Since trials of the "pay for what you drive" system, being done by Norwich Union, were over-subscribed and such a success that they have decided to use over 100,000 people in the next phase, you can expect that the system is going to be rolled-out in the near future.
It looks like the private sector (insurance) is going to be developing the systems for itself. Then there's TfL, which is having a seperate system developed to replace (or enhance) the number plate one it uses when the present contract runs out in 2009.
You also have the current system running in Germany at the moment, which "tracks" the trucks and charges them for distance and time. That has been working well, and has proven that such a system can be used.
Just why you think that the gov has to run the system I don't know. Privatisation is the name of the game.
Oh, and as a totally different tale, not connected much with motoring, did you know that the sex offences act has been changed ?
People can now be put on the sex offenders register for offences that are not sexual !!
And you thought things could not get worse ?
http://www.homeoffice.gov.uk/about-us/news/expanding-sex-register