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news
London cyclists at Hyde Park Corner (copyright Britishcycling.org_.uk).jpgSadiq Khan urges government: Let us use Londoners’ ‘roads tax’ to help fund growth in cycling and walking in capital
Mayor of London Sadiq Khan has urged the government to let Transport for London (TfL) use ‘roads tax’ paid by the capital's drivers to help fund growth in cycling and walking, as well as on the city's roads.
The reference to ‘roads tax’ came in a press release yesterday announcing TfL’s draft budget for 2018/19, the first year of its new five-year business plan.
It was no accident, with money raised by the government through Vehicle Excise Duty (VED) set to be ring-fenced for use exclusively on roads under reforms announced by George Osborne in 2015 when he was Chancellor of the Exchequer.
TfL’s latest budget sees it have to balance the books against the backdrop of a £700 million cut in central government funding.
“With the removal of the government grant, this will be the first year that TfL has had to address the critical and unique demands of London’s road network, including congestion, maintenance, renewals and air quality, without support from the government,” the press release said.
“Both TfL and the Mayor are calling on the government, as part of their Transport Investment Strategy, to make sure that a link between ‘roads tax’ and roads funding is applied to London as well.
“This would allow TfL and the boroughs to continue modernising London's road network, as well as support more walking and cycling journeys across the capital.
The press release continued: “From 2021, the £500 million raised every year from Londoners’ Vehicle Excise Duty will be collected by central government and only invested in roads outside the capital.”
As cycling journalist and author Carlton Reid points out on his I Pay Road Tax website, nowadays there is no such thing as ‘road tax’.
The process to abolish it was begun by Sir Winston Churchill in 1926, with the Road Fund, raised from motorists and ring-fenced to be spent on roads, disappearing in 1937.
Currently, motorists are required to pay VED each year, based on their vehicle’s emissions, or engine size for vehicles registered before 1 March 2001. Less-polluting and some older vehicles are exempt.
Roads are now funded from a mix of general and local taxation, and money raised through VED is not ring-fenced for use exclusively on roads – but that is set to change under the reforms unveiled Osborne in his June 2015 Budget, his first for a Conservative majority government.
Outlining changes to VED, he said: “I will return this tax to the use for which it was originally intended.
“I am creating a new Roads Fund. From the end of this decade, every single penny raised in vehicle excise duty in England will go into that Fund to pay for the sustained investment our roads so badly need.
“Tax paid on people’s cars will be used to improve the roads they drive on. It is a major reform to improve the infrastructure and productivity of our economy – and deliver a fairer tax system for the motorist.”
Osborne’s words were in stark contrast to those of one of his most illustrious predecessors as Chancellor, Churchill, who in a note to Treasury officials in 1925 wrote: “Entertainments may be taxed; public houses may be taxed; racehorses may be taxed … and the yield devoted to the general revenue.
“But motorists are to be privileged for all time to have the whole yield of the tax on motors devoted to roads. Obviously this is all nonsense … Such contentions are absurd, and constitute … an outrage upon the sovereignty of Parliament and upon common sense.”
Despite the fact the Road Fund was abolished eight decades ago, anyone who cycles on Britain’s roads will know that many motorists still take the view that ‘road tax’ exists and that people on bikes should not therefore be on the public highway since they don’t pay it.
Such views not only miss the point that road tax doesn’t exist and the VED they pay goes into a central pot together with other forms of taxation, but also that most adult cyclists also own cars (and are in fact more likely to come from multiple car-owning households than the average driver), and even if they were subject to some kind of duty, in line with the least polluting vehicles, they would pay nothing.
But under the forthcoming reforms, those motorists may feel even more of a sense of entitlement - although it's worth noting that at the time of Osborne's announcement, the £6 billion raised annually through VED was dwarfed by the £27 billion gained from fuel duty, which won't be ring-fenced.
As a result, there will be a shortfall between the amount of money set aside for roads through VED, and the amount of expenditure on them.
Commenting on the TfL draft budget, London’s Transport Commissioner, Mike Brown, said: “This budget sets out what we will deliver in the next year as part of the Mayor’s Transport Strategy as we work to achieve his vision for 80 per cent of journeys to be made by walking, cycling and public transport by 2041.
“We will continue with our massive programme of investment in the transport network, modernising and boosting capacity, delivering healthier safer streets and providing affordable and accessible transport that will support London’s economic growth.
