The Government is coming under increasing pressure to overhaul Vehicle Excise Duty.
As cars become ever more efficient, the tax taken from fuel duty is plummeting. The latest figures from the Department of Energy and Climate Change show that petrol and diesel sales between April and June were down by nearly half a billion litres compared to the same period last year.
And annual petrol and diesel sales have fallen by around four billion litres from 2007 to 2011 – creating an estimated £2bn black hole in Treasury revenue.
A proposal has been published calling for Vehicle Excise Duty to be replaced with a new car sales tax.
But some Tory and Liberal Democrat MPs believe the solution to the problem is road tolls. Transport Minister Norman Baker has been pushing for road pricing to be included in the Lib Dem manifesto after warning of falling Treasury revenue.
And Andrea Leadsom, Tory MP for South Northamptonshire, has gone on record backing road pricing, saying: “I would certainly support toll roads … Personally I think road pricing is the way forward. I think it is hardly fair that people who only drive around the corner to see their friends pay the same as a travelling salesman.”