricing will affect you

Charging drivers to use specific routes is one element of road charging, a scheme which has long been mooted and which could help to raise funds for the Treasury.

Indeed, a hole of up to £35 billion is expected over the next few decades. This deficit is being accelerated by the move to electric cars, which aren’t required to pay road tax until April 2025, and aren't subject to fuel duty. When owners of electric vehicles (EVs) do pay road tax (VED), it will be at the lowest rate of £10 for the first year, and £190 for each subsequent year. 

The shortfall is expected to be exacerbated by the new Labour Government’s plan to bring the ban on the sale of new non-electric cars back to 2030. 

Why opt for road charging?

The threat to the public purse was first flagged up in the Government’s Net Zero Review: Interim Report, published in December 2020. It said: “Over time, the Government will need to consider how to offset lost tax revenues – whether through adjustments to other taxes or reductions in government spending – so that the UK can reach net zero while maintaining the long-term health of the public finances.”

In response, the Transport Select Committee decided in February 2022 that it was in favour of the introduction of a road pricing scheme. However, nothing has been done about introducing such a scheme yet. 

What will cause the road tax shortfall?

The shortfall due to be filled by proposed road charging schemes has been caused in part by fuel duty, which has been frozen for the past 12 years. Fuel duty accounts for roughly half the amount we pay for petrol and diesel at the pumps, and fuel sales generate around £28bn a year for the Treasury. 

However, as one of 195 countries to sign the 2015 Paris Agreement on combating climate change, the Government has a target of achieving net zero greenhouse gas emissions by 2050, and the banning of sales of new petrol and diesel cars is part of that ambition. 

The other, smaller chunk of cash that could be lost comes from vehicle excise duty (VED), also known as road tax. It raises around £6.5bn for the Treasury, and a large proportion of this money comes from first-year VED rates for more polluting vehicles.

First-year VED rates are based on CO2 emissions; they currently range from zero for pure EVs with no tailpipe emissions to £2745 for those with CO2 emissions of 255g/km or more. VED rates for greener vehicles will rise over time to fill the void. However, even when rates for greener vehicles rise, they might not be enough to cover the shortfall – indeed, it is estimated that abolishing the road tax exemption for electric cars from 2025 will raise less than £1.6 billion by 2027/28.

What's happening in other countries?

In Norway, where large tax incentives have encouraged the take-up of electric cars such as Tesla Model 3, efforts to fill the tax shortfall are already in place. A new motor insurance tax has replaced road tax in the Scandinavian country, costing electric car owners around 59 pence a day instead of their previous rate of zero. 

Singapore introduced its own road charging scheme in 2009, using sensors mounted on overhead gantries which communicated with a small computer inside each car. Drivers inserted a prepaid card into a unit in their car to pay the charges, which fluctuate depending on the time of day. The London congestion charge zone is said to have been inspired by the system.

While raising the cost of road tax in the UK could alleviate the strain on the coffers of going electric to some extent, it will be a lot trickier to replace the fuel duty that will be lost as sales of EVs overtake fossil fuel-powered cars.

“Fuel duty has one major benefit in that it’s unavoidable, because it’s levied on every litre of petrol and diesel sold, with the added benefit of requiring no interaction with drivers whatsoever,” said an RAC spokesperson. 

“Any replacement for it must have the flexibility to charge drivers of the most polluting vehicles an appropriate amount while – for the moment – still being able to incentivise drivers to switch to zero-emissions vehicles. Crucially, it must be able to tax every vehicle fairly, including zero-emissions ones, for their use of the roads.”

So far in 2024, purely electric vehicles have represented 17% of total car sales, having sold 194,431 units up until the end of July. In the same period in 2023, sales of electric cars represented 16% of the market.

Pay per mile road charging

The RAC believes the most logical solution is to base any road usage charges on the number of miles vehicles are driven. AA president Edmund King agrees. In fact, in 2017 he helped to draw up a strategy for road pricing called Road Miles, which is based on giving all drivers 3000 free miles every year and then charging around 1p for every subsequent mile. 

The 3000-mile limit is enough to provide free transport for elderly and disabled drivers, who average fewer miles than this per year. While those living in urban areas tend to drive less than 3000 miles a year, rural dwellers average more miles, so they would get 4000 free miles. 

King claims that if fuel duty was reduced by 20% in the first year and a fee of 1p per mile introduced, on average all motorists would be paying 4% less a year than they are at present. Additional funds for the Government would be raised by the introduction of higher cost per mile prices for vehicles being used in cities at peak times, along with a Road Miles lottery and road sponsorship opportunities for businesses.

Changing attitudes to road pricing

The AA and the RAC aren't alone in thinking that now could be the right time to introduce road pricing. Although the new Labour Government has neither confirmed nor denied that it plans to introduce road pricing, there is a widespread expectation that it will do so. 

When he was Chancellor, ex-Prime Minister Rishi Sunak was also said to be keen on the idea. However, putting tolls on roads and other similar forms of taxing drivers have proved almost universally unpopular in the past. 

In 2007, the Government proposed a fee of 1.5p to 2p per mile for motorists depending on the time of day they were driving, but it was shelved after an online petition against it received 1.8 million signatures.

The coronavirus pandemic changed opinions, though, with people enjoying being able to walk around the relatively empty streets of big cities and towns during lockdown. This shift was confirmed by a poll carried out by Ipsos MORI in 2007 asking people if they would support “the introduction of schemes involving charging motorists a fee for driving in and around towns and city centres if they are designed to reduce traffic congestion and improve the local environment – for example, by reducing emissions – or to raise revenue to invest in transport”. 

