The Wardman Wire

A press release from the Greens with a quote from MEP Caroline Lucas, concerning a Green Party policy idea to replace road tax with increased taxes on petrol.

Charging the most polluting vehicles with a flat tax will do nothing but enrage motorists and discredit the aim of green taxes, which is to change behaviour by actively rewarding more environmentally friendly behaviour

Green Party Principal Speaker Caroline Lucas MEP today urged the Government to reward responsible motorists by abolishing the Road Tax, and shift the responsibility onto gas-guzzlers through the fuel duty. The call comes as road lobbyists and lorry drivers stage a slow moving protest through London and Cardiff today against supposed green taxes on motorists that means rising fuel duties as well as a higher annual road tax charge.

I see a couple of problems with that.

So, what’s the problem?

Let’s start with the “Parliamentary Answer” (or rather, half of a Parliamentary answer) quoted by the Greens as the evidence for their policy; the “overall reduction in motoring costs” is used as a justification for a proposal to shift taxation from the road fund license to taxes on fuel.

“The total cost of motoring fell by 4 per cent since 2005 (1), yet the road lobby has consistently argued for more road building, more traffic, more pollution. They have attempted to block every effort to reduce our dependency on petrol. Now the price has inevitably risen, and they want the rest of us to pay for it through our taxes, or in cuts to services. The answer would be to remove the argument about road tax increases in one swipe, and introduce a scheme that rewards those who use less fuel.

1 – Parliamentary answer from Jim Fitzpatrick, Parliamentary Under- Secretary, Department for Transport. www.theyworkforyou.com

Compare that wth the real Parliamentary answer, of which Caroline Lucas only quoted the headline statistic.

The total cost of motoring fell by 4 per cent. from January 2005 to April 2008 in real terms. The total includes the cost of buying cars, fuel, maintenance and insurance. This overall fall was driven largely by the falling costs of car purchase—down by 20 per cent. over this period. The real terms cost of tax and insurance fell by 6 per cent., the cost of maintenance rose by 5 per cent., with the cost of petrol and oil rising by 21 per cent.

Breaking out the numbers for changes in car costs 2005-2008 (real terms)

Car purchase costs, fell by 20%
Tax and insurance, fell by 6%
Maintenance, increase by 5%
Petrol and oil, increased by 21%

Who pays which costs?

The purchase costs of a new car are optional – they can be avoided by buying second hand – and are paid by the relatively well-off people who can afford new cars. The running costs of a car are not optional – you cannot avoid having to buy petrol or pay for the road tax, the insurance or the maintenance. The running costs are paid by everyone.

So the better off are already benefiting from the relative fall in the up front costs compared to the running costs, and the less well off are already under major pressure from the jump in fuel costs.

What will the effect of the Green Policy be?

This is the Green Policy:

“Gordon Brown and Alistair Darling clearly don’t understand the uses and mechanisms of green taxation. Charging the most polluting vehicles with a flat tax will do nothing but enrage motorists and discredit the aim of green taxes, which is to change behaviour by actively rewarding more environmentally friendly behaviour. The flat road tax on vehicle ownership takes no account of road usage, and provides no incentive or reward for making less polluting travel choices.

“A far fairer alternative would be to scrap it altogether and move the responsibility solely onto fuel tax, so that those who choose to drive cars with large engines and are heavy road users will pay considerably more than those who choose to drive smaller, more energy efficient cars and use public transport more often.

The current system of road tax penalises heavily polluting (i.e., low fuel consumption) vehicles by setting (for example) the flat tax rate for a Jaguar X-Type at almost four times that for a Ford Focus Diesel – a far more aggressive differential than that given by the costs merely related to fuel consumption as proposed.

The proposals are actually going to make life easier and cheaper for “gas-guzzlers”.

The Greens style themselves as believing in redistribution:

We accept that there is a limit to the wealth each person can receive, and this is true no matter how much or how little work needs to be done to produce that wealth. Some redistribution of income will be required. What wealth there is must be shared in such a way that everyone has a guarantee of economic security, otherwise people will not heed ecological restraints in their daily lives.

So – the other problem – why is this extra burden proposed by the Green Party on the less well-off at a time they are already under pressure?

What would I do?

I don’t like huge 4×4s where they are not necessary, and on the school run and in cities in general they are an execresence; less economical, less safe for everyone apart from the passengers, and usually unnecessary. Among friends we have a catchphrase: “There go the Tonka-Plonkers” (that’s the polite version). The one justification I see for 4×4s in cities is to negotiate sleeping policemen, which is a touch ironic.

I’d support Road Tax proposals rather more aggressive than the current arrangements, and a corresponding (at least) reduction in tax on fuel. That would in some small measure work against unnecessary 4×4s, but would also start a process of levelling the playing field between British and Continental hauliers.

One other idea fascinates me – and that is the possibility of taxing cars according to their weight, since lightness encourages good engineering, efficient use of materials and reduced fuel consumption all at once. Unfortunately, over the last 20 years we have seen more and more (mainly “safety”) equipment legally mandated in vehicles at a rate which makes weight-reduction difficult.