Motoring taxes 'tarnished eco image'

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Motorists mistrust the Government's road user tax measures, a report from MPs said today.

The Government has been inconsistent in the way it has justified motoring taxes, added the report from the House of Commons Transport Committee.

Road users remained "an important source of revenue" but needed to be treated "fairly and with openness", the MPs said.

The committee's chairman, Louise Ellman (Labour, Liverpool Riverside), said: "The Government handled a phased set of increases to Vehicle Excise Duty (car tax) so badly they tarnished the image of environmental taxes."

The report said: "The Government has been inconsistent in the way that it has justified motoring taxes. Fuel duty has been presented, at different times, as a tool to reduce carbon emissions, a source of general revenue, and a means to fund transport investment.

"We are concerned that motorists are mistrustful of the Government regarding taxes. The Government needs to improve the consistency and transparency in the way it justifies taxes on road users."

The committee went on: "Major issues remain to be resolved in relation to taxes and charges on road users.

"Road users are, and will remain, an important source of revenue for Government expenditure, beyond that spent on the road network. If their trust in the taxation system is to endure, they must be treated fairly and with openness."

The committee said:

* Penalty charge notice parking tickets must not used as a means of simply raising revenue;

* There is insufficient linkage between the Treasury's road user tax policy and the Department for Transport's policy on transport;

* There should be greater investment in transport, including the road network;

* The whole process of vehicle excise duty (VED) changes was "handled badly" although the moderated and phased increases now introduced were to be welcomed;

* It is worrying that the London Congestion Charge scheme running costs still remain high, consuming almost half the revenue generated;

* If congestion charges go ahead elsewhere, less expensive ways of administering them must be found;

* Voluntary road pricing schemes - Government-run or commercial - may offer a way forward and could include VED or fuel duty being traded for per-mile charges;

* Given the lack of progress with local congestion charging schemes, it is important that the potential benefits of workplace parking levy schemes are properly considered.

Mrs Ellman said: "We believe taxation based on car usage - through fuel duty - remains fairer than any approach based on car ownership and does more to encourage fuel efficiency or reduce CO2 emissions.

"We recognise that economic factors will limit how much revenue can be raised by this method. We call on the Government to develop other measures to address the problem of congestion."

She went on: "Stronger linkage between Treasury policy and Transport Ministry policy is essential if the Government is to send clearer signals to UK motorists about congestion and carbon emissions while encouraging walking, cycling and greater use of public transport.

"Effective reform will, however, elude any Government until the public is given explicit and comprehensive information detailing how much money is raised through this route and how it is used."

RAC Foundation director Professor Stephen Glaister said: "While the solutions might be complex, the problem, as the committee has recognised, is simple - too many vehicles on too little road space and no clear explanation to drivers of exactly what they get in return for the £45 billion or so they contribute to the Exchequer each year."

AA president Edmund King said: "The message is clear to the Government and indeed all political parties that the motoring public has lost trust in them when it comes to motoring issues.

"An AA/Populus poll shows that 75 per cent of drivers don't think any of the political parties are 'motorist friendly'. In the run up to the general election all political parties need to lay out their stall to show how they will help the 32 million UK drivers."