Wednesday, 27 June 2012

Paying for travel

There's a lot of debate going on in the UK over the fact that the Chancellor of  the Exchequer (isn't that a wonderfully archaic term when you actually look at the words) has announced that he is not going to increase petrol duty by 3p from August, putting it off to January at least.

Leaving aside the political insults flying about U-turns (get a grip politicians! When are you going to realise that admitting a mistake or the need for change is a good thing?), it has been useful in exposing the debate on what we should do to tax driving. There are two broad needs, to raise revenue (in principle, though not explicitly to pay for the road network and secondary costs thereof) and to discourage use of fossil fuels/high carbon emission activities/pollution.

At the moment there are two weapons in the government's armoury. There is an annual car tax (formerly known as road fund licence), and there is fuel tax. The annual tax is ridiculous. Although it has gradations for emissions, it is still a tax that gets cheaper per mile the more you drive. It is totally counter-functional and ought to be dropped immediately.

As for fuel duty, while it is proportional to the amount you drive and how much of a gas guzzler your car is, it is very heavy handed because it applies equally to someone driving through a crowded, polluted city with a superb public transport system and someone driving in the depths of Cornwall, where the car is an absolute lifeline, the nearest shop is 10 miles away and there is practically no public transport system.

I heard on the radio the other day a Labour person saying what we really needed to do was to go back to the idea of a road pricing scheme, which would monitor exactly where you are driving and charge you accordingly, something the previous government was interested in, but that was squashed because of a ridiculously biassed campaign against it resulting in a huge anti-petition, based much more on emotion than logic.

The trouble is, the Labour plan is also a disaster. It requires far too much technology to work, needing every car to be fitted with a tracking device, and a vast computer system to monitor and collect movement data. It is also hugely Big Brotheresque. There has to be a better way. And there is. Here's Brian's cunning plan to sort out this mess:

  1. Dispose of car tax immediately. This will lose some revenue, though not as much as you might thing as it's quite expensive to administer. If necessary slap on a bit of extra fuel duty.
  2. Find a workable way of doing road pricing. The most important thing is that it should be passive - active systems, requiring technology in the car, are too complex and costly. I'd suggest doing it only on motorways, major trunk roads and in cities to keep costs down, using a camera system like the London congestion charge.
  3. Once you have the road pricing system, remove the fuel tax entirely.
  4. If a load of people whinge about it in a petition, ignore them. You can't always be popular. But if you make it clear that petrol prices will drop by around 70p a litre, people may be more enthusiastic.
Successive governments have been too timid about this. Get your act together, guys.

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