Fuel duty hits green target

From David Rotherham.

SENATOR Terry Le Main’s suggestion that something like a cross between the old annual road tax and the discredited and unlamented vehicle emissions duty be introduced is as woolly as he himself admits, and not very well knitted either.

The replacement of the road tax with additional fuel duty is as perfectly targeted a green tax as one could imagine.

The production of CO2 is inseparably linked to the consumption of petrol.

A frugal user of a large car just for journeys where walking or cycling are ill-suited will pollute the Island and the world less than an indiscriminate user of a small car making all sorts of unnecessary journeys just because they can afford the petrol.

Obviously, an extravagant user of a large car will pollute more than anybody, but they will pay more for it, too, so fair is fair.

If it is felt that the current level of fuel duty is neither producing sufficient revenue, nor deterring sufficient traffic, it is a simple matter to hike it up to even more extortionate levels, until the political objectives are achieved.

A simple engine-size tax will be multiply unfair. Firstly, the glaring defect of the old VED was that diesel engines pump larger quantities of air more slowly than equivalent petrol engines, for greater fuel efficiency, and so, by the traditional engine size measurement of the air pumped on each revolution, were unfairly rated as larger.

Design and tuning differences between different engines of a given nominal capacity will also considerably affect their efficiency and emission levels, so that capacity-based taxation will have only a weak relationship to pollution.

Basic and ‘hot’ versions of the same model may have the same capacity, but the ‘hot’ version will inevitably burn extra fuel for the extra power.

So should a capacity tax be set to overcharge the basic model or undercharge the ‘hot’ one?

A century or more ago British cars were taxed on a derivative of capacity called RAC horsepower, and it had to be abandoned as unworkable long since.

There is no reasonable case for bringing back anything of the sort in the 21st century.