Monday, September 18, 2006

Lib Dem Car Tax Proposals are Environ-MENTAL

I know it always annoys my friend Conor Burns when I say this, but I like Chris Huhne. I'm sure if I had fought him in the last election I might have a slightly different view, but I speak as I find. However, liking someone personally, doesn't stop me critisising him politically.

Today, Chris Huhne will be outlining his plans to 'sting' Mondeo Man for £850 a year in car tax. Under LibDem environmental tax proposals car tax for a mid range saloon car would rise from £150 to £850, albeit that it would apply only to new cars. For a two litre Ford Mondeo the car tax would rise from £210 to £1500. This would have two effects. It would, at a stroke, result in many car dealerships going out of business, for that this exactly the type of car which most families buy. Secondly it will mean that hardpressed families keep their existing cars for as long as possible as they gradually turn into smoke-belching rust buckets.

This is madness and is entirely regressive, as hardworking families, already struggling to survive, find themselves priced out of cars. In rural areas they would be even more hard hit.

If we are to rebalance the tax system in favour of environmental taxation surely we should be charging on a useage basis, rather than a blunt car equivalent of a poll tax? Road pricing surely has to be the way forward, so you pay for what you use.

53 comments:

The Clown of Pevensey Bay said...

Ah, but bring in road pricing and you hit the haulage firms where it hurts! I'm sure truck drivers have families too....

Tom said...

Tax the fuel!
That covers car use and size of engine.

greenham woman said...

I am all for charging £2k road tax to them Chelsea Tractors...unless owner can prove legitimate need ie. farmer, window cleaner, estate agent, mother with kids to get to school, driver extremely fat etc etc

beethoven writes said...

His proposals are shocking but at times like this you breathe a sigh of relief that the Lib Dems haven't got a hope in hell of forming a government. Chris Huhne -On your bike matey!

Praguetory said...

I've said it before and I'll say it again. If this comes in, buy, tax and insure your car on the Continent. This is just another example of hammering people "in the system". Subsidise research into environmentally friendly fuels, by all means, but don't do this.

Anonymous said...

Our roads are a limited resource, just like the NHS and water. These resources are currently free at point of use and therefore nobody has an incentive to use them carefully. The success of Red Ken's congestion charge at reducing traffic in London shows the way forward! Do you fancy newts too Iain?

kafka said...

Correspondent Tom,

From your eu fastness you may not have noticed, but fuel in the UK is already taxed to the hilt by our "best ever" Chancellor.

So people are paying a usage tax right now, without any further interference from well-meaning environmentalists.

Anonymous said...

We already have a much cheaper and fairer alternative to road pricing, it's called fuel tax. The more you burn, the more CO2 you release, the more tax you pay. It's just that pricing it appropriately has become apolitical no-no.

Anonymous said...

Car tax is stupid, it creates offences, costs a lot to administer and does not discriminate between high use and occasional use.

For all the good will I have towards the Lib Dems because of the Iraq war. they really are not getting any more clever.

As Tom points out, a green tax already exists which does increase with how much petrol you use. Its the petrol tax.

Politicians always complain that we do not respect them. No wonder really...

Anonymous said...

And road pricing would just add to the complication, notwithstanding the fact that I would not like it very much that someone somewhere knows where and when I go.

Funnily enough, I don't even have anything to hide!

AnyonebutBlair said...

The problem with all the green tax proposals are threefold:
1) The unintended consequences of restructuring the tax system are unclear e.g. as you point out, does this mean that people hold onto older (and hence less environmentally friendly) cars longer? Who compensates the 4x4 and sports car dealers that go out of business? Who compensates 4x4 and sports car owners (who all vote!) whos pricey car is now worthless
2) The purpose of taxation is to raise revenue for the government, in principle in as transparent and simple manner as possible. These proposals will mean you will require a PhD in Maths to navigate the tax system and a highly paid and highly expensive tax accountant at your
side. What happens if people do switch to more evironmentally friendly cars over time, the policy has been successful but tax revenue is reducing? Another tax to layer on...
3) Who are the winners and losers? We'll all hear very loudly from the losers (myself included)

The proposals are stupid, the purpose of tax is to raise government revenue not to socially engineer. The simplest way to reduce car pollution is to follow the California lead and pass pan-EU law requiring environmental and fuel economy requirements of car manufacturers, intrduced in a phased way over time.

