Road pricing

[NUKe]

http://www.bbc.co.uk/news/business-42792813

[NUKe]

I posted this because it poses a number of interesting points. This is very similar to the system that the last labour government proposed of pricing to try and smooth congestion, force people onto the right roads etc. But it also goes into what I suspected was the real reasons at the time. They didn't know how to raise revenue if zero emission vehicles become popular and revenues from VEd and Fuel duty fall. but it raises some interesting points for instance should People be charged differently, The article outlines 2 groups that might get different treatment Students and Pensioners, the obvious inference is these groups should be charged less,
The article also blames car sharing and use of public transport for loss of revenue, but I would guess that who ever authored the report, Didn't factor in the reduction in costs of congestion that these people help avoid.

[Graham]

The current setup is congruent with extraordinary motorist privilege which they have sought to defend & extend over the decades.

i.e. Take the personal benefits : externalise / socialise the costs.

This is going to be extremely difficult to reverse. Now so deeply ingrained in the culture. Very voter sensitive.

[thirdcrank]

Association for Consultancy and Engineering [ACE] represents the interests of professional consultancies and engineering companies, large and small, operating within the built and natural environment. ACE members are engaged at every stage with the development of social and economic infrastructure both in the UK and overseas.

https://www.acenet.co.uk/home/592
No suggestion of an axe to grind, then.

Early risers will have heard our CEO @DrNelsonO on @BBCr4today this morning talking about our new report Funding Roads for the Future. Listen again to the interview at 23:49 in. #FundingRoads
http://www.
bbc.co.uk/programmes/b09
nrsb4
…

I don't know if I can sit up till 11-50pm for that, especially as I turn into a pumpkin at midnight ....

[Psamathe]

....They didn't know how to raise revenue if zero emission vehicles become popular and revenues from VEd and Fuel duty fall.....

Put the tax onto petrol. That way highest road users/less efficient vehicles pay more (reflecting their use and pollution).

Ian

[Wanlock Dod]

It has been much more politically palatable to spend a quarter of a century normalising traffic congestion than to address the problem. It does seem a very motor-centric view that doesn't see ever increasing congestion as an incentive not to drive, as it seems to be the main thing that concerns people when they want to travel somewhere in the UK.

[Nigel]

....They didn't know how to raise revenue if zero emission vehicles become popular and revenues from VEd and Fuel duty fall.....

Put the tax onto petrol. That way highest road users/less efficient vehicles pay more (reflecting their use and pollution).

"zero emissions vehicles .... and revenues from ... Fuel Duty fall".

The problem with "just tax petrol" is the electric car, which is on its way to being cost-effective (looking at rate of battery development, I think it will be cost-effective for many in about five years).



I suggest one ends up with road charging as the only reasonably fair option. Amount of "fairness" depends on the horribly complicated details how the charges are constructed.



- Nigel

[Psamathe]

....They didn't know how to raise revenue if zero emission vehicles become popular and revenues from VEd and Fuel duty fall.....

Put the tax onto petrol. That way highest road users/less efficient vehicles pay more (reflecting their use and pollution).

"zero emissions vehicles .... and revenues from ... Fuel Duty fall".

The problem with "just tax petrol" is the electric car, which is on its way to being cost-effective (looking at rate of battery development, I think it will be cost-effective for many in about five years).

I suggest one ends up with road charging as the only reasonably fair option. Amount of "fairness" depends on the horribly complicated details how the charges are constructed.

- Nigel

To me, using motor vehicles represents a lot of climate damage and local air pollution so we have to discourage their use or to ensure individuals pay for the damage. So taxing fuel is a good way to achieve that (more use and/or lower efficiency=more damage=more expensive to do).

I see the tax revenue as a separate matter. Government has a responsibility to provide pubic services (e.g. NHS, Police, pensions, benefits, roads, etc.) so for me it becomes a matter as to how the government should raise revenue to pay for what it must provide which is not necessarily related to use of any particular service. So increase the tax on petrol/diesel more to discourage it's use than raise revenue. Then as a separate matter decide who should be paying more tax (e.g. should we be letting big corporates off paying £billions they owe the government). I'd probably argue about higher taxation for those on higher incomes together with fewer loopholes for the wealthy/companies. But I see that as a separate question from maintaining a given level of income from road transport.

