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62% of the price of fuel at the pumps is now tax12 July 2011by Janice May Motorists in this country pay more tax on fuel than drivers in any other EU countries. While motoring tax is not levied in Britain in some of the other ways deployed by some EU countries (such charging a toll for use of motorways), drivers here are looking to the Government to do more to help them to reduce the cost of motoring. A recent report from the Institute of Advanced Motoring (IAM) pointed out that only 38p in every pound paid at the punp is actually for fuel, the rest is fuel duty and VAT.  In 1980, the tax on fuel was 47%, rising to 75% in 2000, dropping back to the current 62% owing to rising fuel prices. While the Treasury's share has fallen, pump prices have rocketed with a 27% rise in the price of petrol and an 18% rise in diesel in 2010. The first half of 2011 has already seen an increase in the petrol price by 8% while diesel has gone up by 12%. In 1985-6, drivers paid £29bn in tax rising to £44bn in 2007-8 (in real terms, adjusted for inflation). However, as the number of cars has risen, the amount paid per individual car owner has actually dropped slghtly. Because the price of fuel has rocketed, motorists are paying much more at the pumps, however, and they are therefore more interested in the fact that Britons pay more fuel tax than other countries than that, in fact, they are paying less tax than in the past. In addition, it is widely known among the public that the tax receipts from motorists are much more than the amount of Government spending on roads and local public transport. Indeed, according to the IAM figures, only a third of the fuel tax goes back into the transport infrastrusture. Even then, most of the spending is on public transport rather than on the roads infrastructure. In 2008 the government spent £4,807 million on the roads infrastructure, spending more, £5,567 million, on the rail infrastructure, despite the fact that only 7% of all passenger travel is by rail. The IAM also found that car owners spend ten times more on purchasing and running their cars (£42,700 million) than the government spends on roads (£4,807 million). Neil Greig, the IAM Director of Policy and Research commented: “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". Accepting that the situation would get worse as government cuts are rolled out, Greig suggested that investment now was merited as it would prevent more expensive repairs later. Of course, the state of our roads has been a cause for concern for the majortiy of motorists following the emergence of numerous potholes after several especially harsh winters. While drivers are anxious for these to be fixed, the estimated cost of up to £10bn to repair these roads will lead to delays of several years before Councils are able to complete their repair programmes which, of course, could be made worse by future harsh winter weather. This website has commented before on the increasing anger motorists and hauliers feel in relation to excessive fuel costs. If at the next budget, more radical measures to reduce fuel costs to motorists are not laid out, it would not be surprising if road users became more personally active in trying to improve the situation with, quite possibly, various types of direct action. In the meantime, you can at least try to keep your car insurance costs down by shopping around for your cover. |
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