A few answers in random order:
1) eye tests are not universally free, although they are free for fairly large segments of the population, including everyone over the age of 60. So for the puposes of this new regulation, no one affected by it will have to pay.
2) yes a large number of people do not have regular eye tests, including those aged over 70.
3) AIUI it will be a routine eye test, not a specific, separate one
4) There will not be evidence that only over 70s drive with poor eyesight. However there is copious evidence that those over 70 are
far more likely to have poor eyesight than the population as a whole, and not just plain old myopia or hypermetropia. Therefore mandating eye tests for those over 70 who wish to drive will address the highest risk category, and screen out a higher proportion of those with poor eyesight than if it applied to the whole population.
5) This will have a significant side benefit, in enabling many people to be diagnosed with eye health issues early, before they become a potentially untreatable or irrecoverable condition. In time this should reduce the proportion of people registered blind by age group over 70.
6) one other issue with growing old is that reaction times get slower. Having poor eyesight
and slower reaction times is self evidently a higher risk than just poor eyesight, all else being equal. (I am not suggesting that young people with poor eyesight are ok to drive, just that the risk that they carry will be lower than the same standard of eyesight on an older person, on average).
7) peripheral vision tests are notoriously unreliable for false poor results. I routinely fail them, but according to my optician friends (including 2 opthalmic surgeons), and six seperate visits to opthalmic consultants, there is nothing wrong with my peripheral vision. (as my kids will testify

)
This regulation is long overdue. In my view it should be aged 60 and two yearly, but then I also think everyone should visit the optician at least every two years. The horror stories I hear from my friends in the industry are just awful.