Clarity on motoring taxes needed

Government taxes on motorists need to be better justified, according to a new report from MPs.

Mishandled policies have resulted in a deep mistrust of the Government's motives, according to the Transport Select Committee's 'Taxes and Charges On Road Users' report, which was published today.

The Committee cited the introduction of new vehicle excise duty rates as an example of the Government's inability to efficiently deliver motoring taxation policy to the public.

Committee chairman Louise Ellman said: 'The Government handled a phased set of increases to vehicle excise duty so badly that it tarnished the image of environmental taxes.'

Some of the report's other key findings are:
•The Government has been inconsistent in the way that it justifies motoring taxes.
•Those who consume the most and pollute the most should pay the most
•The London congestion charge loses almost half the revenue it generates to administration costs, and is too dependent on income from fines. Future congestion schemes need to be less expensive to run.
•The Government should clarify its position on road pricing and how it might replace other taxes and charges - otherwise such a scheme is unlikely to ever receive public support.
•Voluntary road-pricing schemes may offer a way forward if pay-as-you-drive charging influenced the behaviour of even a minority of drivers, the result could prove beneficial to all.
•The Government should consider a low-cost pay-per-mile lorry charge for both UK and foreign-registered users, so that UK freight operators do not face unfair competition from foreign owners who use cheap continental diesel fuel.

Current system is fair
The current fuel duty tax is a fair system, the report suggests, but adds that more money needs to be raised.

Louise Ellman said: 'We believe taxation based on car usage through fuel duty remains fairer than any approach based on taxing car ownership, and that it does more to encourage fuel efficiency and reduce CO2 emissions.'

Reaction
Professor Stephen Glaister, director of the RAC Foundation, said: 'While the solutions might be complex, the problem, as the committee has recognised, is simple. Too many vehicles on too little road space and no clear explanation to drivers of exactly what they get in return for the 45 billion they contribute to the Exchequer each year.

'We're pleased the committee agrees with us that there should be a shift from taxing car ownership towards charging for road usage.'

Edmund King, President of the AA, said: 'The message is clear to the Government, and indeed all political parties, that the motoring public has lost trust in them when it comes to motoring issues.'