The transport industry is bemoaning the fact that the fuel duty is still set to increase by a penny at the beginning of October. Of course, as VAT is applied to fuel duty the increase will be 20% more (well it will be 20% from 1 January 2011).
The Welsh Farmers Union are particular annoyed by the increase because many people in rural areas feel that they have no choice but to use their cars – there being next to no public transport in most of Wales.
Clearly people will speak from their own interest (at least from what they perceive their interest to be). The people who sell petrol and diesel would like to sell more fuel and make more money and therefore they are not keen on a fuel tax.
The Chancellor is not known for wanting to increase any tax – he would rather cut spending. But, in these difficult times, he still likes to raise his taxes in a way that would annoy as few people as possible. Motorists are an easy target as, in general, motorists are the materially better off people in our society and more to the point, motorists have been vilified by the media for being global polluters.
Public transport providers often make it clear that, while the cost of motoring has reduced in real terms over recent years, fares have increased. Many of them would like to see motorists encouraged to use public transport by increasing fuel tax.
In the nineties, the ETA commissioned two reports on the real of cost of motoring. It was clear that motorists were not being charged for their external costs. These costs, be they damage to other people’s health through noxious gases or damage to safety through road danger etc were not being allocated to motorists but paid for by the society at large. The figures used in those studies would be different now – it would be interesting to what the motorists’ balance sheet would look like today.
The ETA has held that, whilst understanding the need for the treasury to collect sufficient taxes for the services we want in common and that the collection should be efficient, they should also be seen to be fair. It is for this reason that we have said that vehicle excise duty (the tax disc) and fuel duty should largely be replaced by road-user charging and a carbon tax.
The people in the rural parts of Wales would gain heavily from this change. This is because road-user charging would be lower in rural areas and, if the carbon tax is spread across all processes that create climate change gases, the motorists’ share would reduce.
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