Thursday 21 March 2013

New road casualty stats by local authority

A new DfT website was launched today, which explains why, by and large, I avoid cycling on-road around my home territory of Haslemere, Surrey.  OK, I ride to the station, and I ride to the town centre and its shops, but I can do that on quiet residential streets and lanes where traffic is light.  For someone who was minded to do the same from here, however, it would be a different story.

Here are a few numbers gleaned from the site.  For 2011, comparing Surrey with its next-door neighbour Hampshire (which, for these purposes, excludes the main cities of Portsmouth and Southampton.  Surrey County Council covers all urban and rural communities within the county):

Resident population ('000)
Total road length (miles)
Total miles driven (million miles)
Road safety spend
Total (£'000 pa)
per resident (£ pa)
per mile of road (£ per mile)
per mile driven (£ per million m)
Total casualties
per 10,000 pop
per 100m miles

I haven’t shown casualties per mile.  In many ways that is a false comparison because it is inevitable that a big city will do badly on that score.  The Cities of London and Westminster for example score worst of all on that measure, but the volume of traffic, motorised, cyclised or pedestrian, is far higher – true casualty rates per person or per mile travelled are much worse in the country.

I also have shown only total casualties.  You could look at KSIs (killed or seriously injured) but in practical terms, the thing which deters people from walking or cycling is not the risk of death, rather it is the risk of any form of injury, even slight, a fact which the dinosaur cycling advocacy groups even now don’t fully recognise when they cite the surely-now-busted hypothesis of “safety in numbers”

Surrey’s spend on road safety is considerably lower, not only in pure value terms, but also by reference to its population, the size of its road network, and the total vehicle mileage driven.  Total casualties are considerably higher.

Well, there’s a surprise!

Wednesday 20 March 2013

A Cycling Budget

That, I guess, is what one refers to as “irony”.  Or oxymoron, perhaps.

In more than 30 years making my living as a tax expert, I don’t think I have ever seen a budget which had anything material to say about cycling.  There are of course occasional, peripheral measures:  the maximum permitted mileage rate for cycle travel allowances will change from time to time, as does the comparable benefit rate for car mileage.  Schemes such as the cycle to work scheme for tax-relieved purchase of a bicycle was introduced, and modified.  That really is about it.

Rates of tax or duty, which may indirectly impact cycling, also change from time to time.  Broadly speaking, there are two different approaches.  The first is taxes set as a rate on value:  income tax is levied as a percentage of income above various thresholds; capital gains tax similarly on capital gains from sale of assets (not including your own home);  VAT is a percentage of sales price of most goods and services; stamp duty a percentage of the sale price of some classes of asset, principally shares and real estate; Insurance Premium Tax is a sales tax on the value of an insurance premium.

The second is a tax or duty by quantity:  hydrocarbon fuels by the litre;  ditto alcoholic beverages; cigarettes by the pack, tobacco by the kilogram;  air passenger duty per flight.

So what is a tax increase?  Raising the rate of income tax is clearly a tax rise – paying more tax on the same income.  Increasing the rate of VAT is also clearly a tax rise – paying more VAT on goods whose cost hasn’t changed.

Is an increase in fuel duty a “tax rise”?  No, not really, unless it is significantly out of step with the increase in the price of fuel, and that is hard to measure because apart from pipeline delivered fuel like gas or electricity, the price is fairly volatile.  For example my last delivery of home heating oil cost about 59p per litre but the market price now is about 64p.  Come the summer, it might well drop again.

An increase in duty on road fuel has historically been set to follow inflation.  From time to time we may have something more, like the Fuel Duty Escalator:  this was supposed to be a year-on-year increase in the real cost of road fuel but it was only implemented once to my knowledge and, in any case, for all the chancellor’s – any chancellor’s – talk about tax rate changes a year or more out, the truth about our tax system is that the whole lot has to be set by Act of Parliament every single year, a safeguard which I believe was introduced when William Pitt the Younger first introduced income tax as a means of paying for fighting the Napoleonic Wars.  The Provisional Collection of Taxes Act permits a government to continue collecting taxes under last year’s Finance Act temporarily – until 4 August – but if they fail to obtain Royal Assent for a new act by then, they can no longer collect any tax!  That is why, in an election year, we typically have more than one Finance Act.  The first is to establish the right to collect taxes for another year, and is got out of the way before parliament is dissolved, and the second deals with all the matters of substance.

