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'Road tax' is coming... but not for cyclists

Chancellor Jeremy Hunt will reportedly announce in next week's Budget that electric car owners will have to pay vehicle excise duty for the first time...

Pay attention to discourse around cycling for long enough online, down the pub, on radio phone-ins or talk shows and you are sure to hear mention of 'road tax' eventually, but it is not cyclists who are going to be asked to pay vehicle excise duty (or VED, to give it its proper name) by Jeremy Hunt in next week's Budget.

The Daily Mail is reporting the Chancellor will use Thursday's Budget to change the current Treasury rules and require owners of emission-free vehicles to pay VED for the first time in a bid to plug a projected £7 billion shortfall.

Chancellor Hunt yesterday warned he would be forced to make "eye-watering" decisions in next week's Budget, with an estimated £54 billion hole in public finances to fill and a "tough road ahead" for the UK.

The news comes as the Bank of England warned we could be facing a two-year recession, the longest on record, but is likely to be controversial as it will be a disincentive for motorists to switch to electric vehicles.

The Mail's political editor Jason Groves reports extending VED to electric vehicle owners comes as the Treasury has "mounting concern" that "the drive for net zero will rob the government of huge tax revenues paid by motorists".

Emission-free vehicles are exempt from the £165 standard VED rate and the £335 premium supplement for vehicles costing more than £40,000, and the Treasury fears more people switching to electric could result in £7 billion lost in VED and £27 billion in lost fuel duty.

What is 'road tax'?

Road tax or vehicle excise duty (VED) is a tax collected by the DVLA, with vehicle owners paying at least the first year based on the CO2 emissions of their vehicle. While vehicles registered prior to April 2017 pay annually primarily on their official CO2 emissions, vehicles registered after April 2017, after the first year, pay an annual fixed rate of £165 (plus the luxury £335 supplement if the list price is more than £40,000).

The Office for Budget Responsibility estimates that in 2022-23 VED will raise £7.2 billion, equivalent to around £250 per household and 0.3 per cent of national income.

Dan is the road.cc news editor and joined in 2020 having previously written about nearly every other sport under the sun for the Express, and the weird and wonderful world of non-league football for The Non-League Paper. Dan has been at road.cc for four years and mainly writes news and tech articles as well as the occasional feature. He has hopefully kept you entertained on the live blog too.

Never fast enough to take things on the bike too seriously, when he's not working you'll find him exploring the south of England by two wheels at a leisurely weekend pace, or enjoying his favourite Scottish roads when visiting family. Sometimes he'll even load up the bags and ride up the whole way, he's a bit strange like that.

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113 comments

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mattw replied to cyclisto | 2 years ago
0 likes

My 'E-Bike' is ~13kg. I think.

(11kg hybrid + Gruber Assist iirc, so quite vintage.).

I thought E-Bikes were in the Cycle to Work scheme, whatever it is called. Do they not also get travel expenses like a car?

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OnYerBike | 2 years ago
3 likes

Surprised no-one has mentioned "Road Pricing" yet. It certainly seems to me that the logic for road pricing is compelling.

It is, in theory, flexible enough to deal with pretty much all of the issues raised - the calculation could include a factor for vehicle size/weight, a factor for vehicle tailpipe emissions, a factor for time of day, a factor for location etc. 

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Lozcan | 2 years ago
4 likes

The Daily Fail, what kinda cretin reads that shhhhhhite?

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Rik Mayals unde... | 2 years ago
5 likes

Good move. Forget the emissions, the fact is that many EVs are huge. And they cause congestion too, even if they are not pumping emissions out. The excise duty should be to encourage drivers not to drive everywhere when there are viable options.

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chrisonabike replied to Rik Mayals underpants | 2 years ago
11 likes

All electric cars do is move the exhaust emissions somewhere else.  Everything else remains the same (energy and resource usage, size, road wear, humans crashing them into things, noise once they're going above 20mph or so, particulates from brakes and tyre wear, taking up space when parked, need for infra for fuelling the vehicles...).  Now emitting elsewhere does have benefits: a) you get economies of scale / your emissions may "just" be CO2 and not all the soot / catalytic converter particles that ICEs give you and b) renewables and nuclear can contribute.  So it is a form of harm minimization and not to be sneezed (or coughed) at.  It does add the issue of "lots of batteries" though.

