Rachel Reeves should launch a £10bn tax raid on motorists by charging them a fee for every mile they drive, Sir Tony Blair’s think tank has urged.
Cars and vans should pay 1p per mile and heavy goods vehicles charged between 2.5p and 4p per mile, according to proposals published by the Tony Blair Institute (TBI).
Of course, it would mean cutting fuel duty at the same time.
But we also get to something a little more difficult. The economics of this is perfect. The politics not so much. Because it would mean having to tack all journeys by each and every vehicle. At which point, who actually wants that to happen?
It’s rare, but this might be one of those times – good politics actually beats good economics.
“Of course, it would mean cutting fuel duty at the same time.”
Naive, foolish boy…
Who would trust any company employed by the government to produce the system to administer this, given their track record?
It would be easier just to increase fuel duty. As people have pointed out, if you pay fuel duty, you are already paying by the mile. Of course, some people pay more per mile than others as how much fuel you use depends on the size of the engine, fuel type, is the car a hybrid, etc.
A bigger issue is how to get electric car drivers to pay more. if you car at home, you pay no fuel duty. You could charge duty on electricity delivered by a charging station as it would be easy to administer. However, you cannot really differentiate between the home electricity going into the car versus the electricity going into the iphone or kettle.
I always like to add a certain context to any outbursts by Blair.
https://www.dailymail.co.uk/news/article-4874748/MAC-Tony-Blair-speaking-again.html
Timmy’s consistently pointed out the fuel duty is higher than the notional necessary carbon tax value. So take that difference, multiply it by 4.55 to get it in pence per gallon and divide by 36, the average UK petrol car fuel efficiency in mpg. Levy that per mile on ‘leccie cars and no need to faff around with measuring mileage on proper cars… Job jobbed.
We already pay a fee for every mile they drive – FUEL DUTY. The more miles you drive, the more fuel you buy, the more fuel duty you pay. Some quick mental maths tells me I pay 13.5p per mile.
Sorry, forgot another division there.
Some quick mental maths tells me I pay 6.75p per mile.
Because it would mean having to tack all journeys by each and every vehicle
I’m not necessarily in favor of the proposal but it could use the milage recorded during MOT’s and on vehicle change of ownership where you already have to pay for new road tax.
For new vehicles a lump sum tax could be levied on new cars to cover them till their first MOT.
Imagine the complexity of detectors everywhere and responders in all cars, all feeding into a giant computer that then sends you a bill. All set up by the government. Sounds like a recipe for a massive cluster f*ck.
There’s a relatively simple – well simpleish – answer. Use MoT records. However, it would need some form of registering mileage when a change of ownership occurs (DVLA, so a problem right there). So, first three years, nothing until MoT, then a bill. Thereafter annually. But, naïve it may be – fuel duty would have to go.
As a means of doing it, it’s relatively straightforward and doesn’t need infrastructure or tracking, but I simply don’t trust the bastards not to just tack it onto existing fuel duty or royally fuck it up.
Bugger. AndyF beat me to it.
While using the recorded MOT mileage would give you the required information surely it would mean coughing up a lump sum once a year, not good for people who can’t budget. At 1p/mile it’s not going to be more than a couple of hundred quid for most people but who thinks it will stay at 1p for long?
Since fuel duty already collects two bucketloads of tax, the only vehicles that need pay per mile are the electric ones. So just track the EVs, which will be easier as they are already full of the right kind of technology.
Of course add pay per mile at a reasonable road mainteneance rate and the whole “cheap green electric” sham disintegrates.
’not good for people who can’t budget. ’
Like Rachel Reeves, Mr Womby?
@Julia baboom tish!
So if I wind back the odometer, I’m not just increasing the value of the car, I’m now cutting my tax bill too?
Brilliant. A new market opportunity beckons.
We need a 100% tax on Tony Blair, and all his friends.
@Ottokring
“Of course, it would mean cutting fuel duty at the same time.”
Naive, foolish boy…
Indeed. They recently hinted that they are going to increase fuel duty, and not insignificantly, not scrap it.
“Sir Tony Blair’s think tank”
Any prose that associates Toni Blair with thinking is necessarily absurd. He is a dim little man.
Possibly a city centric point of view but the main constraint needing economics of pricing applied to it is peak time use of road space. Plenty of road space outside of peak. Yes there’s the overall revenue issue but VED , fuel tax and VAT add up to many times more than we spend on roads.