Anyway, back to the subject.  In among the budget documents which run to several hundred pages and which are mainly about obscure technical stuff like corporate members of limited liability partnerships, an HMRC press release confirms that the proposed 1.9p per litre increase in fuel duties, planned for September, has been cancelled.  In fact, there hasn’t been an increase in road fuel duties since George Osborne took office in 2010.  Had the “planned” increases not all been cancelled, like this one, road fuels would now be about 13p per litre more than they are now.    

In an inflationary environment, not increasing fuel duty is a tax cut on motoring. In my view, it sends all the wrong messages – of our total thrall to the car, the lack of imagination about alternatives, our willingness to bankrupt ourselves with billions spent addressing obesity, diabetes, heart disease etc, our lack of consideration for our children who will have to inherit the mess we have made, or our elderly who through no fault of their own can’t join the car club, or our poor who can’t afford to.

Self-interested lobbyists, claiming to speak on behalf of “the hard pressed motorist” or “hard working families” demand moratoria on duty increases.  They even demand cuts, to relieve pressure on our pockets, and to boost the economy.  They have been remarkably successful:  it is not only that there haven’t been any increases for nearly three years now, but the real cost of fuel, in constant price terms, has declined.  Rod King, of 20splenty, tweeted that the Sunday Times had printed a table which shows that the average annual spend on fuel has declined, from £1,508 in 1973 to £1,422 today, although to be fair this is more to do with improved fuel consumption of modern cars than the per-litre cost of fuel.  Having said that, the 1973 cost predates the Oil Shock and the Yom Kippur War of October 1973, when crude oil prices doubled almost overnight, and have never really come back down since.

I don’t know whether the ST is trying to make a point here – I rarely get round to the “Driving” supplement, so haven’t read the article – but they sound like perhaps they are not patsies for Big Car.  Not like the Daily Mail.  In its print edition today – I know, but when you are in a waiting room, trying to pass the time, you sometimes have to stoop so low – in a table of annual tax outlays it quotes the “average family” spending about £1,600 pa on fuel duty, compared with about £2,000 in VAT.

Although the provenance of this figure is Grant Thornton & KPMG, two major accounting firms, I have to say I find this figure implausible.  The current rate of road fuel duty for everything apart from LPG is a shade under 58p per litre.  At that rate, the “average family” must be buying 2,500 litres of petrol or diesel a year, in other words driving nearly 25,000 miles.  However, the point is that misinformation of this type is all part of the lobbying and special interest pleading of the motor industry and the big oil companies, through their patsies in the press.

You could relieve pressure, and boost business, every bit as easily, and a great deal more fairly, by cutting something else.  VAT apparently costs that “average family” more than fuel duty does, and applies to most of the things we buy – not basic food, children’s clothes, and a few other things, but even so poorer people are more likely to benefit from a VAT cut than a fuel duty cut, because they can’t afford cars so don’t buy petrol or diesel at all.  (Actually, a VAT cut would presumably cut the price of petrol too!)  National Insurance Contributions are heavily weighted towards lower earners – the employee contribution being only 2% above about £30k pa – so while savings would have to be passed on, a cut there would benefit lower income groups most – or arguably reduce the cost of employing new staff and so bring more people out of the dole office.  Cutting income tax for the low-paid, for example by increasing allowances but shrinking he basic rate band so the better off don’t benefit, would do more to help “hard-working families” than a fuel duty cut ever will.

But what do you suppose they gave us?  As Harry Lime would have said, “a Cuckoo Clock”

Wednesday 6 March 2013

"Ceud mille failte" to Haslemere and Hindhead

In a recent post I slipped in a shameless plug for the joys of off-road riding around my home town of Haslemere, on the donut-ring of commons which surround us.  This really has very little to do with cycling for transport or utility.  It is mainly about fun – exercise, great views, enjoying the open air. 

This south-western corner of Surrey contains large tracts of common land which are now mainly in the ownership of the National Trust.  It is a mixture of heath, broadleaf and conifer woodlands, some quite flat and some quite hilly.  It is criss-crossed by byways, bridleways and permissive paths of varying difficulty, from easily managed on all but the skinniest-rimmed road bikes, through to steep and rocky tracks requiring the right equipment and a reasonable level of skill – and fitness.