Colin said...

The flaw in Huhne's proposal is in limiting the increased road tax to new cars which are generally cleaner and more fuel-efficient than older vehicles. I would increase the road tax on all cars, in the hope that adding substantially to the fixed cost of running car would eter some car ownership. Like it or not - and it will be very hard to sell this in a conventionally adversarial electoral context - we have to reduce car ownership (especially multiple car ownership within a family) and car use. This is something that will only be achieved over a generation, but it must start now by changing social attitudes to car use when viable public transport alternatives are available. We should all ask at every opportunity: Is my journey really necessary? Can I achieve my objectives without travelling by car?
I'm convinced that, in time, this will not be seen as greenery gone mad but the socially responsible attitude to take.

Jonathan Sheppard said...

1500 quid is plainly ludicrous! I suppose its OK if you are an MP who can even have an excuse that they have a run around and have their train fares to work paid for. How would they like already forking out 600 pounds a moth for a train ticketto work like my wife does?? And for me who doesnt travel as often on the train the open standards ticket is over 100 pounds! Its not as if the public transport option is the cheap alternative!

And what would this actually achieve - where are the policy suggestions which look at China, Pakistan, India and so on whose energy consuption will rise dramatically and be based on coal fired power stations?

Andy W said...

If, as Tom says, you tax fuel you at a stroke hit most of the problems, ie high road use increases the amount you pay as does driving a larger car / 4x4 - its your choice. As for haulage companies why not have the equivalent to 'pink' diesel - with a lower tax rate. The cost and complexity of a system that trackes every vehicle movement and creates a bill would be astromonical. Finally, a 2 litre Mondeo would cost £850, what would the cost of a 1.6 model cost etc.etc.etc - can we have all the facts not a snippet please

Anonymous said...

The way forward is simple we need a bus and train system that works is frequent and reliable. after all currently it is not and charging people for using the road when they may have no other choice is not fair either

The Druid said...

Britain's motorists are already over taxed. Governments of all colours realise just how essential a car is to modern living. Thus it is an easy target for taxation, all the more so as it can be camouflaged under the spurious 'doing something for the environment' excuse. Of course Cameron has cottoned on to this - what did you expect? In reality the money raised is rarely spent on transport infrastructure or environmental schemes going instead to fund other spending. In short the motorist is a cash cow whom the government loves to milk.

Of course such policies are to be expected from politicians who are insulated from the daily grind to work or the school run. Clearly no one in the Lib Dems has stopped to think that someone will need to earn about £1400 gross just to pay the tax on the family car. As the average income is about £25K this is policy is thankfully an electoral suicide note.

Links to support claims on my own blog which you can all balme Iain for inspiring me to start!

Fruning Graplecard said...

I am already being taxed. I pay income tax and VAT. I have just bought a domestic air ticket and paid over 70% in tax.

This proposal will hit the poor. Mondeo Man will carry on regardless.

chrisdoc said...

Colin's suggestions about much increased road tax detering car ownership may have some value in cities with fairly adequate public transport, but would simply not work in rural areas, where there is usually no alternative to the private car, as villages lose shops, post offices, schools etc. the fact that motorists are already paying the vastly inflated price of fuel is itself testament to the lack of viable alternatives

Kryters said...

We already charge on a usage basis - its the tax on petrol and runs at about 70% of the price of fuel.

Stick a penny or two (or whatever it equates to) on that and get rid of all the road pricing schemes, DVLA, tax disk production etc. Keeps it simple, keeps the administration costs to an absolute minimum and noone can avoid it.

Of course, all this only works as long as were using oil based fuels - roll on hydrogen power!

