A very moderate suggestion

Here at RDRF we break taboos.

We point out that people adapt to perceptions of risk. We suggest that it is not necessarily a very good idea to assume that we should be living in a world with more and more cars which are to be used more. We think that danger should primarily be thought of in terms of the threat one poses to others, rather than the (supposed) danger presented to you. We try to speak English rather than “roadsafetyese”.

 It’s a bit like the old idea that “you can’t tell a man he’s not a good a driver”. We’re the kind of people who do.

 So, as we enter 2010 and all face the prospect of higher taxes and/or public service cuts, not to mention later retirement, reduced savings etc., let’s look at one particular taboo area which is even more relevant now than during the boom years. It’s also an idea which has a very special relevance for transport professionals.

 After all, this is the time when transport practitioners working in areas financed by central or local government are bracing ourselves for the dreaded cuts. How will we cope? Is there anything we can do to soften the blow(s)?

 I – and this is a personal opinion – think there is. It is for transport professionals to put forward the facts about the costs of motoring and present Government with an alternative to some of the inevitable cuts and taxation rises, not least in the area of properly resourcing sustainable transport. (I’m not interested in cuts in road building projects – a good area for public expenditure cuts if ever there was one).

 That alternative is one which has always been on the cards for sustainable transport advocates, which was minimally recognised with the fuel tax accelerator, but which has always been something of a taboo subject for politicians and professionals alike.  So here goes – steel yourselves:

 I think that motorists should pay a reasonable amount of money to drive their vehicles on the public highway.

 Phew! If you’re still breathing, let me explain what this would mean, why it is justified – and why it could, despite all the conventional wisdom, be a lot more widely accepted than most people think.

Why should motorists pay (a lot ) more?

 Take a look at the facts of motoring taxation presented by our friends in the moderate transport campaigning group Campaign for Better Transport http://www.bettertransport.org.uk/campaigns/climate_change/roads/facts/taxes#2 . These use the conventional indices employed in cost-benefit analysis and other forms of calculation used by car-centred transport researchers and show that, for example:

  • The costs of motoring have fallen by 13% against the Retail Price Index (which doesn’t include, for example, the increased cost of housing) since1997 alone. This during a time of increased working hours, often diminishing pensions – before the credit crunch.
  • Fuel costs are often far higher elsewhere in Europe
  • Even according to conventional analyses, motorists do not pay the costs they incur. Even if you could put a cost on pollution, congestion, danger, destruction of local community, collisions, health of road users, etc – motorists do not pay anything like the official estimate of these costs.
  • We pay far more in taxation elsewhere – why not on something which has so many negative impacts? Even those hostile to paying indirect taxation must be aware of the vast sums paid in local taxation, VAT, alcohol excise duty, stamp duty  etc.
  • Reducing dependence on car usage can be helped by Smarter Travel and other initiatives – but apart from the fact that these are of limited benefit and need financing, increased car usage is associated with lower driving costs. Increasing driving costs is a great help – if not necessary – for a healthier, more sustainable transport system.

 

 Of course, there are some reasonable objections:

  • What about the poorer drivers who might have to stop driving altogether? The poorest still don’t drive. And poorer drivers have problems of not being able to get on the housing ladder, having adequate health care, housing, pensions etc. Why should they be subsidised – for that is what it is – when other areas are more worthy of subsidy? If this is not a good enough answer, then there could be allowances for lower income drivers – if, as with income tax, wealthier drivers were to pay more.
  • Wouldn’t it be more sensible to have carbon rationing? Maybe, but in the short term this is a good way of dealing with the relevant issues.
  • Isn’t it just another way of raising taxes for the Government? Although it is a way of reducing the problems associated with increased car and other motor vehicle use – yes, it is a way of raising money. If you don’t want to pay any taxes, I suggest thinking about not paying off the deficit, not paying tax on alcohol, VAT rated goods, income tax etc.
  •  What about people in remote rural areas, or in sectors where it really is difficult to reduce motoring or drive smaller vehicles? There may well be special cases fro exemptions. But often these are areas where the problem is precisely that we have made motoring so convenient that dependency was created in the first place: that kind of argument is often part of the problem. And as with the poorer drivers case, if there are exemptions, then those who don’t find it so difficult to reduce car usage should pay even more to make up for the exemptions. Besides, most motorists can reduce their car journeys to some extent – see http://www.bettertransport.org.uk/campaigns/climate_change/roads/facts

 

 So how much should motorists pay?

 Just to get a rough idea, how about the average driver paying what they were paying (in so-called “real” terms) in the early to mid-1990s? Hardly deep in the mists of time. Yet the costs of motoring have fallen by 13% against the Retail Price Index (which doesn’t include the increased cost of housing) since1997 alone. So a good ballpark figure would be a 15% increase in costs.

 

 …and how?

 A good way is to base costs on emissions (noxious and greenhouse gas) and size of vehicle (related to levels of road space taken up and danger to others).  Obviously there are great differences between the kinds of vehicle, the amount of mileage done, the amounts of insurance paid etc. But if this price were paid through increasing the price of petrol, we could envisage an average of some additional £600 – £750 per annum for a typical car – motoring organisations claim current costs of £4 -5,000 per car per year –  if we returned to the 1997 price. That would translate into a rise of petrol prices by 50 -100%.

 That would realise – allowing for shifts to less motoring and/or more fuel-efficient cars – some £10 billion per year extra. That’s if we only returned to the 1997 price “in real terms”.

 This is an extremely rough figure; it doesn’t include any cost rise in the haulage industry, allow for necessary exemptions (in agriculture, with taxis and public transport) etc., etc.  But it does show that a significant amount could be raised of an order – some £10 billion per year – which would make a difference in the current discussions on necessary cuts and higher taxes.  Of course it also shows that, despite the continuous claims that vast amounts of tax are paid by motorists, compared to annual borrowing figures of £180 billion, and the amounts raised by general taxation, the contribution of motorists is not that great.

So can we push this on to the transport policy agenda?

 Once the taboo of motorists paying has been raised, the prospect can become quite attractive. In fact, looked at in the context of the costs of motoring to society and the environment, this is more a question of motorists partly paying their way, rather than taxation. Healthy debate on the costs of motoring should help in reducing prejudice against non-motorised modes (such as that against cyclists “not paying a tax”). It can confront the myth of motorists “paying for the road” foreseen by Churchill as a danger nearly a century ago.

 The precise method: charges based on size of vehicle, types of congestion charge; fuel costs etc., is up for debate. The point is to reflect the damage done by motoring and to reduce the need for taxation and/or cuts in government spending.

 It offers a useful, if not necessary spur to more sustainable transport policy. It allows for at least some choice in a revenue-raising measure – as most motorists can drive more carefully, or less, or in a more fuel-efficient vehicle – compared to most forms of taxation. But most pertinent at the present time, it offers an alternative to transport (as well as other public sector) expenditure cuts which should concentrate the minds of transport professionals.

It could come down to a choice – cut your mileage and/or pay a bit more to drive and/or change your car – or lose your job. That choice might prompt some taboo-breaking thinking.