Cars users get raw deal relative to rail

New research published today has exposed the scale of the raw deal that car users get from the government.

The study into government spending on road and rail infrastructure when compared per passenger kilometre reveals that for every £1 of public money spent on roads, a massive £10 is spent on rail services.

That spending on rail outnumbers spending on roads by a factor of ten to one when actual usage is taken into account is particularly unfair given the huge amounts of tax paid by car users every year.

The study estimates the motorists' tax burden at over £30bn a year - increasing all the time.

Even this figure only takes fuel duty and road tax bills into account, yet is still £18.4 billion more than the combined total cost of road spending and road transport greenhouse gas emissions.

Credible comparison

The conclusions of the study, which was produced jointly by the Drivers' Alliance and the TaxPayers' Alliance, were based on total spending in 2007/08 of £8.2bn on rail and £8.3bn on roads.

While those two figures are roughly similar, campaigners say 59 billion passenger kilometres were travelled by rail in that period, compared with 749 billion by road.

The use of passenger kilometres means both the number of people travelling and the distance of their journeys are taken into account, to accurately reflect how each mode of transport contributes to keeping Britain moving.

Not even green

Such a disparity in spending cannot even be justified on environmental grounds, since a rail industry report concluded that it can often be greener to travel by car than catch a train.

The Rail Safety and Standards Board study confirmed that a journey by a family of three would produce half the emissions if travelled by car than by modern diesel train.

Peter Roberts, Chief Executive at the Drivers’ Alliance, said: "We desperately need to prioritise roads before rail if congestion is to be tackled.

"Adding road capacity is cost effective and provides genuine savings in journey times for the majority of individuals, goods and services.

"Spending vast sums of drivers' taxes on extravagant rail projects will not address the immediate transport problems we have in the UK.”

Funding switch

The time has come for the government to drop the tired old dogma of treating car users like cash cows and giving very little in return - especially splashing the vast sums that car users pay in tax on far less efficient and less environmentally-friendly forms of travel.

Huge sums being sunk into the railways must be rebalanced back towards the far better investment of road infrastructure instead.

With public spending cuts looming large on the political agenda, this study clearly shows that it is cuts in rail expenditure that should come before chopping road improvement projects.

Government to review car tax plan

Following the revelation yesterday that the Prime Minister 'mis-spoke' when he said in Parliament that the majority of drivers would benefit from proposed car tax changes, Chancellor Alistair Darling has appeared in Parliament this morning to answer questions about the plans.

Finally confirming what other ministers and backbench MPs had already been pushing for, he indicated that the plan will be reviewed before the Pre-Budget Report, due in the Autumn.

Official estimates given yesterday to Conservative shadow Treasury minister Justine Greening in a Parliamentary answer revealed that vehicle excise duty will rise for 44% of vehicles made since 2001 - by up to £245 for the most polluting ones - but will fall for 33%.

An estimated nine million car users would have to pay more under the reforms.

Answering for the Treasury, Angela Eagle MP also admitted that five of the UK's 30 most popular cars would pay more.

So if you drive a 2.2l diesel Land Rover Freelander, a 1.6l unleaded Toyota Auris, a 2.2l diesel Honda CR-V, a 1.8l unleaded Vauxhall Vectra or a 1.6l unleaded Vauxhall Zafira, prepare for a wallet-bashing.

Most interestingly, the government's difficulties with getting the plan through Parliament seem to be greater than first envisaged.

Complaints from Labour backbenchers don't just seem to relate to the backdating of the changes to older cars made after March 2001 - thought to be the most contentious part of the proposals.

Speaking on the BBC News channel, Martin Salter - far from among the most rebellious of Labour MPs - complained that even "two years" was not enough time to give people a chance to change their car-buying behaviour.

This would suggest that the government faces problems getting the proposals through Parliament if they make the changes applicable to anything other than brand new cars.

But then, that would mean people are given a chance to dodge the higher charges by making alternative choices, and make the proposals actually 'green' - rather than the great fundraiser for the Treasury that they are actually designed to be.

What a dilemma, Darling!

Revolt looms over car tax hike

The number of Labour backbenchers supporting a parliamentary motion urging the government to reconsider massive increases to car tax has reached 45.

With the government only having a majority of 66, the number of rebels is now more than enough to block the scheme - if they vote in accordance with their views when it comes to the crunch.

It only takes 34 Labour MPs to vote with the opposition parties to thwart government plans.

Some rebels are likely to be bought off if the Chancellor Alistair Darling abandons plans to make the changes retrospective to cars made since 2001.

However, even the scale of the increases for very average mid-range cars made since March 2006 is likely to trigger widespread public dismay.