Peter Hitchens said...

What utter bollocks !
This is all about social control, anything like that gives left leaning politicians a hardon, and they have plenty of usefull idiots to help them in their cause.
There is absolutely no evidence to suggest that that global warming is a manmade phenomenon.
How did the last ice age end? it certainly wasn't due to nanook of the north driving a range rover.

Jimmy said...

Quite ridiculous. When will Dave make it Tory policy in his deparate drive/fly/cycle towards green policies for the Tories?

You shouldn't really criticise until you are sure it won't be in your manifesto for the next election.

James Hellyer said...

it will mean that hardpressed families keep their existing cars for as long as possible as they gradually turn into smoke-belching rust buckets.

As some 75% of the pollution generated by any car is created during its manufacture and scrapping, it's hard to see how extending the life of vehicles could be construed as environmentally unfriendly.

towcestarian said...

Colin 11.05

Have you actually considered the end-to-end environmental costs of cars? Sounds like you haven't. New cars may burn a little less petrol than older ones, but what about the environmental costs of building the new car and disposing of the old one. As most of that energy for things like producing sheet steel, glass, engine blocks etc comes from fossil fuels, it would take decades to justify the switch to a "new" car on purely environmetal considerations.

The 4x4 tax is just a bit of cheap propaganda by targetting unpopular groups. This desperate bunch of nobodys (aka the LibDems) will probably bring out plans to tax estate agents next.

ian said...

Road Pricing is technology for technology's sake: We already have a method for charging based on usage and pollution - fuel duty. Bigger, more polluting, more used vehicles driven in more congested areas use more fuel, and consequently pay more duty. Why spend billions on road pricing infrastructure, when fuel duty could be used to achieve the same end results.

But in principle, road pricing and fuel duty are the same thing. So how can you, Iain, be for road pricing, but against fuel duty?

f0ul said...

Well done LIb Dems, you've put your foot where your mouth should be!
This is one for the city folk, the ones who can hop on and off a bus, train, tram at a whim - but what about the other 30 million people who don't live and work in a metropolitan centre?

Besides the whole enviromental nonsense (does anyone even know if the CO2 is a product or a symptom of a warming climate? discuss) taxing movement of people is silly and non productive. People need to work, most of the country need a car to do this. Tax them enough and it would be cheaper not to work. Mass unemployment everyone?
Maybe they should do something useful and remove a few taxes. That would be novel, might even get them elected. That reason alone is probably a good reason not to do it!

Niles said...

Don't forget that whilst we are raising taxes for the most polluting cars, we are also reducing income tax for the poorest, taking two million people out of income tax altogether. Mondeo man will not necessarily end up paying more tax when you take the tax cuts into account.

Anonymous said...

Iain - no!

If you want an environmental tax, the thing you have to tax is petrol, not road useage. Taxing road useage is only useful when applied to internalise the costs of road congestion.

Anonymous said...

OK, two more things:

1. Yes, fuel s already highly taxed. t may well be taxed higher than the level at which the environmental costs are internalised, or it may not. It's certainly taxed much more heavily than, say, fuel for heating your home, which has no environmental justification.

2. "Pink" diesel for haulage companies? Absolutely not. If you are concerned about the environmental effects of burning fuel, it's just as important to reduce the fuel burned by hauling stuff around in big lorries as it is to reduce the fuel burned by commuters. The only problem is that the system is not closed - foreign hauliers can evade the tax by filling up in Calais. There are two choices here: eiher get an EU-wide enviro-tax applied to fuel, or tax incoming lorries on the fuel in their tanks. The latter option is inconsistent with membership of the EU.

Sir Bentley Pauncefoot said...

As dear, doomed Oscar remarked:

"There is only one thing in life worse than being talked about, and that is not being talked about."

Here, one feels, is the sole purpose of Master Huhne's little effort.

Peter from Putney said...

