Dear Mr Burkinshaw
I thought I should just enlighten you a little about tax. I am a senior tax adviser and have been for three decades, so I should know.
Firstly, there is only one “hypothecated” tax in the UK – that is to say, a tax whose revenues are dedicated to a specific expenditure. That is the BBC TV Licence Fee. Not even National Insurance Contributions are actually hypothecated. Some people imagine that they go to make a “National Insurance Fund”, but that has not been the case for decades. “Road Tax” was abolished by Winston Churchill in 1937, mainly because he could predict that it would lead motorists to gain a false sense of entitlement to roads which were built before the car was even invented. (In fact, roads which were good enough to promote the rise of the motor car originate from the lobbying of cycling groups in the late 19th century, as Carlton Reid’s new book “Roads were not built for cars” explains).
All other expenditures are pooled, and are met from a general fund of all taxes. So, when I pay income tax (and a lot of it too), I pay for roads as well as police, defence, health service, schools etc. When I pay national insurance contributions I am actually paying another form of tax. When I pay VAT on goods and services ditto. Same for insurance premium tax, stamp duty etc.
As a homeowner, I pay council tax. A chunk of that goes to pay for road building and maintenance. Then of course there is the Police Authority precept, to pay for the local police force one of whose roles is to patrol our roads and deal with accidents etc as well as speeding and dangerous driving. And cyclists running red lights, which I admit does – just occasionally – happen.
Oh, and before I forget, I pay motoring taxes, because – like about 85% of all cyclists – I also own and run a car. Two, actually. They cost me £405 in vehicle excise duty (a pollution-based tax) this year, plus about £50 in insurance premium tax on the motor policies, and of course fuel duty and the VAT on fuel.
Secondly, motoring taxes do not fully defray the cost of roads. Motoring organisations would have you believe that motoring taxes massively overreach expenditure on roads. If you only take account of new road building that is true, but what about maintenance and repair? What about policing? Ambulance and fire services attending road accidents? Hospital costs for road users injured in accidents? Costs associated with road deaths, including loss of economic capacity? General health costs directly associated with traffic, such as asthma, bronchitis and conditions exacerbated by pollutants, and indirectly, such as diabetes and heart disease due to lack of exercise? These “externalities” together with direct road building/maintenance costs add up to about €1500 per person per year, while motoring taxes work out at about €750 per year, according to new European Commission research (which I expect you don’t recognise, because it is European).
I do hope you find this information useful,