MPs fear the scheme could be as politically damaging as the storm over the abolition of the 10p income tax band, and even two ministers - Justice Secretary Jack Straw and Business Secretary John Hutton - have indicated that there should be a re-think.

Owners of typical family cars such as the Ford Galaxy, Vauxhall Zafira and Renault Espace will face an increase in duty of up to £245 by 2010.

Ronnie Campbell, the Blyth Valley MP who tabled the motion, said: "It's unfair that people bought their cars a few years ago not knowing that the government were going to put this road tax on.

"When you think that the 10p (tax abolition) was costing people £200 a year; the outbreak of that one was enormous. When people get their road-tax letter through the door next year and find they have an extra £200 to pay, well, I don't have to say any more, do I?"

Another signatory to the Commons motion, Angus MacNeil, SNP MP for Na h-Eileanan an Iar, said it was clear, as we have been saying since the scheme was announced, that the increase in VED had not been thought through and that Mr Darling had taken a sledgehammer to the issue.

He told The Herald: "It's going to be like the 10p tax: sooner or later they will have to do a U-turn."

In total, 62 MPs have signed the motion, with 9 Conservatives, 7 Liberal Democrats and one SNP MP joining the Labour rebels.

While such Early Day Motions have little real power, they are influential in indicating backbench opinion on a policy before it comes to a key vote in Parliament.

The government's Finance Bill incorporating the plans to is due for further consideration in Parliament next week.

Car tax row hots up

The debate over plans for a drastic hike in car tax is starting to get interesting, amid increasing fears within government that the revised scheme could prove as politically damaging as the storm over the abolition of the 10p income tax band.

The plans, announced in Alistair Darling's first Budget back in March, will create six additional car tax bands and introduce an up to £950 graduated ‘showroom tax’ on cars in the upper tax bands.

Despite being spun as a 'green' move that will persuade people to buy lower-emission, lower-taxed cars, the Treasury has already admitted that once the revised system is in force more than £700m extra a year will be delivered into the government's coffers.

A very clear indication from the horse's mouth that people will not, in fact, switch to the lower-emissions cars that attract reductions in the tax rate and the scheme is therefore largely useless in 'green' terms (but clearly very useful in government fundraising terms).

No surprise, then, that Chancellor Alistair Darling decided to try to introduce the scheme regardless.

Money or popularity?

Already reeling from severe public slapdowns in recent elections, ministers and MPs are now starting to worry that both the scale of the increases combined with the number of people set to be affected to some degree will be an explosive recipe, capable of triggering a further dramatic slide in the government's popularity.

Justice Secretary Jack Straw and Business Secretary John Hutton have been the first to break ranks with the Prime Minister and his puppet Chancellor to suggest that it may not be the best plan to pile severe extra costs on people right when they're feeling the pinch.

They have hinted that the Autumn pre-Budget statement would be a good opportunity to take a 'fresh look' at the plans.

Backbenchers are also asserting themselves over the issue, with 35 Labour MPs (and others to make 42 in total) so far having backed a Commons motion by Ronnie Campbell MP urging ministers to reconsider.

Retrospective tax on older cars

A particular target for review is the most controversial element of the scheme - to impose tax at the new highest rate retrospectively to cars bought between 2001 and 2006.

A host of family cars bought before March 2006, many used everyday for the school run, will see their road tax double from £210 to more than £430 unless the plans are changed.

This double-whammy aspect of the scheme will hit those who bought cars in good faith a few years ago, not knowing the government would drastically increase the road tax on them. And make it harder for those people to switch to lower-emissions cars, as the new excessively punitive tax rate will severely cut their existing car's value.

Good time for pause

Given his already pretty significant woes, and the growing controversy over out-of-control fuel prices, does Gordon Brown really want to further wind up 18m 'middle Britain' car users?

As the 'consensus' over climate change is brought ever further into doubt by severe wintery conditions across the globe and growing lists of scientists contradicting the man-made global warming orthodoxy, now would be the perfect time for Brown to demonstrate responsible leadership and pause for a re-think.

'Green' car tax changes a fundraiser, Treasury admits

Whoops, what a giveaway! And how often is that said on the day after Budget day?

But buried in the small print of yesterday's Budget was an official admission that changes to the car tax system, being spun as having 'green' objectives, will in fact be a healthy fundraiser for the Treasury.

The Treasury has said that by 2010-11, when the six additional car tax bands and the up to £950 graduated ‘showroom tax’ on cars in the upper tax bands come into force, higher vehicle excise duties will be delivering an extra £735m to the government’s coffers.

