Less Than a Third of VED is 'Road Tax'

The Government takes more than three times more on motoring taxes than is spent on roads, latest official figures show.

In 2010, fuel taxes raised around £27 billion for the Treasury, with about £5 billion coming from vehicle excise duty (VED).

But the figures, from the Department for Transport (DfT), also showed that in 2010/11 just under £5.7 billion was spent on local roads and £3.75 billion was spent on national roads.

The 2010/11 statistics also revealed that £7.6 billion was spent on the railways, and £4.9 billion went to local public transport.

Total public spending on transport in the UK, including capital spending by public corporations, was £22.9 billion in 2010/11.

The DfT said VED almost doubled between 1987 and 2010 while the increase in revenue from fuel duty more than tripled.

The department added that, looking at the period 1997 to 2010, the overall cost of motoring (including purchase, petrol and oil and tax and insurance) had risen slowly, although there was a larger increase in 2010, and more slowly than the increase in the cost of living as measured by the retail prices index (RPI).

But when the purchase of a vehicle is removed, motoring running costs have risen faster than the RPI, and public transport fares have risen faster than RPI.

The DfT also published figures for VED evasion for 2011, which showed that about 0.7% of traffic on UK roads (including Northern Ireland) was being driven without a valid tax disc.

This equates to about 249,000 vehicles, down from an estimated figure of 307,000 for 2010.

The highest rate of evasion in 2011 was among motorcycles, with 2.1% not being properly taxed.

It is estimated that VED evasion could have cost around £40 million in Britain in 2011/12, down from the figure of £46 million in 2010/11.

Further department figures today showed that while passenger numbers on London buses continue to grow, patronage in the rest of England is falling. The number of bus passenger journeys in Wales and Scotland is on the increase.

Bus passenger journeys in London rose 1.9% in July-September 2011 compared with the same period last year, but total journeys in England fell 0.6%.

The July-September 2011 increase in Scotland was 0.3%, while in Wales it was 0.5%.

AA president Edmund King said: "Fuel duty alone contributes more than 5% of the public finances tax-take, including council tax. Like councils that have come to rely on parking income and fines from parking and moving traffic offences to prop up town hall coffers, the Treasury is beginning to find out how high fuel prices and tax have started to kill off the goose that lays the golden egg.

"Sadly, the victims of tax hikes are poorer motorists - helping to turn the clock back on social mobility and undermining the ability of the workforce to find new jobs.

"These latest Government figures show it is business as usual for UK drivers who contribute more than three times what they receive in service. This has been the way for a generation and leads to inadequate infrastructure and frustrated road users."

A Treasury spokesman said: "At the Autumn Statement, the Government took more action to help households with motoring costs by freezing fuel duty until next August and scrapping a second planned rise altogether.= This came after our decision to cut fuel duty at Budget 2011 by 1p, abolish the fuel duty escalator and replace it with a fair fuel stabiliser.

"The Government has listened to genuine concerns from motorists and delivered support worth more than £4.5 billion over two years. Petrol and diesel will be an average of 10 pence per litre cheaper - and the average Ford Focus driver will be £78 better off in 2012-13 - than if we had proceeded with the previous government's planned escalator.

"Our national infrastructure plan also confirmed that we will invest over £1 billion in tackling congestion and improving our road network."

Institute of Advanced Motorists director of policy and research Neil Greig said: “This is highway robbery.
Using so little of the taxes motorists pay on road upkeep is plainly unfair.  Motorists are also paying the price as Britain’s potholed and increasingly dangerous roads take their toll, damaging tyres, wheels, steering and suspension.

“Cuts are clearly going to have an impact on transport investment, but as more roads become more potholed and dangerous, spending on infrastructure now will save money in the long-term.”