Unlike most European countries, where tolls apply, foreign vehicles entering the UK effectively use our road and motorway system for free (with a few exceptions), as well as polluting our air. This is unfair and needs to be addressed.
I suggest a levy of £5 per day for small cars, £10 per day for 2litre plus cars and £40 per day for trucks - all to be paid at the port of entry and with the expiry date clearly displayed on a disc to be displayed on the windscreen, and therefore easily checked on departure from the UK.

Tom said...

kafka said...
Correspondent Tom,
From your eu fastness you may not have noticed, but fuel in the UK is already taxed to the hilt by our "best ever" Chancellor.
So people are paying a usage tax right now, without any further interference from well-meaning environmentalists.


I'm assuming that the start is meant to be a derogatory comment? If it's a comment against my web address it's pretty dumb as you have no idea on why I chose a .eu address.
I also note you didn't spot the "small" hint of irony in my comment. Ah well I suppose I should have added the word "more" to the end of the sentance so everybody would get it.

Tom (a company petrol card toting environmentalist)

Anonymous said...

Since all cars emit the same amount of CO2 per litre of petrol, tax the petrol.

I know that unlike road pricing, petrol tax wouldn't tell the government where each one of us is at every moment in time, but still...

Butch McQuickly said...

anonymous 2.09 is against pink diesel for lorry drivers.

As a gay lorry driver, I must protest.

Wizzlewick said...

I thought Steve Norris was all in favour of this sort of stuff.

The whole point of the tx is to encourage less polluting behviours which David Cameron is all for, isn't he?

All Modeo man has to do is buy a Ford Mondeo Duratec HE saloon which has emissions of 182 gcpk (only £700 more tax under the proposals) or indeed choose from these cars where there are no changes - tax stays the same for under 150 gcpk:


Renault Clio 1.5Dci
Audi A2 1.4Td
Peugeot 206 2.0Hdi
Vauxhall Astra 1.7Dti
Citroen Xsara Hdi (110bhp)
Renault Clio 1.2 16v
Ford Focus 1.8 Tdi
Renault Laguna 1.9 Dci
VW Golf 1.9Tdi (130bhp)
Audi A2 1.4 petrol
Peugeot 406 2.0Hdi
BMW 320 diesel

Conor said...

This would be the same Chris Huhne who drove an old beaten up polution ridden Volvo until.....the election was called and he got a Pirus for the press releases. The same Chris Huhne who used to according to colleagues, drive a sports BMW, when he worked in the City. The same Chris Huhne who when he was an MEP used to fly from London City Airport rather than take the Eurostar train. No Iain its not that I don't like him...I just think that he is a typical LibDem. But for people of his means tax doesn't really hit hard.

Hey said...

Mental.

To the fuel duty proponents: the reason so many of us advocate for Road Pricing is that it is much more addressable as a TAX. People complain about the price of fuel and the fat cat oil companies, rather than questioning where the stupendous amounts of fuel tax go after they disappear into the government's maw. Road Pricing makes it quite explicit as to how much tax the government has, and makes for many awkward questions when they use it to splash out on non-transportation or environmental spending.

The other benefits of road pricing are that you can deal with city driving more harshly than rural driving (long trips are much more efficient than short ones in terms of pollution, congestion, and road wear) and you get a good sense of how people actually behave (none of the crap traffic projections, but money on the barrelhead for routes, including new improvements, etc).

Car use has a CO2 effect but many other negative effects as well (I say this as a devoted fan of my Range Rover and Porsche) that home heating doesn't (furnaces, especially modern ones, run at high efficiencies and can use heavy and bulky scrubbing equipment that cars can't). Despite what Greenepeace tells you CO2 isn't the only problem in the world, and is by far the least of all pollution problems.

Hitting this as a car poll tax is an excellent idea. Obviously an idea much beloved by K&C, Islington, and City socialists!

Someone bothered to look up the details said...

All Modeo man has to do is buy a diesel 2 litre diesel Mondeo (eg the Edge) which has emissions of 151 and therefore the tax proposed by Huhne is only £125, £25 only more than what they would pay today.

PoliticalHackUK said...

