Monday, September 18, 2006

Hypocrisy and hyperventilation - Tories on our car tax proposals

When I was younger, I used to get very upset at Tories banging on about LibDems taxing people off the road. As I get older and understand our proposals better, I find such Tory hyperventilation most amusing.

So, it was with great amusement that I read Iain Dale's "Lib Dem Car Tax Proposals are Environ-MENTAL" and all the outraged comments underneath from crusty old and young Tories.

Iain says that a humble family person wanting a 2 litre petrol Mondeo would be crushed with a £1500 tax. He then gets out his high-horse and declaims:

This is madness and is entirely regressive, as hardworking families, already struggling to survive, find themselves priced out of cars. In rural areas they would be even more hard hit.

Time to bring out the Eric Forth memorial brown paper bag, I think. Breathe in, breathe out, slowly.

What Iain doesn't say is that said humble family person wanting a 2 litre Mondeo could instead buy a Diesel 2 litre Mondeo Edge with an emissions level starting at 151 g/km on the open road and only pay another £25 in tax (i.e. a total of £125) under our proposals (a tad more if they are doing a lot of urban driving). Or indeed they could buy any of these cars and get no change to their tax at all - their Vehicle Excise Duty would remain at £100 as it is now:

Renault Clio 1.5Dci
Audi A2 1.4Tdi
Peugeot 206 2.0Hdi
Vauxhall Astra 1.7Dti
Citroen Xsara Hdi (110bhp)
Renault Clio 1.2 16v
Ford Focus 1.8 Tdi
Renault Laguna 1.9 Dci
VW Golf 1.9Tdi (130bhp)
Audi A2 1.4 petrol
Peugeot 406 2.0Hdi (110bhp)
BMW 320 diesel

What is the point of a tax system if it doesn't encourage people to make less polluting choices?

My amusement is increased by the fact that Steve Norris is proposing more or less the same sort of green car/fuel taxes as us - see this Telegraph article entitled: "Tories plan 'painful rises' in car and air tax" I am sure that Iain Dale will criticise such proposals if they come forward. However, the corporate Tory fulmination at our plans (on Iain Dale's "comments" space and elsewhere) is profoundly hypocritical.


  1. Paul, 10 out of 10 for effort, but there's nothing hypocritical in what I say at all. If Steve Norris were foolish enough to propose something similar you won;t find me slow in coming out and arguing against it - very vociferously!

  2. Iain, 10 out of 10 for spotting my posting via Bloglines and 10 out of 10 for posting a comment, and you make a fair comment - I was rather alleging corporate hypocrisy (when taking into account all the comments on your posting) rather than personal hypocrisy on your part - I know you don't hold back in criticising your own party's proposals some times.

    I am rather baffled, though, how encouraging people to buy a Diesel 2 litre Mondeo (only £25 extra tax) instead of a petrol one is "madness".

  3. I have now modified the posting to make it clear that I am not accusing you personally of hypocrisy, Iain

  4. Paul, isn't one of the problems with saying that this scheme will encourage people to make greener choices be that the tax plans are designed to use green taxes to fill the 'black hole' caused by the policy of dropping the 50% tax rate? The policy, then, simply cannot succeed - either it provides the level of income expected, and so does nothing to affect climate change, or it leaves a huge hole in Britain's finances. It's not a particularly appealing choice, surely?

  5. Thanks for your interesting points Ken. The LibDem tax plans, approved overhwlemingly by the party, start from scratch by implementing the principle of shifting the burden of taxation from taxing income to taxing wealth and energy consumption which is polluting. So it is not a case of filling holes, it is a case of starting with a fresh sheet of paper and implementing taxes for the right reasons.

    As with price/demand relationships, tax decisions are all about getting the balance right, predicting the ratio of pay back correctly. Research from the Energy Savings Trust and the Department of Transport shows that a top rate of £2000 for VED would help change behaviour and cut CO2 emissions. The calculations of expected revenue take into account reductions in the purchase of proposed high VED vehicles. Bear in mind that the VED element is only a part of the £8M projected revenue from environmental taxes which are supplemented by a further £12M other tax increases to pay for the income tax cuts. Note also that there is a £1.3M contingency in the revenue projections to allow for variance of the figures.