Road spending falls to a quarter of motoring tax income 07 Nov 2014

Chancellor makes 9p per mile from drivers

Road users are now paying four times more money to the Chancellor in motoring taxation than is being spent by the government on the roads.

A report for the RAC Foundation shows that in 2012, £30.7 billion was raised from direct motoring taxation (excluding VAT): £24.8 billion from fuel duty and £5.9 billion from VED.

However in the same year just £7.5 billion (24% of motoring tax income) was spent on the road network: £3 billion of it on national roads and £4.5 billion on local roads.

Spending on roads and motoring tax income in recent years (in outturn prices, not inflation adjusted):

Year

2008

2009

2010

2011

2012

Average

Tax income

VED & fuel duty excluding VAT

£28.9 bn

£29.5 bn

£30.8 bn

£30.9 bn

£30.7 bn

£30.2 bn

Expenditure on roads

Local and national

£8.8 bn

£9.7 bn

£8.9 bn

£7.9 bn

£7.5bn

£8.6 bn

Expenditure as % of taxation

30%

33%

29%

26%

24%

28%

Note. The source data for these tables are presented in a mix of calendar and financial years. For ease of reference we have presented the data as all being based on calendar years.

Allowing for inflation spending on roads has actually fallen by 22% over the past five years.

The report was written by transport consultant David Bayliss. His study shows that the Chancellor now receives, in broad terms, a net 9p per mile travelled by car and van drivers. (Or 6p per mile per occupant mile.)

By way of comparison, overall:

  • bus passengers are subsidised 10p per mile (including concessionary fares support)
  • rail passengers are subsidised 14p per mile
  • London Underground passengers are subsidised 16p per mile

Professor Stephen Glaister, director of the RAC Foundation, said:

“Over the past five years the gap between the Chancellor’s income from motoring tax and what he spends on roads has widened sharply.

“At the same time the pothole backlog has been growing and local authorities are warning that spending commitments on social care and environmental services means there will be even less money available to maintain our highways in the future.

“This research does not pass judgment on which forms of transport should be subsidised and to what extent – these are public policy matters - but it does make abundantly clear what a good source of income drivers are for the Treasury, contributing about 7% of all tax revenue the Chancellor receives.

“It is right that motorists should pay something to the Exchequer in recognition of the impacts of driving in terms of congestion, accidents and emissions. But we also need a reasonable level of expenditure on the road network. Over recent years that has not happened. And that is to the detriment of all road users, not just car drivers.”

An interactive version of the chart above, showing exact numbers, is available to embed on websites. See code below in notes to editors.

ENDS

Contact:

Philip Gomm – Head of External Communications – RAC Foundation

philip.gomm@racfoundation.org |020 7747 3445 | 07711 776448 | 020 7389 0601 (ISDN)

Notes to editors:

The RAC Foundation is a transport policy and research organisation that explores the economic, mobility, safety and environmental issues relating to roads and their users. The Foundation publishes independent and authoritative research with which it promotes informed debate and advocates policy in the interest of the responsible motorist.

The RAC Foundation is a registered charity, number 1002705.

This is a link to the report – Public Expenditure, Taxes and Subsidies: Land transport in Great Britain - by David Bayliss which is available to download under embargo:

http://www.racfoundation.org/assets/rac_foundation/content/downloadables/Transport_finances_Bayliss_October_2014_final.pdf

David Bayliss is a chartered engineer and town planner. He started his career with Manchester Corporation and then moved to the Greater London Council where he became Chief Transport Planner. Subsequently as Director of Planning for London Transport he was involved in planning the Docklands Light Railway, the Jubilee Line Extension and Croydon Tramlink. On retirement from London Transport in 1999 he became a director of Halcrow Consulting, a position he held for ten years. During his career he has been involved in almost all aspects of domestic transport, and has been an advisor to a number of international organisations and overseas governments. He has written and lectured widely and is currently a trustee of the Rees Jeffreys Road Fund and of the RAC Foundation.

To embed an interactive version of the chart above - Public road expenditure and taxation in the UK,outturn prices, 1979-2012outturn prices, 1979-2012 – please use this code and credit the RAC Foundation:

<iframe src="https://docs.google.com/spreadsheets/d/15HlVzt-JjHz5j9OqGcPDHWJhYS5NTZzQN0eSUhMAizo/pubchart?oid=1437259045&amp;format=interactive" frameborder="0" scrolling="no" width="510" height="400"></iframe>

 

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