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levestane replied to chrisonabike | 2 years ago
4 likes

EVs have a raft of extra resourse needs and waste outputs associated with electronics, electric motors, batteries etc. Small EVs are useful in cities to reduce air pollution, but EVs are just as impactful on the ecosphere as fossil fuel vehicles. The only rational approach is reduction of resourse use and waste production.

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hawkinspeter replied to chrisonabike | 2 years ago
4 likes

chrisonatrike wrote:

All electric cars do is move the exhaust emissions somewhere else.  Everything else remains the same (energy and resource usage, size, road wear, humans crashing them into things, noise once they're going above 20mph or so, particulates from brakes and tyre wear, taking up space when parked, need for infra for fuelling the vehicles...).  Now emitting elsewhere does have benefits: a) you get economies of scale / your emissions may "just" be CO2 and not all the soot / catalytic converter particles that ICEs give you and b) renewables and nuclear can contribute.  So it is a form of harm minimization and not to be sneezed (or coughed) at.  It does add the issue of "lots of batteries" though.

Don't forget that EVs are significantly heavier than ICE vehicles and so they produce comparatively more tyre pollution. Thanks to their weight, they probably produce more brake dust pollution, but they sometimes use regenerative braking, so I don't know how they compare.

The other issues with EVs are that their batteries can't be easily recycled and their batteries require nickel, cobalt and lithium to be mined which is a toxic and filthy process. There's also the question of how our electricity infrastructure needs to be changed to deal with potentially millions of EVs.

There's advantages to EVs, but the real advantage comes from people using smaller vehicles for personal transport e.g. e-cycles, e-scooters.

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mattw replied to chrisonabike | 2 years ago
1 like

I don't thinks that "just  moves the exhaust emissions somewhere else" is quite right. Though I am with you on "a form of harm minimisation" - but so is everything.

They are significantly reduced by decarbonisation of electricity supply.

The radio programme pushed on here a few days ago - "Net Zero : A Very British Problem" Transport episode (strange title - it is a more universal problem). quoted a figure of 75% less carbon emitted over the lifecycle of electric vs fossil fueled car.

It's at about 27:15.
https://www.bbc.co.uk/sounds/play/m001c6wp

Background
https://www.carbonbrief.org/factcheck-how-electric-vehicles-help-to-tack...

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BalladOfStruth replied to mattw | 2 years ago
3 likes

mattw wrote:

...quoted a figure of 75% less carbon emitted over the lifecycle of electric vs fossil fueled car.

Does that include the production of the vehicle? There was a recent study (made by Volvo, so possibly a pinch of salt required) which indicated that EVs are so much more polluting to build that they need to do 70,000 miles to break even with a ICE's "total carbon footprint".

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chrisonabike replied to BalladOfStruth | 2 years ago
1 like

I'd like to see the sums (will probably go check).  Comparing "like with like" is more tricky.  I'll accept "better than present".   However I am slightly suspicious of numbers and there is definitely frank lying in favour of a good story ("zero emissions!").

Although you've got to draw the line somewhere we have been more-or-less consciously ignoring the "externalities" of many of our "goods" and especially cars.  Hence the common trope of "I'm a cash cow!  Do you know that UK motorists pay *far* more than the cost of building roads!" - well maybe, but not enough to cover the cost of health care, damage to buildings, bollards and bridges etc.

Our "clean" power comes of course with its own fossil fuel budget e.g. transporting the materials and maintaining the structures, the vast amounts of concrete and steel manufactured for this etc.

We've outsourced a lot of our manufacturing from the West to places where the percentage of energy coming from fossil fuels (and more polluting ones at that) is much higher than here.  Another "emit elsewhere" even when we can say "look - no smoky exhausts or chimneys at my factory here!"  Of course that issue may be similar between electric vehicles and existing ICE vehicles.  I don't know what difference the extra weight / batteries make in terms of "carbon budget".  I'm pretty sure that e.g. Chinese-run mining concerns in Africa (or scouring the sea bed) don't come with an "environmentally approved" or "future proof" stamp.