Especially with the rise of EVs we actually want to time shift away from peak to minimise adverse congestion externalities whilst encouraging the now greener economic growth from point to point travel.
Fuel duty and road charging come close to a Tobin tax on the physical economy so I would really suspect a move to general taxation (where required!) rather than more or even replacement road pricing outside of peak charge.
Certainly possible to do peak tolls and similar whilst protecting privacy even if what normally happens is the opposite in the UK which is using the new surveillance capability with safeguards. Different in other EU countries that see privacy as absolute rather than proportionate.
Just a little bit off topic. My prediction for motorists this budget will be a raising of the standard Insurance Premium Tax (IPT) paid on vehicle insurance. Currently 12% and raises £8 billion odd a year.
This will be raised to match VAT, the only question being whether it is pushed through in a single jump or staggered over the life of the Parliament.
“However, you cannot really differentiate between the home electricity going into the car versus the electricity going into the iphone or kettle”
Simple, mandate EVERY home charging point to be on a separate meter. The government could promote it as another wonderful “Green” job creation scheme…
Looks like I may have to get my Sinclair C5 out of the cupboard.
“There’s a relatively simple – well simpleish – answer. Use MoT records. However, it would need some form of registering mileage when a change of ownership occurs (DVLA, so a problem right there). So, first three years, nothing until MoT, then a bill. Thereafter annually. ”
Cue every pikey and criminal having two similar looking vehicles (white van anyone?) – the one they drive, and the one that gets MOT’d every year, both of which they will run on the same plates. APNR/Plod out on the road will read the number plates of the van they drive, and see that the vehicle is taxed and MOT’d, all fine here! MOT tester will see the one that does a thousand miles a year, tax due tuppence ha’penny. Jobs a good ‘un. Or you just bung the MOT tester a few quid to make sure the mileage is recorded incorrectly. Or he gets a visit to say ‘Sorry to hear about that fire in your garage next week, and by the way we know where you live’ if he refuses to play ball. If the say so of MOT testers is going to be the method by which the State raises billions in taxes then said MOT testers are going to be leant on hard by criminal elements.
If you were an MOT tester would you fancy becoming an unpaid tax collector for the State, and would you think the police are going to protect you when the scum element of society come calling demanding you ‘misread’ their vehicle’s mileage?
@Another yet another Chris – “the main constraint needing economics of pricing applied to it is peak time use of road space”
No. The main constraint is the need to raise huge amounts of tax because we spend so lavishly.
@Jim – any system can be circumvented by those willing to do so. Nor would it make MoT testers unpaid tax collectors, as they record the mileage already, so no difference to what they do already. As a system, it is preferable to being tracked everywhere and is low tech. I didn’t suggest it was perfect, merely a logical solution that is preferable to the alternative.
LR, you are probably already tracked by ANPR cameras. Those inconspicuous grey posts at every junction and slip road. Some say the infrastructure for road charging is already in place, and it will have dynamic pricing so no MOT or simple odometer based method will be offered.
salamander:
“However, you cannot really differentiate between the home electricity going into the car versus the electricity going into the iphone or kettle.”
Sure you can. Every charger sold, home or commercial, is made by a company.
– Require a meter in every charger, with a valid hookup to the company server for current to flow.
– Make unmetered chargers illegal, and put it on the power company to track funny usage (like they currently do to track down grow ops).
– require the company to report usage of the charger. Most of them are foreign, but to sell chargers in the UK they have to consent to this.
– charge tax based on the results of the meter.
It’s no more intrusive than the BBC tax, which Britons have tolerated for most of a century. Yes, there are ways around it, like with any DRM scheme. But it’s certainly doable.
This scheme does have the disadvantage from the government’s point of view of not giving current information about the location and movement of every car on the road. Oh well.
@ rhoda clapp – that it won’t be offered, doesn’t mean the same as should. If this is the way forward (and I remain unconvinced) then it should be as unintrusive as possible. That the bastards are already tracking us doesn’t make it okay to increase it. As in all things, the simplest, least obtrusive method is preferable. I am opposed to this system in principle, but I would prefer MoT mileage as a method to the alternative. That the scum who govern us will opt for the most intrusive, technologically complex and expensive is, of course, a given – because they are scum.