More than three-quarters (77%) ‘opposed’ or ‘slightly opposed’ the idea. However, when the same question was asked in 2020, 62% supported it. In a second survey, 64% approved of the idea of using the money raised to improve public transport. 

While it is possible in theory that money raised from road pricing could be used to improve public transport and the roads, it would mean a shift away from the way fuel duty is currently spent. Although the money raised by VED has been used to fund the Major Roads Network since 2020, fuel duty has never been ring-fenced for any particular use. 

Ipsos MORI research director Ben Marshall says: “Road pricing may be inevitable, but if it is to avoid becoming a ‘poll tax on wheels’, it needs to make sense to the public emotionally as well as rationally. That means solving more than a Treasury problem; it means delivering tangible social benefits as well as fiscal ones.” 

What new road toll schemes are planned? 

While most stretches of the road in the UK are free to drive on, there are a number of toll roads and congestion zones. 

London already has a Congestion Charge and a toll route at Dartford, and it will gain two more toll road sections in 2025. From the spring of that year, most drivers using London's Blackwall Tunnel will have to pay a daily charge. It’s a move that could lead to wider road pricing measures.

Charging will start alongside the opening of the Silvertown Tunnel – a new 0.8-mile tunnel connecting Royal Victoria in London's East End to North Greenwich on the south side of the Thames. Due to the proximity of the Blackwall and Silvertown Tunnels, a £4 (peak hours) fee per crossing will be charged for both tunnels to prevent one from becoming busier than the other. 

Under the plans, most drivers will have to pay the extra charge, as well as the Congestion Charge, which costs £15 a day, and is expanding from January 2025 to include pure electric models, as well as hybrids and petrol and diesel cars. 

Drivers of older, more polluting vehicles will also have to pay the Ultra Low Emission Zone (ULEZ), which now covers the entire Greater London area, taking the daily fee up to £38 for a driver travelling at peak hours. 

At present, an eight-week consultation is in the field to gather people’s opinions on the level of discounts, which are being offered to some, including small businesses and low-income drivers.  

According to Transport for London data, an average of 100,000 cars use the Blackwall Tunnel each day. Funds raised from the tolls for use of the Blackwall and Silvertown Tunnels are expected to be used for maintenance, and for managing traffic levels.

What other toll roads are there in the UK? 

There were 15 road tolls in the UK, but three bridge crossings have been made free, so now there are only 12 sections of payable road. They are the Batheaston Bridge, Cleddau Bridge, Dartford Toll, Humber Bridge, Itchen Bridge, London Congestion Charge, M6 Toll road, Mersey Gateway, Mersey Tunnels, Tamar Bridge and the Tyne Tunnel. 

That’s a stark contrast to other nearby countries, such as France, which has more than 90 toll roads, covering 76% of its motorway network. So it’s clear to see there is scope for introducing some sort of charging.  

Like many other European cities the UK also has 12 regional Clean Air Zones in urban areas in England and Scotland, some of which charge fees for more polluting vehicles. 

What are the next steps for road pricing?

Despite the move to start charging motorists to use the Blackwall and Silvertown Tunnels, the Government has made no announcements about implementing road charging on a wider scale. So, our advice would be to consider choosing an electric car if one suits you, and to enjoy the tax benefits that such cars enjoy while you still can.

Frequently asked questions

How would road pricing work in the UK? 

There are a number of options for introducing road pricing in the UK. One would be a national system that would impose higher charges for vehicles travelling on popular stretches of road at peak times. Charging rates could also vary depending on the pollution level of each vehicle, so drivers of those with higher emissions would pay more than those in low emission or pure electric models. 

In practical terms, it’s likely that road charging will work by using telematics data from each car to charge drivers according to where they've driven, how long for, and how many miles they've covered.

How much will it cost to use the Blackwall and Silvertown Tunnels? 

The fee for cars travelling outside peak hours (from 10.00-1600 and 19.00-22.00) is £1.50 per journey. 

Transport for London is proposing that charges will apply between 06.00 and 22.00 with a low-peak fee of £1.50 per crossing for all vehicles. However, at peak times (06.00-10.00 northbound) and (16.00-19.00 southbound), from Monday to Friday, car drivers will be charged £4.00 for each crossing. 

A 50% discount will be available to low-income drivers living in east London and the surrounding London boroughs, and a £1 discount will be offered to small businesses and charities. Taxis, wheelchair accessible vehicles, zero emission private hire vehicles, Blue badge holders and NHS staff and patients won’t have to pay the charge. 

To ease the financial burden on motorists, free cross-river bus and DLR travel will be offered to local residents for at least a year, and there will be a free shuttle-bus service for cyclists. 

What is the most expensive toll route in the UK? 

The M6 toll road is currently the priciest toll scheme in the UK, with a fee of £9.70 for travelling along the entire, three zone, length of the toll road in a car. If you have a Breeze account you get a discount of 80p. 

The toll road operates between Coleshill (junction 4a) and Wolverhampton (junction 11) on the M6 in the Midlands. 

You can avoid using the roll road by staying on the M6 motorway instead and using the M24 if you’re travelling south, or the A5 and A452 if you’re going north. 

About the author 

Claire Evans has been a motoring journalist for more than 30 years, working on consumer issues for a great deal of that time. After a stint as the advice columnist for Carweek magazine in the 1990s, she also spent six years working on motoring content for Which?. It is here she oversaw the running of the charity's annual used car reliability survey.

Claire launched the What Car? Reliability Survey in 2017; since then it has helped thousands of buyers to choose the most reliable new cars and SUVs, as well as the most dependable used cars.

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