Road Tax Change Proposals

Silicon.com editor Tony Hallett has blogged today about the upcoming proposed changes to road tax here in the UK. His brief musings make an interesting read and cover some of the technology aspects of the proposed changes which is fair enough. However, the more I read about these proposals the more annoyed I get. For those of you who don’t live in the UK, we pay a fixed amount a year for a tax disc (a piece of paper that we place in our windscreen) and this amount is based on the amount of emissions our cars produce. For example, I drive a 2.0 Litre diesel car and my tax per year is £135. We also pay tax on the fuel that we buy (from a friend of the family who owns a petrol station, this currently weighs in at around 48% of the cost of a litre of fuel). This is all well and good (extortionate) but the UK Government have, in their wisdom, decided to revolutionise the tax rules.

Essentailly there are 2 new proposals. The first (and less annoying) one will see new tax brackets based on emissions. These brackets will have a tax value associated with it, and the tax levels start at £0 and go up in £300 increments up to £1,800. So immeidately most people will be paying at least more than double for their road tax, some people will end up paying more than 10 times what they do now! However at least you now how much the tax will be and can budget for it.

The second (and definitely far more controversial proposal) is related to when people travel and which roads they use. People travelling at rush hour on congested roads could pay up to £1.30 per mile for the privilege. The reception to this proposal has been nothing short of an outcry. Well I say that. It’s been an outcry from people like me who have to use motorways during busy times to get to work. Of course those people who only ever drive on the country lanes from one village to the next think it’s a great idea. Unfortunately there are a few flaws with this idea…

Firstly, the tax on fuel will still be applied under these new proposals. So it’s not so much a shifting of where the tax is applied, more a topping up of the government coffers. Secondly, the car becomes a prohibitive form of transport for all but the shortest of “around town” journeys. If people can no longer make the drive to work (34% of the population work more than 20 miles from home) then the skills available to companies decreases as people aren’t prepared to travel. Companies become less competitive and then the economy becomes weakened. Thirdly, the price of pretty much everything will go up. Can you imagine courier companies or the Royal Mail absorbing the increased costs that their vehicles have incurred because of the new rules? Fourthly (fourthly?), where is the public transport infrastructure to support getting these people to move from their own cars to public transport as a viable alternative?

Now I can almost hear some of you shouting at your screens with this environmental issue or that environmental issue. And it’s a valid argument. I’m not advocating destroying the environment just to be able to travel to work. However, cars aren’t the only villain here. Think about all the times that people leave lights on, put the TV on standby, use high power lightbulbs rather than the low power alternatives, or boil a full kettle just for one cup of tea. All of these have a massive impact on the environment but are the government slapping a massive tax on non low-power lightbulbs??

To give you some example of how much difference this will make, lets take my journey to work. Now I’m fortunate as I can work flexibly so I’m not in the office everyday, normally only 3 days a week. So all of my calculations are taken based on travelling 3 days a week to work. So, my journey is 63 miles door to door (one-way). I drive the M6, M6 Toll and the M42. If we take out the 19 miles of the M6 Toll (it’s a privately owned highway and therefore not under the Government’s jurisdiction) that leaves me with an 88 mile round-trip per day to work. At the moment this costs me approximately £35 per week in diesel (based on 97.9p per litre). So that’s £35 of diesel for 264 miles to work. I also pay £3.325 per journey on the toll road, so at 6 journeys per week, that totals £19.95. I won’t include wear and tear as this won’t change under the new rules. So that’s £54.95 per week. Given that I get 34 days a year off work (including Bank Holidays) lets call that 7 (working) weeks. so 45 weeks at £54.95 per week is a grand total of £2,472.75. That’s all of my work costs. Add the £135 for tax and that gives me £2,607.75.

Under the new rules lets look at the costs. Now I’m assuming that the mileage will be classed as taking place at peak times on busy roads (the M6 in the West Midlands is the second busiest motorway in the UK) so even giving the Government the benefit of the doubt, I can’t imagine them charging less than 90p per mile. So 88 miles for 3 days a week, 45 weeks, 90p per mile is a grand total of £10,692. Fuel charges remaining the same at £2,472.75. So my grand total is £13,164.75. So that’s 5 times the cost. Fantastic, great plan UK Government. Now I don’t have an option. I can’t use public transport to get to my work and still do a 7.5 hour day. The journey on public transport takes just under 3 hours. It’s just not an option.

So that’s £10,692 a year that I’m supposed to find just to have the pivilege to go to work. What a joy. Then again maybe the government will allow the company that I work for to give me a raise of £10,692 tax free so that I can afford to work. Then again…