Road pricing - down your street soon

A system in which motorists will be billed by the mile for every peak-time journey along a trunk road or through built-up areas will be outlined this week, when Alistair Darling, Secretary of State for Transport, publishes the results of his department's investigations into the technology of road pricing. Mr Darling is also expected to encourage local councils to follow the lead set by London and the City of Durham by charging motorists for driving into congested urban centres, in a combination of reforms that will overturn the way motorists are taxed.

The study, published on Tuesday, is expected to outline a series of models for charging on roads, with charges ranging up to around £1.40 a mile. Motorists would be charged for using trunk roads at peak hours as a way of encouraging them to travel at less busy times.

Mr Darling is expected to placate motorists' organisations by promising that the extra money levied from tolls will be repaid through reduced fuel taxes, which will benefit every car user.

But he will come under pressure tomorrow from a leading think tank not to make any concessions to people who use their cars frequently.

The Institute for Public Policy Research (IPPR) wants congestion charges implemented nationwide. It says the charges could raise £16bn a year, which is more than the Department of Transport's annual budget.

IPPR's pamphlet In the Fast Lane, published tomorrow, warns that a cut in fuel taxes will increase traffic, but to avoid the congestion charges, motorists will crowd on to byways and country lanes.

The authors, Tony Grayling, Nathan Sansom and Julie Foley, suggest that if the motorist is to be given any money, it should be in the form of a cut in excise license duty. The pamphlet also urges insurance companies to follow a Norwich Union pilot scheme in which the cost of motor insurance is proportionate to the number of miles driven.

The CBI will today also call on the Government to spend an extra £70bn on transport over the next 10 years. It has drawn up a wish-list of things it wants Mr Darling to tackle early on, including enabling drivers to use the hard shoulder at peak times, extending rail platforms, encouraging car-sharing and a programme to improve road layouts.