“This will be achieved alongside our extensive savings programme which is reducing our day to day costs, while protecting frontline services, as we manage a £700 million per year reduction in government subsidy.
“This will put us well on the way to generating an operating surplus for the first time in our history in 2021/22.”
Deputy Mayor for Transport, Val Shawcross, commented: “The next year will be a truly exciting time for London, with the opening of the Elizabeth Line, and major projects like the transformation of Oxford Street.
“At the same time, today’s budget shows how we’re also looking to the future with further tube modernisation and an unprecedented commitment to walking and cycling infrastructure.
“Through our major programme of TfL efficiencies, I’m proud that despite the removal of our government grant, we’re both freezing TfL fares and building a world-class transport network that will improve quality of life for Londoners all across our city.”
TfL’s board will consider the draft budget on Tuesday 20 March.
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.
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41 comments
Everyone does seem a bit tetchy today.. and it's not even a full moon tonight.
Maybe I have missed some detail on this story, but I honestly don't see where the benefit lies.
As far as I can see, in previous years, the government has spent more than the amount of money taken in from VED on roads, so ... are they planning just to continue as they are but call the VED monies ringfenced, or are they planning to carry on as they are and ADD the VED funds to the amount budgeted normally?
If the former, the only effect will be to give legitimacy to the drivers' argument that they pay for the roads and cyclists don't, therefore they have more rights, while making no difference to investment in the road infrastructure.
If the latter, there will be around £6Bn lost from other areas of the transport budget, and we can probably wave goodbye to any (serious) investment in cycling infrastructure as a result.
Still, good on Khan for suggesting cycling and walking in the context of, shock horror, transport budgets.
First thing, the renamed VED is not to be spent on "roads" but on "the Strategic Roads Network" ie those roads managed by the Highways Agency centrally – motorways and a few A roads. Map for England here
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/677493/s170085_Network_Manangement_Map.pdf
shows it's not quite true that none is in London, but very little is. Other roads, including those managed by TfL and London boroughs, will continue with their present funding.
More importantly, geographic ring-fencing on top of (or even if only instead of) purpose ring-fencing would get absurd. Road tax paid on vehicles registered in Cornwall to be only spent on the A38 and A30, etc.
I get what the title is trying to say, but "the growth in walking" sounds amusing - what were they doing before that? Slithering, sliding or moving on all-fours! The "growth in cycling" is true evolution!
growth in walking means convincing the people who drive a few yards to the shops for twenty Rothmans and a bag of Wotsits to get off their arses, walk down there, and buy some quinoa and blueberries instead.
Get rid of "road tax"/VED completely and shift the burden entirely onto fuel. In one easy step, you've killed the argument and got a perfect pay-as-you-go road charging system that punishes the most polluting vehicles.
Extra duty on diesel obvs.
Cool, we can shift the educational burden on to parents and have a PAYG health service while we're at it.
No what he said was:
I know it's visible above but you don't seem to have read it. What you said is not even close to being distantly related to the point.
Am I correct in thinking that an added fuel duty punishes who use the facility directly while allowing the indirect beneficiaries to get away scott free.
Much like my need of education. No kids, no pay. No car, no pay.
Or is it more like the PAYG health care where you only pay for what you use?
I'm obviously confused (I'm not really).
How does anyone indirectly benefit from someone else burning fuel and get away with it "scott free"?
Oh Christ! It's back....
Not going to answer the question then?
Simply, no. Not to you, it's not worth the effort, mate.
Just another post you can't back up then.
That's right because not engaging with you is exactly the same as not being able to "back something up".
Fortunately you won't go on about it...
So you're not engaging with me by replying to my posts, novel approach.
I've seen you pull the same act multiple times, post nonsense and then have a hissy fit when asked to back it up.
No mate, I get that you have a zero tolerance to the internal combustion engine, that you can't see the bigger picture and that you'll follow me around and bang on about it until everyone has died of fucking boredom. I get that inspite of your less than perfect life, you're happy to criticize others.
I've heard you, I disagree with you now move the fuck on!
Still not backing up your nonsense are you?
Didn't really need three posts....
So sorry, I didn't ask for multiple posts. I hope you'll forgive me.
Something something something war on the motorist.
As a Northerner that visits the Capital 4/5 times a year, I had great fun for an hour on a Boris bike today.
City is full of wankers, on foot, bike and car. I wasn't embarrassed to be a cyclist but a member of the human race!
