Such a view would be disturbing if it was a junior minister in the foreign office. What makes it shocking is that the MP who holds this view is the Minister for Roads. At a meeting in parliament yesterday I asked the minister if he would retract a statement from last year when he had claimed “the motorist…predominantly pays for our roads.”
I assumed Mike Penning, MP for Hemel Hempstead, would retract his earlier statement. It was but a tiny part of a much longer speech on his love for motorsport. My story would have been ‘Minister backtracks on roads funding mistake and states official DfT line.’
Instead, he stuck to his guns. I taped the exchange. Listen below. It’s just under four minutes long. (The person saying “hypothecation” to the minister is Lord Hoffman, the former Law Lord).
I asked the minister, what pays for roads. He answered:
“Tax. Fuel duty and VED…Yes, it’s hypothecation but a percentage of it does come back in. I stand by it then, I stand by it now. The fact that someone pays for something doesn’t give them rights, it just means they contributed to it…I want to protect cyclists as much as possible but at the same time I also passionately believe the motorist in this country does pay for an awful lot of the service on the road.”
Before he shut down my questioning, I would have liked to ask the minister if his officials in the Department for Transport have ever briefed him on the funding of roads? The UK Government has a long-standing policy on the heresy of taxation ring-fencing. The dedication of the revenue of a specific tax for a specific expenditure purpose is rare. The main UK example of hypothecation is the TV licence fee, a ring-fencing of funds for the BBC.
Taxes and Charges on Road Users, a 2009 report by the Transport Select Committee, said hypothecation is “the establishment of a direct link between specific taxes or charges and specific expenditure. For example, taxes levied on alcohol might be earmarked for spending on hospitals. In the UK there is no such link for taxes.”
The report said:
“the Government opposes the idea of hypothecation of tax revenues. It argues that decisions about revenue raising and spending should be kept separate for two main reasons: if all income were to be hypothecated, it would create severe difficulties for those services that could not readily raise revenues, such as schools, hospitals, police and defence; and inefficiencies would result. For example, if a large sum was raised from road users, hypothecation would dictate that it was all spent on roads (or possibly other transport modes, such as buses), even if the public priority was for more investment in, say, education.”
Penning came into yesterday’s meeting – staged by the All Party Parliamentary Cycling Group, and chaired by Julian Huppert, the MP for Cambridge – ahead of one of his DfT aides and claimed he hadn’t seen the list of questions that meeting attendees had been asked to submit in advance.
Penning’s quick and erroneous defence of his statement of March 2011 should therefore be seen as his personal views, and would not be backed up by officials in the Department for Transport.
The official policy of the Policy and External Communications Directorate of the Driver and Vehicle Licensing Agency, an executive agency of the Department for Transport, is this:
“There has been no direct relationship between vehicle tax and road expenditure since 1937.”
The money paid by motorists does not go back directly to motorists. If it did, all hell would break loose. Interest groups of all creeds and colours would start demanding “their” tax contributions should only go to fund “their” projects. Society does not work that way; can not work that way.
There are no taxation opt-outs: married couples without kids cannot strike out the amount of tax that pays for schools; pacifists cannot strike out the amount of tax that goes on defence spending. And motorists can’t successfully demand that the money they give to the Government is given straight back to them in the shape of smoother, less congested roads.
Roads are a shared national resource, paid for by all taxpayers, not just motorists. The public highway is, by definition, for the benefit of the public, not a sub-set of the public.
In other words, to motorists it needs to be stressed: “You own a car, not the road.”
One of the first Tory MPs to realise that motorists will assert assumed rights to a road network they think they have paid for was Winston Churchill.
In 1926, he wanted to scrap the Road Fund, a pot of cash contributed by motorists and used to repair – not build – a few stretches of road in the 1920s.
To a deputation of rural interests, Churchill said his proposed abolition of the Road Fund was not anti-motorist:
“Let me say clearly, I have an expensive motor car, and use it a great deal, and I have nothing personal in my argument – I am speaking from a detached point of view.”
Churchill’s opposition to the Road Fund was largely financial – taxation ring-fencing was heretical then just as it is heretical today – but not exclusively so. Fearing motorists would lay claim to roads by dint of paying for a small portion of their repair, he wrote:
“It will be only a step from this for [motorists] to claim in a few years the moral ownership of the roads their contributions have created.”
In a note to Churchill by the man who had pushed Lloyd George to make the ring-fencing pledge to motorists in the first place, Austen Chamberlain wrote:
“I certainly never imagined such a statement could be construed by any sensible man as binding on Governments or Parliament with no regard to time or circumstances.”
In 1927, the Treasury noted that the main supporters of the Road Fund were private motoring organisations who wanted road improvements not for the good of the country but to drive faster: “it is clearly absurd that the State should be asked to provide large and ever-increasing sums for what are virtually pleasure racing tracks.”
The Road Fund was drained of cash in 1927 and finally abolished in 1937.
Belief in the continued existence of ‘road tax’ and the Road Fund was heavily engrained at the highest levels. Conservative MP Colonel JTC Moore Brabazon, Parliamentary Secretary at the Ministry of Transport in 1923-7, and even Minister for Transport in 1940-1, said in a 1932 speech in the House of Commons, that money that went to the Road Fund was
“motorists’ money. It is not Imperial taxation. It is money that comes from the motorists, to be spent on one definite thing, namely the roads.”
In this view – a view shared by Penning – Moore Brabazon was wrong. All tax payers pay for roads, just as all tax payers pay for hospitals and all tax payers pay for schools. Fuel duty and vehicle excise duty is paid into the consolidated fund – the national coffers – and is not, and can not, be used to pay for roads directly. Saying “motorists pay for roads” is the same as saying that “smokers pay for roads”. Indirectly, both do. And that’s the point: motorists do not pay directly for roads.
Motorists are taxed on buying and using their vehicles. VED is not a tax on roads, it’s now a tax on emissions: cars which spew the most CO2 pay the most Vehicle Excise Duty. Cars which spew less CO2, pay less VED. Cars in VED band A pay zero duty.
Tax-payers – some of whom own cars, some of whom don’t – pay for roads. Roads are paid for out of general and local taxation.
It’s important for ministers to get their facts right on this issue. Why? Because it’s an issue that causes danger for one class of road user: cyclists. Some motorists believe cyclists “don’t pay road tax” and have lesser rights to be on roads. This can lead to animosity towards cyclists, and even violence. And it’s doubly important for the Minister for Roads to get this right: he’s no longer a lone MP, he’s a minister of the crown and should recite official DfT policy.
Mike Penning is not a nuanced, shades-of-grey politician. A former soldier and fireman, he’s blunt and bruising. He’s also in a position of power and ought to be on top of his brief. On what and who pays for roads, he’s wrong. This is worrying.
Responding to this article, via Twitter, Julian Huppert MP said: “Ministers don’t have to come to APPGs. I want them to keep coming so we can change their minds on issues like this.”
My response was that shy bairns get nowt, and the minister should be held to account when he gets something factually wrong. Mike Penning may think his statement that motorists pay for roads is a non-issue but it’s not. The intimidation of cyclists for “not paying road tax” is a common occurrence. Penning is Minister for Roads (and road safety) not Minister for Cars.
Click to listen to the whole meeting: it’s 42 minutes long and includes questions asked by CTC and British Cycling on the DfTs ‘trial’ of longer lorries.
Does the fact the Minister for Roads doesn’t seem terribly au fait with what actually pays for roads bother you? Wear the iPayRoadTax jersey and tell the world!