Thursday, July 10, 2008

The Vexed Question of Green Car Taxation

Nick Clegg has got a piece up on CiF today. It's nothing very new to anyone who pays attention to Nick's every utterance, as will be true of many Lib Dem bloggers. What I found notable about it was the comments thread it has sparked. Like all dicussion of this issue, it is full of people arguing for some system or other, who talk past each another, not to each other.

What I mean by this is that they proudly proclaim the benefits of the tax instrument they favour and the shortcomings of the those proposed by others, but they don't address the shortcomings that others raise about their own preferred tax instrument.

Essentially, what we have on offer here are three alternative forms of taxation, all imperfect:

1. Vehicle Excise Duty - "we tax people on the car they own"

-Allows the annual check on insurance and MOT to be bundled in with its administration; these things are Good Ideas for other, obvious, non-environmental reasons.
-Allows us to incentivise people to buy fuel efficient cars.

-Penalises the owner of a car for simply having it, not for using it, which is the polluting part.
-Doesn't distinguish between people's reasons for owning a car. Those who need a car because they live in a rural area pay as much as those who live on a perfectly usable bus route for owning the same car.

2. Fuel Duty - "we tax the petrol"

-Is the best green tax; it allows us to straightforwardly penalise the polluter in proportion to the amount of fossil fuel they burn.

-Doesn't allow us to make value judgments on the "worth" of the journey being made. Someone who lives in a rural area and has little choice but to use their car if they want to get into town to do some shopping pays just as much as someone who lives five minutes' walk from the newsagents but is too lazy to walk there to buy a paper (say).

3. Road User Charging - "we charge people for each journey they make" (includes congestion charges, motorway charges, etc.)

-Allows more specific targeting of "the wrong sort of journey" - as long as we can all agree on what that is.

-May involve the use of some fairly intrusive technology if we want to do anything more clever than making motorways into toll roads (for instance).

The only thing we know for certain about this choice is that, unless we want to see some other taxes go up significantly, we have to choose one of them, and it is right that we do so, because discouraging car use is an important part of any effort to meet our CO2 reduction targets. So which way should we as a country jump? Nick Clegg is making a pitch in his piece for option 3, Road User Charging:
So the real solution we should be focusing on to cut driving is to abolish VED altogether and cut fuel tax, replacing them with revenue-neutral road user charging on motorways and trunk roads only.
But he doesn't even mention the concerns people have about Road User Charging in his piece (the intrusive road use tracking that may be involved). By neglecting to pre-emptively rebut this point, he makes the fundamental error of leaving space for a glib response in a CiF piece - give these people an inch... But never mind that, reforming CiFers is better done by those with the stamina for endless perseverance in the face of fuckwittery, such as Citizen Alix.

Now, we over here in the more civilised domain of Lib Dem Blogs may have read James Graham's post exploring why RUC needn't be as intrusive as some suggest, but why there's plenty of other reasons to dislike it as a policy:
My main objections are threefold: it would take bloody ages to introduce, it is an IT disaster waiting to happen and it falls foul of the unintended consequences law.
By that last comment, by the way, James means that it doesn't penalise "60-something retirees living the life of Riley out in the sticks and driving a Mercedes".

And that's the problem with this whole argument, really: everyone can think of some unutterable git who they would like to punish for living in the wrong place, or having the wrong job or the wrong lifestyle, or making the wrong choices, who gets off lightly under a given policy. Or if they can't manage that, they can think of some poor unfortunate who is being driven out of house and home by being taxed as highly as they would be under said policy.

Meanwhile, the problem I have with Nick's suggestion is the idea that motorway journeys around the country, when one could go by train, are in any way a more pernicious form of pollution than journeys into town from home, when one could take the bus. If we want to make a serious dent in greenhouse emissions, surely we need to tackle both? The journeys that can justifiably be discouraged are those with truly viable public transport alternatives, regardless of the distance of the journey. So what constitutes a viable alternative?

To me, there is a distinction to be made between a journey by car whenever you feel like it, and a journey by bus or train that you have to plan in advance because they only run every so often. What makes the London tube such a great public transport system (at least compared to the rest of the country) is that it runs regularly enough (most of the time) that you don't bother to plan a time in advance, you just walk into a station and get the next train to where you want to go. To me, public transport has to have that kind of convenience before it can be considered a truly comparable alternative, as well as simply not taking an inordinately longer time to travel. Of course, exactly how regular something needs to be before you consider it viable will vary from person to person, so this is not the reliable deciding factor it might look like.

And of course, we still want to gently suggest to people that they might take public transport even when it does notably inconvenience them. After all, it would reduce emissions if people took a bus from their suburban home into town which runs every half an hour, even if that is a pain in the arse.

Once we get into the business of deciding how worthwhile or defensible everyone's decisions to take a car are, we run the risk of an overbearing state intrusion to make the whole system workable. If we don't want to go down that route, then we are going to end up with a piecemeal system of toll plazas on motorways and congestion zones in town centres, with unintended consequences of encouraging people to drive on B roads and thus increase their emissions.

So can we please stop these silly games? Can we instead focus the argument on what it is we are trying to achieve here? In the end, we are trying to achieve a greener Britain. To do this, we must discourage all usage of fossil fuels. Ultimately, the best way to do that is to make it really jolly expensive to burn fossil fuels. Full stop. Then we can start having an argument about giving certain people special dispensation if we want: hauliers, for instance, or people who live in rural areas (though I'm with James on that one; unless you're a farmer, you don't have to live out in the middle of nowhere, and anyone choosing to do so knew that they stood to be dependent on car travel when they bought the house. It's swings and roundabouts; they get the lower house prices, they can also take the costs of driving about the place.) Ultimately, the best way to lower emissions is for the cost of polluting to be reflected in the price of the journey.

So my conclusions here are as follows:

- A VED regime which simply covers the cost of administration of checks that each car is insured and has passed its MOT.

- A fairly punitive fuel duty, to be poured into increasing bus services and making train tickets cheaper.

- Renationalise the railways! Maybe unpopular with the liberal wing of the party, but frankly, the record of the private railway franchises in Britain doesn't seem great as far as ticket prices are concerned. We now subsidise the railways around four times as much as we did under British Rail, and all we have to show for it is rocketing ticket prices despite services which are in more demand than ever.

Alright then, tell me why I'm wrong!

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