The commons are easily reached from the railway stations at Godalming and Haslemere, which have up to 4 services per hour, and smaller stations such as Milford, Witley and Liphook, with one or two services per hour.

And if you really must, you could always bring your bike on the back of your car.  Parking is generally quite straightforward, apart from Hindhead where the National Trust Café car park tends to fill up pretty quickly on any half-decent weekend.

A good source of inspiration for rides is the Routes page of the local cycle club, VCGH – .  They have about 35 routes mapped onto Ordnance Survey 1:50k or 1:25k mapping and saved as PDFs.  These are probably best seen as sources of inspiration, modified to taste, and I doubt they print to good enough quality to use for navigation – I am always meeting cyclists up on the hill who are unsure of where they are, so a proper OS map is advisable.

All of the routes are circular, and some take in one of the railway stations.  For example, the Tour of the Commons starts and finishes at Godalming station, and takes in Witley, Thursley, Hankley, Elstead, Ockley and Rodborough commons.  It involves a little on-road riding around Godalming itself but this is urban road with a 30 limit.  The ride is mainly quite level and on good unmade surfaces, although personally I would pass up the traverse of Thursley Common – if you have ever tried cycling on deep, soft, dry sand you will know what purgatory that is – and divert a little to the south into Thursley village where you can stop for refreshments at the Three Horseshoes Inn. 
The Three Horseshoes, Thursley
That way you could probably get away with a roadster bicycle as long as you have a decent gearbox.  Bear in mind that Hankley Common is owned by the MOD and is used for military exercises so departing from the statutory bridleways is frowned on when exercises are in progress, but in my experience our armed forces slope off for the weekend around Friday lunchtime – god help us if “the enemy” (whoever that is these days) launches an invasion at 4pm on Friday!

The Haslemere Members Alternative Route starts and finishes in Haslemere, and although not shown this way could easily use the station as terminus.  It takes in Black Down, one of the highest points in the south of England and a superb viewpoint across West Sussex known as the Temple of the Winds, then Marley and Linchmere commons, Liphook, Bramshott and Ludshot commons, the Devil’s Punchbowl and Hindhead Common.  Personally, I would join or leave the circuit from the town centre, where you can find a Costa, and an independent café, Hemingways, which I personally rate more highly, as it has proper cake.  Other good stops would be the National Trust café overlooking the Punchbowl at Hindhead, and the Wheatsheaf pub in Grayswood.
The Wheatsheaf, Grayswood
Surrey County Council has bid for grants from the Local Sustainable Transport Fund for the “Two Parks” – the new South Downs and New Forest National Parks – which was awarded some £3.5m for active and public transport initiatives.  In fact no part of the South Down National park is in Surrey itself, but parts of it are very close to the county border, notably right up to the Surrey-West Sussex border which is on the southern edge of Haslemere.  Phase 1 will involve some signing of routes from Haslemere rail station and following bridle paths through Marley and Linchmere commons to rejoin the rail line at Liphook station – a fairly easy and short ride which might suit families with children.  Phase 2 would involve signing a route towards the “Serpent Trail” which goes up to Black Down from its eastern side, and upgrading a section of bridle path which at the moment is badly degraded and difficult to negotiate.  I’m hoping that Surrey CC has taken on board my comments that the signed route should stay away as far as possible from the principal roads and instead pass through the town centre to benefit from quieter roads, and direct visitors into the retail area where they can shop or stop for a coffee.  Time will tell.

Friday 1 March 2013

Of vignettes and VAT

Yesterday, I followed a tweet from @citycyclists to thisannouncement, about a “vignette” system for foreign HGVs in the UK.  Henceforth, just as British HGVs generally have to pay to use roads on the continent, European HGVs will have to pay a charge for using British roads.

Apparently it would be discrimination forbidden by EU treaty for the same charge not to be applied to UK HGVs, so it will be, but they will get it rebated on their vehicle excise duty.

The announcement from the Cabinet Office opines that VED levels for HGVs are intended to reflect the different levels of damage caused to the road by the vehicle”.

