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news
George OsborneRoad tax is back – Chancellor announces Vehicle Excise Duty reforms that will see money raised reserved for road improvements
It seems there really is a road tax again. In his seventh Budget as chancellor – the first Conservative Budget in 19 years – George Osborne has announced reforms to Vehicle Excise Duty which will see money raised earmarked for road network improvements.
Osborne said:
“I will return this tax to the use for which it was originally intended. I am creating a new roads fund from the end of this decade – every single penny raised from VED in England will go into that fund to pay for that sustained investment our roads so badly need.”
Road tax was abolished in 1937 and replaced by Vehicle Excise Duty, the proceeds of which have up until now gone into the general Treasury fund. References to "road tax" are of course often made by drivers as a means of suggesting they have more right to the roads than cyclists (or indeed than pedestrians or horse riders).
A new system of Vehicle Excise Duty will be brought in for new cars from 2017 and while no extra revenue will be raised, the Chancellor claims it will be "more secure". It will be emissions-based in the first year, after which there will be three levels – zero emission, standard and premium. Around 95 per cent of vehicles are expected to fall into the standard category, which will cost £140 a year.
Under the new system, cars emitting 0g/km CO2 will pay nothing – the same as a cyclist. Or at least it would be the same as a cyclist if a 2010 study hadn’t found that the people who cycle the most are likely to own at least two cars. Cars with a list price above £40,000 will attract a supplement of £310 per year for the first five years in which the standard rate is paid
The Chancellor also froze fuel duty for the rest of the year.
CTC is concerned that today’s announcements could effectively create a 'road fund' and lead to calls for a similar tax on cyclists to pay for the Cycling and Walking Investment Strategy. The original 'Road Fund' was abolished in 1937 thanks to opposition from Chancellor Winston Churchill who argued that spending motor taxes only on roads would lead to motorists assuming a 'moral ownership' of them.
Roger Geffen MBE, Policy and Campaigns Director at CTC, the national cycling charity, said:
"George Osborne has today reversed Winston Churchill's most sensible transport decision. Given this, it is therefore a relief that Parliament and the Prime Minister are already committed to cycling investment, and to 'cycle-proof' all road and traffic schemes to ensure cycling is properly designed into them from the outset.
"However, CTC still believes this is a doubly regressive policy, raising more tax from cleaner cars to build more roads, when councils are struggling to maintain the ones we’ve got. And we still want to know how much the Government will allocate to the promised Cycling and Walking Investment Strategy, and when they will confirm this.”
Jason Torrance, policy director at Sustrans, commented:
"Vehicle Excise Duty is a tax on pollution: those cars which create the most greenhouse gases are taxed most heavily. Siphoning that revenue into a new Roads Fund will inevitably lead to further pollution and undermines its original purpose.
"Over this parliament alone £15bn will be spent on new roads. Research proves that creating more road capacity will lead to increased demand, and therefore more miles driven.
“The Chancellor has kept the tax on fuel frozen at 57.95p a litre for more than four years, which is a populist policy but one which fails the public in that it serves only to lock them into having to use their cars.
“With physical inactivity, pollution and congestion increasing across the UK, investing in cycling and walking is an economic silver bullet and government must act across all departments to secure significant investment. Government must create a Cycling and Walking Investment Strategy that guarantees long-term funding for active travel.”
Alex has written for more cricket publications than the rest of the road.cc team combined. Despite the apparent evidence of this picture, he doesn't especially like cake.
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80 comments
So seems you're "scum" if you *horror* dared vote Conservative, but the same people who say that are fed up of being called "scum" by those motorists who use the "you don't pay road tax" line.
I guess you're all allowed to be hypocrites?!
I wouldn't call Tory voters 'scum' - most of them are merely misguided fools. No, the 'scum' are the ones actually in power...
Brian Cooke is just a dinosaur. Consider that he is part of TfL yet cannot comprehend that cyclists have zero emissions so will pay the same as band zero vehicle owners.... NOTHING.
Nothing changes, business as usual. If you feel that strongly about it have a jersey printed with "Zero Emissions = Zero Road Tax"
Brilliant, best move anyone could do for the cycling/road tax argument.
"Why don't you get off the road, you don't road tax?"
"Actually my good friend, I do pay road tax, it's just I'm zero rated"
Cue cyclist pedalling away.
Because they always hang around to engage in conversation ...
so sadly economic activity is still ruling the roost... any attempt to get more people out of cars and into active travel it appears is being blocked because that would reduce our 'economic activity' and hence our GDP and thus make it look like we've gone into recession...
oh and it would also reduce motor and oil company profits...
they've been well and truly captured by the road lobbies...