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Rich_cb replied to BalladOfStruth | 2 years ago
0 likes

That was based on the average carbon intensity for electricity worldwide.

In the UK (where electricity is far less carbon intensive) it would be about 40-45000 miles depending on time of day that you charged.

IIRC according to said study lifetime carbon emissions for an EV were 12 tonnes lower than for an ICE equivalent.

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Rich_cb replied to Rik Mayals underpants | 2 years ago
8 likes

I agree that taxation should encourage a reduction in driving.

Unfortunately VED does nothing of the sort. You pay the same regardless of mileage.

A tax that varied with mileage, vehicle size and fuel would be a far better option.

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Rik Mayals unde... replied to Rich_cb | 2 years ago
9 likes

I had a discussion with someone once, he complained about sitting in traffic every day on his way to work. He spent about an hour and a half in congestion, travelling to and from work, a journey that he could do on a bike using a nature trail shared path in 20 minutes.

After I patiently explained it to him, he still didn't get it.

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Rich_cb replied to Rik Mayals underpants | 2 years ago
5 likes

I occasionally have to travel across Cardiff from one work site to another.

I'm usually on my bike and am invariably the first team member there.

The usual reaction is disbelief. How can a bike possibly be faster than a car?

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Bungle_52 replied to Rich_cb | 2 years ago
2 likes

Just tax fuel and include third party insurance. I reckon £3 a litre would be a good start.

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mark1a replied to Bungle_52 | 2 years ago
0 likes

For a long time (pre-EV) I always thought that was the way ahead, would wipe out VED & insurance evasion at a stroke, but it's difficult to tax domestic electricity so would not catch EVs.

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Bungle_52 replied to mark1a | 2 years ago
1 like

mark1a wrote:

For a long time (pre-EV) I always thought that was the way ahead, would wipe out VED & insurance evasion at a stroke, but it's difficult to tax domestic electricity so would not catch EVs.

That's an excellent point and a difficult one to solve. I guess it would be easy to tax public charging points and may be some kind of tax on batteries which will presumably need to be replaced more often if used more.

Putting some of the tax on to brake parts and tyres would also be a partial solution.

It would encourage electric car take up while the problem is being looked at though, which I guess is a good start.

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Rich_cb replied to Bungle_52 | 2 years ago
1 like

That would certainly be the neatest way of doing it.

Probably nearly impossible politically though. If it was done gradually it might be achievable but unfortunately then we'd be at the point were most cars were EVs by the time it was up to speed.

However, given that we're about to get walloped with all manner of tax rises this is the probably the best opportunity to get it done.

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srchar | 2 years ago
9 likes

If I were in charge, VED wouldn't be banded, and it would have nothing to do with tailpipe emissions, which local pollution charges like the ULEZ would target instead. VED bands, like Council Tax bands, are essentially caps on the top end. We don't need them.

I'd implement a simple calculation along the lines of:

(weight_in_tons ^4) * (width_in_m ^2) + (list_price/100) = annual VED

This would give rough VED amounts as follows:

  • Lamborghini Urus: £1900
  • Range Rover: £1350
  • Ford Fiesta: £200
  • Citroen Ami: £80
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hmas1974 replied to srchar | 2 years ago
2 likes

VED is a ludicrously outdated concept. Given that the supposed purpose of 'road tax' is to fund highway maintenance, vehicles with highest kerb weight should by charged accordingly.

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ShutTheFrontDawes replied to hmas1974 | 2 years ago
1 like

I agree that taxation on cars should increase with the damage caused (though in my opinion distance traveled is much more significant than kerb weight - a 10tonne lorry driven 6mi will cause significantly less damage than a 2tonne car driven 20,000mi), but VED is certainly not an outdated concept.

VED never was intended to pay for the maintenance of roads. VED goes into the general fund, and road maintenance is paid from the general fund, so there is no direct link for VED paying for road upkeep.

