Budget Transport Taxes Unfair to Rural Communities, Families, Motorcyclists and LPG Users
Chancellor Brown's latest budget, the ABD believes, misses the mark on transport taxation. The Chancellor claims to be backing green transport but his 2006 Budget delivers three blows to Britain's hardworking families, none of which will help the environment:
- An increase in the tax (VED) on family cars and rural utility 4x4s
- A increase in the tax on LPG
- An increase (rather than a decrease for this congestion-busting mode) on motorcycle tax
All of these tax increases are unacceptable in the context of the huge tax burden on motoring (£45bn) compared with the lamentable and inadequate spending on Transport (£8bn)
Vehicle Excise Duty
The Chancellor has increased Vehicle Excise Duty the tax on larger family cars. The VED increases of £25 and £45, starting at 185g.km, are a knee jerk response to a campaign of intimidation waged by the likes of Greenpeace against wealthy 4x4 users in cities. This in itself is unacceptable.
However, it gets worse because the increases catch out a large range of typical family transports, as well as penalising rural users of 4x4s who need them for towing and off road use. The new top "Gas Guzzler" band G, at £210 per year, includes three Skoda products, a 2 litre Astra and a VW Beetle Automatic (VCA website). Hardly supercars.
Ben Adams, the ABD's Environmental Spokesman said
“This tax-hike does little except penalise family drivers, especially in rural areas. They are already hard-hit by the escalating cost of fuel, so they already pay more to run their cars. To make them pay even more is simply inequitable. It is also bad for safety, as these measures will encourage people to overload smaller vehicles that are not fit for purpose.”
Ben Adams continued:
&ldquo.The shift away from simple and effective fuel taxation towards excise duty is a futile trend. Unlike fuel taxation, VED bears no relation to usage. A large vehicle which is parked in an owner's drive all day whilst he catches the train to work uses far less fuel than a small car which does a high mileage, yet an increasing reliance on excise duty will penalise the former and reward the latter. Indeed, the owner of a less efficient vehicle could be forgiven for saying ‘Well I've paid a high amount of tax already, I may as well drive to work.’.”
“The Chancellor actively encouraged drivers to switch to cleaner LPG in past budgets, but now their popularity has grown he is clawing his money back” says Mark McArthur-Christie, the ABD's Director of Policy. “Yet another increase in tax is a severe deterrent to switching to a greener, LPG-powered car.”
The ABD is also concerned that motorcycles have been subjected to a tax increase, rather than a decrease to reflect their potential for congestion-busting. The increase is relatively small, but the ABD believes Mr Brown should have taken the opportunity to decrease motorcycle tax. McArthur-Christie commented, “powered two-wheelers are a really effective way for people to travel cleanly and quickly, whilst using minimal road and parking space — we believe the government should recognise this with a tax break.”