Pay-as-you-drive car tax tracking: It's on

Transport Secretary Alistair Darling has confirmed the government is looking at introducing a pay-as-you-drive system of road tax, with satellite tracking being Whitehall's preferred way of monitoring the motoring habits of the UK.

In a speech today to the Social Market Foundation Darling said that without such a system - which would see motorists paying between 2p and £1.34p per mile to take to the road - the UK would end up in US-style gridlock.

"One of the options is to start using positioning technology - satellites, in other words - so that we minimise the amount of infrastructure we would have to build at the roadside. We need to think about the equipment needed to calculate what a driver would pay and what information gets to the people who would issue the bills," Darling said.

GPS is also a tasty proposition, Darling added, given the UK's fondness for the cellular data technology is already in evidence. "A lot of this technology is out there being used for commercial purposes... many cars are already fitted with the technology which combines satellite positions with mobile communications," he said.

The Transport Secretary said the Department of Transport will now look at whether the "right technology is available" and if it can be harnessed affordably for the pay-as-you-drive scheme.

The scheme, which is likely to entail installing GPRS tracking equipment in all of the UK's nearly 30 million cars, is likely to present a huge IT challenge for the government, which has a mixed record on the largest of its IT projects.

"Large technology projects are always tough to get right," Darling said, while noting that the scheme will take the duration of many parliaments before the UK's road users find their movements tracked by satellite.

Darling told the Social Market Foundation the scheme will be piloted in the UK, most likely in a city. The decision on where that will happen will be taken in the next two years, with a pilot kicking off in the next five to six years. In the meantime, the department will be grilling the IT industry about what the future of tracking holds.

Darling also gave a nod to allaying privacy fears surrounding the tracking tech, saying: "We need to respect privacy."

Darling did not, however, give any details of how this would be achieved.