The purpose of VED was to reduce CO2 emissions - a significant greenhouse gas and contributor to climate change. The fact that so many cars now have such low (or nil) VED payable is a clear sign that this particular government policy has worked.

If the government removes VED now without replacing it with something that keeps CO2 emissions low, all that good work could be undone.

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mark1a replied to ShutTheFrontDawes | 2 years ago
1 like

ShutTheFrontDawes wrote:

VED never was intended to pay for the maintenance of roads. VED goes into the general fund, and road maintenance is paid from the general fund, so there is no direct link for VED paying for road upkeep.

The purpose of VED was to reduce CO2 emissions - a significant greenhouse gas and contributor to climate change. The fact that so many cars now have such low (or nil) VED payable is a clear sign that this particular government policy has worked.

This is not quite true, from early 20th century to 1937, the Road Fund was hypothecated for the building and maitenence of roads, from then on until (IIRC) 2001, it was a flat rate per vehicle class, and tnen a scale of bands were introduced based on CO2 emissions. This made way for the "rush for diesel", as these were more fuel efficient and had lower CO2 output. Ultimately, so many vehicles became either exempt or very low rate (less than £100), the latest scheme was introduced where vehicles registered after March 2017 attract a flat annual rate (currently £165), with a an uplift to £520 for the first 5 years if the list price new was over £40k.The first year rate is still a sliding scale based on emissions, however this is year 1 only.

Note that none of these are retrospective - a vehicle registered in 2000 will pay a flat rate, one registered between 2001-2017 will pay the emissions based rate, anything after March 2017 will pay the flat rate.

In my opinion, the way ahead has to be a usage based scheme.

 

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quiff replied to mark1a | 2 years ago
1 like

mark1a wrote:

ShutTheFrontDawes wrote:

VED never was intended to pay for the maintenance of roads. VED goes into the general fund, and road maintenance is paid from the general fund, so there is no direct link for VED paying for road upkeep.

This is not quite true, from early 20th century to 1937, the Road Fund was hypothecated for the building and maitenence of roads

Yes - and apparently even during the period when the Road Fund was hypothecated to road maintenance, the pot was infamously used for other purposes anyway, so it became known as the Raid Fund.

 

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Hirsute | 2 years ago
4 likes

Needs something to take account of mass and torque and mileage.
Although the fairest way is likely to be too oblique for most people.

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ktache replied to Hirsute | 2 years ago
7 likes

Tiny city ecars, should be encouraged. Lower tax than pointless huge ewankpanzer.

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chrisonabike replied to ktache | 2 years ago
1 like

Like a Canta? https://www.youtube.com/watch?v=B9ly7JjqEb0

Or a Leitra? https://www.youtube.com/watch?v=TQINk7Mnn5s

(I apologise again - it seems lycrist infiltration has taken place and the last is not a *e-car* but an ebike.  Or is it?)

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Mybike replied to ktache | 2 years ago
0 likes

At first it a good idea but after a year or two we'll have the same traffic as a full size car I think Japan had this idea

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chrisonabike | 2 years ago
3 likes

Time to take hirsute's advice (and others) I think, having been guilty myself.  It's all very well going for bait occasionally, but when someone's all but erected a sign saying "fIsHiNG hErE" and is casting about with a bit of old crisp wrapper on a string, or is just lobbing rocks into the water...

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chrisonabike replied to chrisonabike | 2 years ago
1 like

On "good ways to complain / take a critical stance" I would suggest the libertarian middle-aged grumpiness of BikesnobNYC.  And lo, he's only covered the recent "close pass on child", the tyre extinguishers, driving under the influence and some other stuff in all in one bloviation.  I don't agree will all the takes there but he writes it better than most.  Plus he has at least paid his dues at cycling, cycle activism, getting your kids cycling and indeed to the bank for his car.

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ktache replied to chrisonabike | 2 years ago
1 like

I don't know if I would say he was a libertarian, definitely not in the trump, tea party sort of way, maybe liberal, but with a bit of a socialist bent, not quite Bernie or Elizabeth Warren, but getting there in a new York democrat way.

Definitely Grumpy!

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