More than 600,000 vehicles have devices that help drivers to navigate by tracking their movements by satellite. The Department for Transport believes that this information could be used to charge drivers for every mile they travel. The fee would vary according to the level of congestion, with quiet roads costing 2p a mile but the busiest costing £1.30 a mile.
The charges will be offset partly by reductions in fuel duty, but ministers have not ruled out increasing motoring taxes paid by drivers.
Alistair Darling, the Transport Secretary, said that the Government no longer believed that it was necessary to install a separate 'black box' in vehicles to monitor drivers’ movements and collect tolls. Speaking at a London seminar on road tolls, he said: 'We need to move away from the idea that Government is going to define and specify all this modern technology. It will not work that way.
'Instead, we need to start thinking of road-pricing piggybacking on systems already being offered by the market. Drivers who already pay a company for real-time navigational information could use that provider to calculate their road price.'
Darling said that insurance companies could also play a role in introducing tolls on all roads.
He added that using existing systems would protect drivers’ privacy by dispensing with the need for the Government to know their movements.
'People already choose to pass their locations to an insurance or navigational company, in return for a service they value. They trust the companies with that information in a way that they don’t trust governments,' he said.
Darling said that most cars were not yet equipped with black boxes, but that this would change rapidly. Road tolls would be introduced in trial areas on a voluntary basis. He said a national system covering every vehicle would take ten years to introduce, but local pilots could begin far sooner.
A Government study last year indicated that a national system of road tolls would halve congestion and save the economy £12 billion a year.
Darling rejected a proposal from the Institute for Public Policy Research think-tank for higher road tolls for fuel-inefficient vehicles. But Tony Grayling, the institute’s associate director, said that replacing fuel duty with congestion charges would make it much cheaper to drive in rural areas where there was little congestion.
He said if the Government made road tolls revenue - neutral by cutting fuel duty, traffic would rise by seven per cent and carbon dioxide emissions by five per cent. A better alternative would be to use congestion charging to replace vehicle excise duty, already charged at different rates according to emissions.
He said those rates should be maintained to impose higher tolls on less efficient vehicles, with a top rate for the 'worst gas guzzlers'.