I used to drive in from the Northen home counties for best part of a decade but this was 15 years ago and I was lucky in that I had to be in for 7am and out by 4 at the latest (usually) so avoided most of the carnage but these days whenever I'm back there it's absolutely horrific, just descended into a free for all.
it's a losing battle, London is quite literally imploding and the hundreds of billions thrown at it won't/can't stop it from doing so unless drastic action is taken. Take Crossrail as an example, what is it now at £70Bn (Originally £14.8Bn), it'll still be a load of pony.
Personally I'd level the whole city, send the millions as migrants to other countries until it's rebuilt (isn't that the done thing these days?) but whilst levelling it keep some of the population back to be removed permanantly who won't be missed, repatriate the land back to the people and start again from scratch.
Probably cheaper than continually making a fucking hash of the whole thing and throwing more bad money at shite infra
Anyone who wants to own a car in a city or town must prove that they have somewhere off road to park it and on street parking on through roads is a non starter for all but the disabled.
Well it's a start in my fantasy solution.
https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsect...
432ED948-8A6F-450F-BC72-5BAC54870E44.png
Ah, the old regional comparison of income vs spend.
Even, in this instance, if you sidestep
"This is the first time that we have published country and regional statistics on public sector revenue and expenditure and, as such, it is appropriate that the statistics being released are classed as experimental statistics"
you're still hit square-on by
"All Category (i) profits are allocated to the location of the registered office. Category (ii) profits, which make up the majority of taxable profits, were allocated to countries according to the sub‐UK split of enterprises’ employment totals, or to the registered office if no employment data were available.
Company level Corporation Tax liabilities were assumed to be in line with the distribution of company level taxable profits. "
https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsect...
In the 15 years of my career spent working outside London for hugely profitable companies with enormous corporation tax bills, guess where the registered office has been, and where those profits and corporation taxes are applied in games like this one.
I have such mixed-feelings about that graph. On the one hand, I get weary of endless resentment from...non-Londoners, when money gets spent on London in part because that's where investment gets the most returns.
On the other hand, most of the plus side of bar chart is down to the City, which is in good part just dodgy chancers shuffling other people's money around, and still doesn't seem like a sustainable way to finance an economy.
Also - how much of the money spent on 'London' is actually Crossrail - which as far as I can make out is for the benefit of anyone _but_ Londoners, being mainly intended to let people from outside London get through the city without having to interact with it? Crossrail is _not_ really 'spending on London', its money being spent to drill a hole through it for the benefit of outsiders, so I'm not convinced it should be included.
London is on track to the first city in the developed western world to count as a 'mega city', with a population of over 10 million. We could rename it Mega City One for a start. People move to London because of jobs basically, though the madness of Brexit may limit the speed of growth. I think flattening it is a bit of a non starter. The world's biggest city is Tokyo, with a population of 32 million as I recall, if you include the satellite towns. Seoul and Mexico City both have populations of about 22 million, though defining accurate numbers for the latter are hard due to the numbers of illegal barrios. Cairo, Rio de Janeiro, Istanbul, Mumbai, Shanghai and Bangkok are all in the mega city club too, along with a few others. The thing about London's growth is that there is a chance for it to be better planned than for any of the existing mega cities (just a chance though).
Using funding to help develop cycling infrastructure would be a good step for London. I doubt cash from vehicle taxation would be made available. What I do find rather sad about Khan's vision for London is that while is is ensuring public transport and cycling are being developed, he is not also promotoring the use of powered two wheelers. In fact the policies in place at present will actually limit the use of powered two wheelers and also impact on the safety for powered two wheeler riders.
Fucking moaning northerners in moaning about London shock.
Is that all you do? Anything else to take up your time? Life so great/shit you need to de-stress by stereotyping 10 million people?
Fine. Fuck off back up north and stay there. Luckily I know enough northerners myself to know you're just the usual minority of bigoted Muppets that every region has.
Xx
Fucking moaning Southerners in moaning about Northerners shocker, that's ALL you do! (statement not question) Anything else to take up your time, like more bitching about Northerners, you destress by being an ignorant head in the sand idiot. Fine, off you fuck, just fuck off completely and stay fucked off, anywhere but this forum and the UK. Luckily I know enough people in the South myself and haing lived in the South for 29 years to know you're just the usual minority of bigoted clueless muppet that mostly occurs in that there London.
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