It does say zero emission vehicles will still pay zero.
Am I going mad here? Its still VED, not 'road tax'.
as far as I can tell, all this is just a smoke screen for a tax cut?
And the notion that the tax revenue raised by the VED is being ring-fenced to pay for roads is just rubbish political posturing. This is not a new tax, and road building is not a new expense (although it does sound as though the government is looking to build more roads). Tax money is spent on roads, and you can claim it came from anywhere. You might as we say 'VAT is ring fenced to pay for the NHS'
Not if they plan to hypothecate "road tax" and resurrect the "road fund", which is exactly what Gideon has said they are planning to do:
"..I am creating a new roads fund from the end of this decade – every single penny raised from VED in England will go into that fund.."
If only the vat from my wiggle spend was ring fenced for cycling infrastructure.
Am I missing something here? Why so angry people?
I watched the relevant bit in the budget and didn't think it was too bad. Ok, the wording insinuates, that more money from it will be going towards roads (giving the cyclists don't pay tax etc. people some ammo), but nobody knew that anyway. Also, the emissions based way they're doing it from 2017 was always how it would have to be done.
And tbh, raising the fuel duty isn't a way to get people to cycle. Plus I rely on a motor vehicle too. I can't cycle everywhere (though, I try).
Maybe they should rename it Vehicle emissions duty or something.
Let's take one, if not the only positive point from this... They are saying that all of the money raised will be ploughed back into the roads...
I would happily welcome better maintained and higher quality roads with open arms. Not only are they safer to cycle on, but safer foe drivers around the cyclist as they won't be dodging drains and potholes every 10 metres!
Except as Sean highlighted. 6 billion raised from VED and 8billion spent on roads. Even the fact that motorists will no longer be exempt from the first year this money raised will not cover the shortfall and the roads will continue to be funded from general taxation which also includes the duties raised from fuel. It is further posturing to the the motoring lobbies.
Nowhere in this budget can I find anything to cover sustainable transport be it trains, buses or bicycles which would take more vehicles off our roads and in the long term relieve the NHS.
Most comments here seem to assume that those who had been able to recognise the difference between VED and road tax in the past, are now going to start mowing cyclists off the road left right and centre.
Most comments here seem to assume that those who had been able to recognise the difference between VED and road tax in the past, are now going to start mowing cyclists off the road left right and centre.
Privileged c*nt changes taxes to help other privileged c*nts. No news there.
Anyone who voted in this shower of pricks, serves you right. Shame the rest of us have to live with it.
In 2012/13 the government raised approx £25 billion in fuel duty and £6 billion in VED.
It spent approx £8 billion on road infrastructure.
Source RAC foundation
http://www.racfoundation.org/motoring-faqs/Economics#a14
So Osbourne's statement is just political posturing and meaningless in financial terms.
That'll knacker the lease market.
If any serious cyclist voted Tory in May you deserve this. I am proud I would never vote for that scum or UKIP so I can rant on at leisure.
This is nothing but a sop to the UKIP faction, try and divide those who pay and do not. Of course the vast majority of us drive so pay VED now so those who say that I do not, can STFU.
http://www.bikebiz.com/news/read/tories-resurrect-cyclist-baiting-road-t...
Some interesting comment on the original reasons it was scrapped here.
3...2...1...
Brian Cooke is a TfL board member.
Like clockwork bikebot, like clockwork. I wonder if he wakes up at night in cold sweats dreaming of cyclists
No, thats the angina.
I would suggest he should consider a more active lifestyle, perhaps he should consider cycling to work. He appears to be a little over weight, and with the associated health issues I don't see why I should have to fund an A&E visit if he has a heart attack....
It's been suggested before. But if you're a cyclist, he'll block you on twitter and his account is now private. Of course he's still making transport decisions that affect everyone in London (though expect him to disappear as soon as Boris is gone).
If you do vote Tory and a cyclist surely Goldsmith would be an ideal choice ? Surely he is pro cycling ?
As for Labour think Khan is, Jowell is.
It doesn't even make economic sense. Hypothecating taxes doesn't increase the tax take - it just cuts down on the flexibility of the government. Politics is what drives this, and appealing to the Mr Toad vote. It's depressing.
I guess now we know what Clarkson, J. was doing after leaving Top Gear - advising the Treasury...
If I remember correctly, he advocates (or used to) just putting the tax cost onto the price of fuel.....not that it's important we know what he thinks about anything though!
Actually makes a kind of sense? those who use the system pay the most? those who use it very rarely pay less?
and it'd be pence in the £ kinda increase really? with the cost of petrol going up again who would notice.
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