When the tax on lower emissions cars is also set to go down, the fact that tax income is projected to increase by such a huge amount rather indicates that Alistair Darling himself knows that the changes will not remotely encourage people to switch to less polluting cars.

Probably because, as we all know, many people actually need larger cars to accommodate their families and aren’t just driving them out of perversity or for their own entertainment.

So here we have confirmation from the horse's mouth that these car tax changes are not a ‘green’ move at all, but a way of milking more money from the already over-burdened car user. And what a surprise .... they did it anyway!

Coupled with the news that the fuel tax increase (albeit delayed til October) will be contributing an additional £270m to the Treasury by 2010, and that the government will announce the results of its investigations into how to hit car users with yet more bills via road charging next year, it’s no wonder this Budget has been described as 'Darling's war on the family car'.

Lib Dem car tax trap

At their conference this week the Lib Dems achieved an impressive double whammy. They revealed a policy to change the car tax system that's flawed in both principle and practice.

First, they claimed the principle of their policy was to make taxes more 'green', presumably meaning they want to use the tax system to discourage what they see as a climate-changing activity like car use. I say 'presumably', because they actually chose as a target the one motoring cost that doesn't vary whether you use your car once a year or all day every day.

Second, in practice, the policy is apparently intended to discourage people from buying the least fuel-efficient and worst polluting cars. But this fell apart when policy-makers employed some usual enviro-blockhead thinking and clearly only assumed that targetting cars based on emissions would result in them punishing drivers of large cars and therefore the wealthy.

Environmentalists or anti-capitalists?

When will it sink in for these people that a car's emissions output has much more to do with the nature of its engine than its external dimensions. That large cars - and certainly not 4x4s, which are only taller than most average family saloons - are not necessarily the worst polluting.

Of course, some so-called environmentalists refuse to see this reality because their only motivation for their anti-car crusade is that they think it provides an opportunity to have a go at the wealthy. A vocal minority masquerading under green banners is clearly not so much pro-environment as anti-enterprise and its conspicuous benefits.

Even the environmentalist movement should be concerned about this vocal 'red' green lunatic fringe, as their unscientific extremism as exemplified by irrational anti-4x4 campaigns only damages the credibility of those trying to make a case for more pragmatic action to improve our environment.

Will realisation dawn?

Perhaps realisation that they have succumbed to the rhetoric of the lunatic fringe will now dawn as the Lib Dems have tried to turn the unscientific enviro-nut outlook into an actual policy, and it's predictably revealed that far more than only drivers of large cars or 4x4s will be hit by their plans.

Their 'Fairer, Simpler, Greener' tax policy paper shows on page 28 that they actually propose not just the much-hyped £2,000 charge in the top tax Band for the worst polluting cars, but also to massively ramp up car tax for cars emitting more than 165 g/km of CO2 - that's those also in current Bands E and F. Here they want to increase the tax from £150 to £850 for Band E, and from £190 to an astonishing £1500 for Band F.

What do the Lib Dems expect us to drive?

To be fair, some mainstream media outlets like The Times have pointed out - but only in passing - that the real effect of the Lib Dem policy would be to punish the drivers of even average size family cars like the Ford Mondeo.

But it's even worse than that. No doubt Lib Dem members will be dismayed that even some Mini models - surely one of the ultimate city cars - are in Band E and buyers would be hit with the £850 annual punishment. As would buyers of Audi's smallest model - the A3 - even in basic 1.6 litre guise, some models in BMW's smallest range - the
1 series - and large swathes of models across the small to mid-size ranges from many major car-makers.

I mean - what exactly do the Lib Dems expect us to drive? Far from an extra tax on the oft-cited 'wealthy' or from discouraging people from buying 'gas guzzlers', this policy will clearly slam many hundreds of thousands of middle income people wishing to drive normal small and family cars like these.

Tens of thousands out of a job

What's more, many of the luxury and sports car manufacturers who make their products in this country such as Jaguar, Land Rover, Aston Martin and TVR would face a severe threat to their businesses and so the jobs of tens of thousands of people they and their suppliers employ through such excessively punitive charges being slapped on the use of their products. Car dealerships will also go bust as rather than buy new cars with punitive tax rates, people will hang on to their old cars for much longer.

What do the Lib Dems have to say about this likely effect of their new policy to the people whose livelihoods depend on Britain's car industry? Ask them.

A quick glance at the car stats in the back of just one of the car magazines found on any newsagents' shelves would have revealed the true repressive effects of this ridiculous policy and killed it stone dead. Clearly such basic fact-checking was expecting too much from the Lib Dems. Will the embarrassment they're now suffering as a result lead to better research and better policies in future?