The Government loves bad news. Timed right, really bad news can be used to hide other bad news. For instance, what’s the betting that this week’s report published by the ‘Institute of Advanced Motorists’ will not get the headline coverage it deserves? For example, who remembers the Edinburgh trams ongoing scandal that hit the headlines yet again a week ago?
The headline in the IAM’s new report entitled ‘Motoring Taxation And Public Spending’ states that only 38 pence of every pound that motorists pay at the pump is for fuel. That means 62 per cent of the total cost is fuel duty and VAT.
Apparently, the percentage of tax paid at the pump rose from 47 per cent in 1980 to 75 per cent in 2000, although it fell back to a ‘mere’ 62 per cent last year 2010 as a result of increases in the price of oil.
In 2010, petrol at the pump prices increased by 27 per cent while diesel rose by 18 per cent. Already this year the petrol prices are up by 8 per cent and diesel by 12 per cent.
And there’s more. The government spends only about one-third (£12,752 million) of its total tax revenue from road users (£43,885 million) on roads and local public transport.
Now here’s the thing. Since 2002, the government has spent more on rail infrastructure than road infrastructure, although rail is used for only 7 per cent of all passenger travel. In 2008 the government spent £4,807 million on road infrastructure compared to £5,567 million on rail infrastructure.
Shifting freight off the road and on to rail is a good thing, but look at the cost. Pot holes are increasing in size and depth, incurring more pocket-emptying damages by us motorists. Already over a million motorists have given up their cars due to rising fuel costs. Add in this additional pothole damage expense and even more will have to chuck it.
Oh wait a minute. I get it. If there are less cars on the road then there will be less wear and tear on the tarmac and less need for expensive maintenance. But then again, the Government will generate less tax – so they will have to put up our taxes again.
Ye cannae win eh?