Graduate's plan to axe fuel tax and vehicle excise duty wins £250,000 prize

A plan to scrap fuel duty and vehicle excise duty has won a competition to fund more investment in UK roads and produce a better deal for drivers.

UCL graduate Gergely Raccuja scooped the £250,000 prize offered by Next chief executive Lord Wolfson for his idea to replace the taxes with a distance-based charge.

Using cleaner vehicles would be encouraged as they would be liable for a lower per-mile charge under the scheme.

The money would be collected by insurers who already manage all the data required for calculating the bill, according to Mr Raccuja.

The 27-year-old, who was born in Budapest and moved to the UK in 2011, said the Office of Rail and Road would guarantee drivers are treated fairly by setting the base charge, and ensure a reasonable proportion of the proceeds are ring-fenced for spending on highways.

He pledged a "pothole-free Britain" within five years if his plan is given the go-ahead.

Competition entries were judged by a panel including former chancellor Lord Darling and Legal & General chairman Sir John Kingman.

Fuel duty costs 58 pence per litre of petrol and diesel while vehicle excise duty can be as much as £2,000 for the first year that the most polluting new cars are registered.

Mr Raccuja, who received input from motoring research charity the RAC Foundation for his final submission, said the key to his entry was to "keep things simple" but come up with a solution that was "sophisticated enough to deal with an upheaval in cars and road transport which hasn't been seen since the introduction of the motor car".

Lord Wolfson said: "The 2017 Wolfson Economics Prize sought a better way to pay for better roads, as congestion, pollution and potholes remain a source of daily misery for millions of people, undermining our economy, environment and quality of life.

"Gergely's entry met that challenge, and is groundbreaking, yet simple - with the backing of a major motoring organisation."

RAC Foundation director Steve Gooding said: "Even if policy makers aren't immediately persuaded by our arguments, they know the clock is ticking for them to show they have got a plan that offers the country's tens of millions of drivers a fair deal and keeps the country moving in increasingly challenging times."