Newslink October 2023

Motoring under attack?
Cost of driving: is there
a war on motorists – and
is there more to come?
Tom Harrington
Driving a car is becoming more expensive
by the day. The momentum has gone out
of the Government’s efforts to tackle the
motor insurance crisis, as premiums rise
way ahead of inflation. That is a real pity,
because it coincides with petrol and diesel
prices shooting up at the pumps and the
emergence of new charges on drivers in
the form of ULEZ-style charges.
And the Government bears a large
degree of responsibility for this, as it takes
a huge slice of tax from motor fuels.
In fact, it’s easy to see why motorists
feel they are being bled dry by the
Government through taxes, ranging from
excise duty on petrol and diesel, to vehicle
tax and other charges.
The current price of petrol and diesel -
based on late September figures - is
£1.56.11p for petrol, £1.60.18p for diesel.
These figures can be bettered if bought at
a supermarket, or be far worse on
motorways and major trunk roads, and in
rural areas.
By way of comparison, in 2013 these
prices were £1.37 and £1.40.
The current Government has made much
of it being ‘on the side of the motorist’, and
has frozen fuel duty rises since 2013.
But it would be challenging to describe
any Government as a ‘friend’ of the
motorist when you consider how much of
that £1.56/£1.60 is tax.
Current fuel duty is 52.95 per litre, and
on top of that you add VAT at 20 per cent.
Without fuel duty, but keeping VAT on
fuel, would see prices fall to around
95p/£1.00 a litre.
Whether there is a ‘war’ on motorists
could become very apparent in the next
few years, however, as it is clear that
something has to change in the war cars
are taxed and charged. Why? Because of
electric vehicles.
In a new report, MPs on the Transport
Select Committee have recommended the
introduction of a road pricing system based
on miles travelled and vehicle type.
This would “enable the Government to
maintain the existing link between motoring
taxation and road usage” – which could come
under threat because neither fuel duty nor
vehicle excise duty are currently levied on
electric vehicles.
The report estimates that without reform,
policies to deliver net zero emissions by 2050
– even taking into account the recent
decision to push back the ban on petrol and
diesel car sales to 2035 – will result in zero
revenue for the Government from motoring
taxation – leading to a potential loss of £35
billion to the Exchequer.
This would impact on roads funding – as
well as funding for other areas such as
schools and hospitals.
The report concludes by saying drivers of
electric vehicles should pay to maintain and
use the roads which they drive on, as is
currently the case for petrol and diesel
drivers. However, it stresses there must
remain incentives for motorists to purchase
vehicles with cleaner emissions.
Huw Merriman MP, chair of the Transport
Committee, said: “It’s time for an honest
conversation on motoring taxes. The
Government’s plans to reach net zero by
2050 are ambitious. Zero emission vehicles
are part of that plan. However, the resulting
loss of two major sources of motor taxation
will leave a £35 billion black hole in finances
unless the Government acts now – that’s 4%
of the entire tax-take.
“Only £7 billion of this goes back to the
roads; the rest is used for general public
spending, meaning schools and hospitals
would be impacted if motorists don’t
continue to pay.”
He suggest using technology to deliver a
road pricing scheme which prices up a
journey based on the amount of road, and
type of vehicle, used.
“Just like our current motoring taxes but,
by using price as a lever, we can offer better
prices at less congested times and have
20 NEWSLINK n OCTOBER 2023