After all, when the government is looking to e.g. reduce Corporation Tax, they don't look for other ways to tax those companies to make-up for the shortfall in revenue. They look to raise taxes elsewhere in unrelated areas.

And as electric vehicles become more common the government needs to look at the impact they have and to tax/discourage appropriately, although I suspect that such steps would be at least "once removed" targeting polluting electricity generation.

Ian

[kwackers]

To me, using motor vehicles represents a lot of climate damage and local air pollution so we have to discourage their use or to ensure individuals pay for the damage. So taxing fuel is a good way to achieve that (more use and/or lower efficiency=more damage=more expensive to do).

I think it might be more complicated than you think.

To avoid inflationary effects on goods and services you can assume the tax cost of running a lorry remains roughly the same. A typical lorry does around 100k a year, 4-6mpg (fully laden) call it 20,000 gallons. Current tax is around £2k so that's a tax of about 10p per gallon.
I doubt 10p per gallon would have any worthwhile impact on the sorts of cars. In fact a lot of very large 4x4's do few miles and for some folk the prestige of having one on the drive and the lowish miles they do would make fuel tax a cost worth paying.
It may well be the case you end up with more pollution rather than less as the cost of running big but low mileage cars make them more attractive than small economical cars.

For cars the typical mileage is around 10k, I guess an average mpg is around 40, that's 250 gallons. To get the £140 a year you'd need nearer 60p a gallon, or for expensive cars nearer £2 a gallon.

Then there are vans and other light commercials. Same problems apply with the added bonus that some commercials make half decent family vehicles - you see a lot of pickups that never have anything dirty in the back and are bought simply because they can be run through a ltd company as an asset and with no VAT.

If you want to discourage car use an annual lump sum is a far more effective deterant (even if it's the same as the spread out cost on petrol).

[pwa]

....They didn't know how to raise revenue if zero emission vehicles become popular and revenues from VEd and Fuel duty fall.....

Put the tax onto petrol. That way highest road users/less efficient vehicles pay more (reflecting their use and pollution).

Ian

I've always thought that. Presumably they are now too worried about drivers of very low emission cars getting away with paying too little to fill the coffers. But I'd prefer any system that encouraged people who are going to use a car to use the smallest and most efficient they can make do with. All the tax on fuel would be extremely simple to implement and collect, correlate closely to pollution and encourage drivers to keep the miles down.

[Psamathe]

To me, using motor vehicles represents a lot of climate damage and local air pollution so we have to discourage their use or to ensure individuals pay for the damage. So taxing fuel is a good way to achieve that (more use and/or lower efficiency=more damage=more expensive to do).

I think it might be more complicated than you think.

To avoid inflationary effects on goods and services you can assume the tax cost of running a lorry remains roughly the same. A typical lorry does around 100k a year, 4-6mpg (fully laden) call it 20,000 gallons. Current tax is around £2k so that's a tax of about 10p per gallon.
I doubt 10p per gallon would have any worthwhile impact on the sorts of cars. In fact a lot of very large 4x4's do few miles and for some folk the prestige of having one on the drive and the lowish miles they do would make fuel tax a cost worth paying.
It may well be the case you end up with more pollution rather than less as the cost of running big but low mileage cars make them more attractive than small economical cars.

For cars the typical mileage is around 10k, I guess an average mpg is around 40, that's 250 gallons. To get the £140 a year you'd need nearer 60p a gallon, or for expensive cars nearer £2 a gallon.

Then there are vans and other light commercials. Same problems apply with the added bonus that some commercials make half decent family vehicles - you see a lot of pickups that never have anything dirty in the back and are bought simply because they can be run through a ltd company as an asset and with no VAT.

If you want to discourage car use an annual lump sum is a far more effective deterant (even if it's the same as the spread out cost on petrol).

Re: "I think it might be more complicated than you think." - I'm sure it is, which is why we have highly paid people to sort out these things - except they end-up just providing the loopholes to allow the wealthy to get away without paying tax!

Details as to how to achieve desired aims - I've very open to alternatives. But I feel
a. That the aims should be to discourage vehicle use rather than regard it as a revenue source
b. That a flat fee would not discourage people from use - if you pay the same for 10 miles or 100 miles then little pressure not to do the 100 miles. In practice (given we pay for petrol/service/etc.) it comes to the extent to which costs relate to mileage/use or to ownership. I'd rather it were cheaper to leave the car sitting on your driveway. Cars are necessary for many (myself included) so I doubt we'd have much success at discouraging car ownership. What I'm keener on is discouraging car use i.e. not making those unnecessary trips in the car and using alternative or shared transport where/when possible.