Of course, this will go down REALLY well in Solihull, that recent Liberal Democrat gain and also the home of the Land Rover. I'm equally sure that the workers there and in the neighbouring constituency of Birmingham Yardley will be only too delighted at their brand new Liberal Democrat MPs lining up to whack £2k a year onto the ownership costs.

The Blind-Winger Jones said...

From what I understand these proposed taxes are going to hit layers of turf and eaters of brocolli the hardest. I personally do not have formal lawns and the steep banked valley's of the Calder Valley do not allow for them outside my humble cot.

Anonymous said...

The problem with increasing fuel tax is it would hit the poor - with these proposals people have the option of buying a reasonably green car and ending up a lot better off.

Not that I'd expect the Conservatives to care about what happens to poor people :)

Buster George said...

Maybe Ming should call on Clive Sinclair for advice on transportation.

Gracchi said...

Iain I agree with you- I've never been able to understand either why the government don't manipulate their powers to slow traffic down and make it less convenient in areas with good public transport. Strikes me that say a 5 mile an hour speed limit in London would cut car use more than any tax and you could keep the speed limits in places like rural Cornwall high.

Anonymous said...

I think £2,000 is a fair price for car tax.

Firstly it'd get rid of all the teenage idiots and pensioners on the road.

Secondly it'd clear the streets of all these 2nd, 3rd and even 4th household cars that only get used once a week - we'd be able to drive!

Incidently how did people in the countryside and families get about before the internal combustion engine became so cheap?

laurie van trukk said...

fine lot of traditional tories here -- i think the general tone is running about 2 to 1 in favour of some increase in tax, albeit in a variety of ways. True tories would be out to reduce tax in all its forms wouldnt they (or am I really as alone as Im feeling these days)?

Frank Lee Speaking said...

One unintended effect of increasing the car tax, or road fund licence, would be to increase the amount of tax that is not collected from evaders. Another would be to increase the incentive to evade the tax. Road pricing, like the so-called congestion charge, could be evaded by bold and resourceful drivers. The only road taxes that cannot be evaded are the excise duty and Vat collected on fuel sales.

ian said...

gracchi: 5mph in London would be a vast improvement.

Ungruntled said...

The Lib Dems have a great idea here - following in the steps of Red Ken and his congestion charge - make motoring the preserve of the rich and keep us lower mortals off the road.

JosephintheBracknell said...

This stuff is moot. BMW annouced that it is planning to offer hydrogen buring engines across all of its models. The exhaust is water. Pollution zero. All these environmental tax policies will be overtaken by tecnology, as other manufacturers inevitably follow suit.

"Freedom's the answer. What's the question?"

Anonymous said...

Wizzlewick is right and Ian Dale, doesn't live up to the new environmental Conservative oak tree symbol.

There's absolutely no need for 2 litre engined cars when we are faced with global warming and a dwindling oil supply.

So, what exactly is the problem with the Lib Dem proposals?

I welcome this tax. Shame the planet can't have a bit more support from those still stuck in the last century.

Anonymous said...

Yes but no but yes but... the thing is Iain, an even more precise way to tax usage is to wallop higher taxes on fuel, something I seem to remember Conservatives vehemently oppose. Oh dear, typically political failure to join the dots...

ian said...

Come on Iain! What happened to rule 3 of the successful blog: "Interact with your readers who make comments"?

Anonymous said...

A tax on fuel is only part of the solution and we already have the highest level of fuel tax. This tax is to stop more of those that can afford higher priced fuel from buying gas-guzzlers in the first place.

We need more fuel efficient vehicles. How can anyone complain about this tax I do not know.

Anonymous said...

Kafka - fuel isn't "taxed to the hilt". Our best ever chancellor has FROZEN the duty since 2003, and came off the Tory fuel-price escalator in 2000. Fuel duty is now only 67% of the pump price according to the AA - the lowest percentage for about 15 years.

As for the Tories - do you really believe Zac Goldsmith will leyt you off green taxes?

Nah - the only choice for hardwoking families is Labour.