Well, not really.  As I commented here, damage to roads is proportional to the square of a vehicle’s axle weight.  So, a 44 tonne 5-axle artic will on average impose an axle weight 15 times that of a family car.  That produces about 200 times the damage effect.  The top rate of VED for such behemoths is perhaps 10 times that of a small family car, so proportionately the HGV is paying only 5% as much as that car – and that is before you consider the vastly higher mileages of the big rigs.

Now I am onto a subject which is close to my heart – or my paycheck at any rate – taxation.  Commercial haulage vehicles pay about 30% less road fuel tax, per litre, than private cars.  Why?  Because they don’t pay VAT.

“Of course they do”, you cry.  Actually, they don’t.  VAT is an end-user tax.  Businesses, of any type or size, merely act as tax collectors on behalf of the government.  When you or I fill our supermarket trolley, we pay 20% VAT on items like chocolate, cakes, alcoholic drinks.  That is charged by the retailer, who hands over to HMRC the excess between what he collects from the customer and what he has paid to suppliers, transport companies etc, in a long chain which goes right back to the original raw materials suppliers.  So, they collect the tax from you, they don’t pay it themselves.

If you also put items like fresh meat and vegetables, newspapers etc, into your trolley, you pay no VAT on those because they are “zero-rated” – which means that the supply chain has in effect over-collected VAT and so is entitled to claim it back as a cash refund.  (You might like to consider that injury is added to insult, that your frozen horsemeat lasagne carries 20% VAT as a prepared ready-meal, while fresh lamb or beef does not.)

Anyway, I digress.  What I wanted to say was that HM Treasury invited suggestions from any quarter, whether professional or personal, on ideas for improving the tax system, and – in my personal capacity – I responded.  (I tweeted the link, by the way, so I hope others picked it up but I’m afraid the consultation is now closed).

My suggestion was that the taxation of motor vehicles and their fuel could be rebalanced, so that less tax fell on ownership of the vehicle, and more fell on use.  Whether or not I believe that the level of taxation of motor vehicles is high enough is irrelevant here – I was making a technical submission so I proposed it on a zero-sum basis.  In  any case, if you are going to raise car taxes you need to address the issue of people who can’t really afford a car but nonetheless are compelled to have one in order to hold down a rural job or have mobility as a disabled person etc.

According to AA statistics, around 25-30% of the annual cost of owning a car and using it an average amount is spent on fuel, the rest of course being depreciation, finance charges, maintenance and insurance etc.  While this sounds a lot, it nevertheless remains true that once you have stiffed yourself for the cost of buying and insuring etc a car, the marginal cost of actually using it, per mile travelled, is ridiculously low, even now with fuel prices rising.  It makes the choice of car over bus or train, or indeed foot or bike, too easy to make. 

If static taxes – those which don’t relate to mileage – were significantly cut, for example by reducing VAT to the minimum level permitted by EU law for purchase, maintenance and safety related spares such as tyres etc, and cutting VED to an admin charge level, if it is actually needed at all, the loss could then be made up by significantly increasing the rates of duty and perhaps VAT on fuel and other use-related charges such as parking. Of course, a far more rational way of charging for road use would be road-pricing itself, as proposed in this study by the Institute of Fiscal Studies for the RAC Foundation (believe it nor not!) but I suspect that the political will for that is some way off yet.

You might need to provide for duty rebates for commercial vehicles – assuming of course that you think that they pay enough motoring tax already, or are making a purely technical submission – because, as I say, they don’t actually pay VAT so the duty increases would far outweigh the savings on static taxes.

Anyway, the thinking is that we should be doing everything we can to reduce car use.  As VoleOSpeed says in his latest post, we might as well accept that the private car is here to stay, and indeed I have to admit I find mine jolly useful at times, like for longer journeys or heavier loads, but we could use them less and use alternatives more.  We all know that around a half of all car journeys in cities are less than 5km – half less than 5 miles outside urban centres – and these are eminently feasible distances to cycle, if conditions permitted.

This, in effect, is what the Dutch, and the Danes, and the Germans, already do.  VoleOSpeed mentions the 20% modal share in the Netherlands compared to the paltry 2% (if that) here, but curiously this does not mean that the Dutch own fewer cars than we do – according to this table Brits, Dutch and Danes have similar ownership levels and Germans are way above us in the “league” table.

They just know when it is appropriate to leave them at home, and we don’t.