I don't object to some macho symbol sitting on a driveway if it just sits there (and is rarely used) (ignoring the pollution from construction and end of life recycling). Does not generate much pollution sitting on a driveway going nowhere.

I agree with your point about commercial use for necessary transport of goods. I'd hope these highly paid experts can come up with means to allow such companies to reclaim tax to offset other changes. But that commercial use would need to be very limited such as to avoid the daft driving across the country to meetings that could be held over video link (often in my working days as we were driving Oxford to Manchester I imagined similarly qualified people driving Manchester to Oxford for similar meetings - daft, inefficient, wasteful, etc.).

But I do accept my current thoughts might have unintended consequences. Maybe my main point is that policy needs to be targeted at discouraging vehicle use rather than revenue generation (which seems a major concern from the report starting this thread).

Ian

[NUKe]

You all seem to becoming at this from the side of Pollution, which is fine, but the government has real issue looming, we are already changing our habits, according to this article, people are switching to greener cars, electric and electric hybrid,lift sharing and using public transport. ( I am not sure this is a big impact the moment) but lets agree it is for the sake of this discussion. Here is the issue which the government faces revenues will fall if users change their habits. The use of motor vehicles puts substantial money into the government purse, if this starts to fall, the Government has less revenue, so they we will need to find ways to tax people who up until now it has seen fit to exclude from taxation. If the Government does not find ways to tax motor vehicle use we will end funding more through general taxation (which may be the model people prefer.

Electric cars are an excellent case in point. Whilst they are virtually pollution free at the point of use. they still consume the same road space as there fossil fuel counterparts, contributing to congestion,and cause the same amount of wear and tear on the roads. they will need the same emergency services in the event of an accident. So whilst they help solve inner city pollution, they have a cost to the road system which the government has chosen to ignore at this point in time, largely to promote there use to meet pollution targets. but at some point they will need taxing you have problems taxing electricity to the extent that we tax petrol in that it is difficult to determine what is used for home consumption and what is pumped into the vehicle. This not withstanding the infrastructure charges that will need to be put in place for charging.

[irc]

For cars the typical mileage is around 10k, I guess an average mpg is around 40, that's 250 gallons. To get the £140 a year you'd need nearer 60p a gallon

Seems fair enough. Bearing in mind drivers currently shell out £140 in a lump sum once a year then paying an extra 10% or so on fuel over the whole year shouldn't be an issue. If more expensive fuel discourages some journeys then that is a win. Likewise if higher fuel prices encourage smaller and/or more efficient cars that is another win.

However if abolishing VED isn't an option plan B will be putting the same £140 VED on electric cars. There is nothing that means they are going to be subsidised forever.

[irc]

Electric cars are an excellent case in point. Whilst they are virtually pollution free at the point of use.

They aren't.

Electric vehicles emit no NO2 but do produce small particle pollution from the wear on brake discs and tyres and by throwing up dust from roads. A recent European commission research paper found that about half of all particulate matter comes from these sources.

https://www.theguardian.com/environment ... rank-kelly

[Psamathe]

You all seem to becoming at this from the side of Pollution, which is fine, but the government has real issue looming, we are already changing our habits, according to this article, people are switching to greener cars, electric and electric hybrid,lift sharing and using public transport. ( I am not sure this is a big impact the moment) but lets agree it is for the sake of this discussion. Here is the issue which the government faces revenues will fall if users change their habits. The use of motor vehicles puts substantial money into the government purse, if this starts to fall, the Government has less revenue, so they we will need to find ways to tax people who up until now it has seen fit to exclude from taxation. If the Government does not find ways to tax motor vehicle use we will end funding more through general taxation (which may be the model people prefer.......

Taxation revenue from different sources is always fluctuating, some sources generating increasing revenue, others less.

I don't see "... so they we will need to find ways to tax people who up until now it has seen fit to exclude from taxation." - they could always decide not to reduce corporation tax or to increase the higher band of taxation or many other possibilities that don't affect the lower income groups.

I consider VED as just another revenue source for the government (just like NI, income tax, VAT, customs duty, etc.). I thus consider motor transport already funded through general taxation so to me it's down to where the government is getting it's revenue from.

Ian