Fleet News

AA report challenges Government tax policy

A NEW report from the AA fundamentally challenges the Government's stance on taxing the motorist. 'Fair Payment for Road Users: A Review of Evidence on Social and Environmental Costs' argues that if taxes on drivers are being levied for environmental reasons, these taxes should actually be falling because cars are becoming cleaner.

The report was compiled by Professor David Newbery, director of applied economics at the University of Cambridge. 'Any attempt to impose further taxes on road users under the guise of charges for environmental and social costs will require a fundamental reappraisal of the whole system of charging road users and financing roads,' he said. 'This will establish a proper basis for various charges that road users should pay, into a charge for using the road, a green tax to cover social and environmental costs, and a transport tax.'

Without 'distinct, non-discriminatory and defensibly quantified' green taxes, motorists will view them as just another excuse to raise money, and very little to do with improving the environment, according to Newbery.

He believes there is neither evidence to suggest current transport taxes fail the test of sustainability nor that the forecast growth in road traffic is economically and environmentally unacceptable. Newbery described as 'totally unjustified' the Government's plans to double duty on fuel over the next 10 years - tax on petrol accounts for around 50p in a 65p litre - given that levels of pollution are likely to halve over the same period.

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