Almost 1.4 million new cars registered in Great Britain in 2013 were exempt from Vehicle Excise Duty (VED) in their first year on the road.

This is almost two-thirds (63%) of the total of 2.2 million new cars registered.

The cars were exempt from VED because they emitted less than 131gCO2/km and fell into VED bands A-D.

In the first year on the road any vehicle that meets this target is zero rated for VED.

Things change from year two onwards when only those vehicles emitting less than 101gCO2/km (Band A) are completely exempt from VED.

However this still means that – assuming the rules stay the same – 324,000 cars bought last year will never be liable for VED.

This is a table of the VED bands and registration figures for each band for 2013.

VED Band CO2 Emissions Cars registered in 2013
A Up to 100g/km 324,000
B 101-110g/km 272,000
C 111-120g/km 430,000
D 121-130g/km 370,000
E 131-140g/km 301,000
F 141-150g/km 182,000
G 151-165g/km 153,000
H 166-175g/km 63,000
I 176-185g/km 33,000
J 186-200g/km 35,000
K 201-225g/km 18,000
L 226-255g/km 20,000
M Over 255g/km 10,000
TOTAL   2.2 million

A presentation to the Westminster Energy, Environment and Transport Forum by Philip Gomm

I want to start by talking about a friend of mine called Nick. He is a conscientious and loving son who enjoyed a very close relationship with his father.

For some time Nick’s father had been seriously ill and Nick was making regular journeys between East Kent and Essex to spend time at his father’s bedside.

A fortnight ago Nick received a call to say his father had taken a dramatic turn for the worse. Immediately Nick jumped in the car and headed off to be with him.

Unfortunately Nick got stuck in a jam. When his father died, Nick wasn’t sitting at his bedside but sitting in nose-to-tail traffic on the M25.

It sounds melodramatic, but that is the real, human cost of years of under investment in the road network, a creaking network that will come under more pressure as the economy improves and the population grows. Even if you believe that we have reached peak car – that point at which individual car use plateaus, or indeed falls, no matter how much wealthier we get – the explosion of people on this island will conspire to make congestion worse in the future not better.

There is hope on the horizon however.

When the government announced “the most radical change to the management of our [strategic] highways in nearly half a century, and the biggest investment in improvements since the seventies” we at the RAC Foundation very much welcomed it, notwithstanding that the bulk of the cash comes not in this parliament (what’s left of it) nor even at the beginning of the next, but is back loaded towards the end of the decade.

At least the money should be guaranteed. The RAC Foundation supports the transformation of the Highways Agency into a government owned company with a long term funding settlement similar to that on the railways. But even this raises as many questions as it answers, not least the role of the road user watchdog and, perhaps more importantly, what it being described as an independent monitor.

Note the word monitor rather than regulator. I am sure all of you out there will be familiar with this – Figure 2 of the recently published document: Transforming our Strategic Roads – A summary.

It says that the watchdog and the monitor are there to scrutinise costs, protect users’ interests and advise ministers. The word advise is worth underlining. The monitor is not a formal regulator. Ministers explain this purely advisory function by saying a formal economic regulator is not as necessary as it is in some other sectors because there are no direct charges to users. No direct charges? I hear 36 million drivers vehemently disagreeing. What about the £33 billion or so they contribute each year in fuel duty and VED alone?

What we are left with is a Strategic Highways Company – or companies, for the legislation allows for more than one – that will still be solely accountable to ministers. And reading the small print, even the funding is not guaranteed as the minister reserves the right to alter the terms of the Road Investment Strategy after appropriate consultation.

I will stay with the subject of drivers’ financial contribution to the Exchequer for a moment longer. The Los Angeles Times might not be required reading in your household but if it is then you could well have seen last week’s editorial in which it was pointed out that the United States Road Trust Fund is woefully short of money. The Fund is used to pay for road infrastructure maintenance and provision. Unfortunately, while the list of projects waiting to be undertaken has grown and grown the amount available to do it with has not. The level of Federal fuel tax – the source of the fund’s funding if you like – has remained the same since 1993.

Over here we face a different problem. In theory there should be more than enough cash to pay for roads. Of the £33 billion contribution made by drivers each year only a third goes back into spending on roads. What we do not have here is the US system of hypothecation for road funds. The RAC Foundation does not necessarily believe ring fencing a proportion of the tax received is the best way forward – after all spending requirements can change year to year and the amount of money set aside from motoring taxation may or may not be enough to enough to meet the needs – however it would at least send out the right message to drivers. That is, a defined proportion of what you pay is then returned to you in kind: spent on one of our most important national assets.

Already there are many sections of the road network where there is no spare peak time capacity. There is simply no slack in the system. Ironically this is what will make – in the short term – the massive investment harder to bear for many drivers. It is rare that road works – improvement or maintenance – do not have an impact on traffic flow so for those drivers already negotiating the busiest stretches of motorway the works will potentially add to their woes.

The job of managing the works programme is made harder by the stretching of the peak time travel periods. I can testify to that.

At the weekend I made a journey around the M25, along the southern section and I got stuck in traffic. The congestion was, according to the BBC’s travel presenter, the routine Saturday morning jam. Not Monday, not Friday, but Saturday.

Given what the man on the radio said and the fact that that I had experienced similar conditions the previous week you could argue that journey time reliability was actually very good: reliably slow. You could say the fault was mine for not allowing enough time for my journey.

But that is a depressing scenario. We must halt this slide towards lower and lower expectations and get a grip on how the road network is operated, funded and developed.

The RAC Foundation backs the Highways Agency and its initiatives such as Smart Motorways and All Lane running. We believe these latest proposals offer scope for significant reform that will benefit motorists. But we do not want to see an opportunity squandered. We should regard this as only the first point on the journey of change rather than the final destination. And when people ask why is investment and change necessary then we should point out the human cost of gridlock as much as the economic one.

Today’s news about a huge hike in the maximum level of fine that can be imposed on a speeding motorist casts a spotlight on what a magistrate’s sentencing powers actually are. Looking at speeding in particular, we see that it is a summary only offence, which means it is almost always dealt with at a Magistrates’ Court, though the case can be committed to the Crown Court for sentencing.

But presuming those on the bench decide to exercise their own powers, how will they set a fine? According to the Sentencing Guidelines Council there are three core elements:

“The amount of the fine must reflect the seriousness of the offence.

“The court must also take into account the financial circumstances of the offender; this applies whether it has the effect of increasing or reducing the fine. Normally a fine should be of an amount that is capable of being paid within 12 months.

“The aim is for the fine to have an equal impact on offenders with different financial circumstances; it should be a hardship but should not force the offender below a reasonable ‘subsistence’ level.”

The guidelines say a speeding offence attracts a Level 3 fine (which under the new regime will have a maximum limit of £4,000) or Level 4 if it is on the motorway (new maximum of £10,000)

Taking into account an offender’s income sounds sensible. What is surprising and not fully explained is why there has been such a huge increase in the maximum fine level now. What is the problem that is trying to be solved? Is there a large number of wealthy speeders for whom the current deterrent is not enough?

Interestingly, the number of people breaking the speed limit, in free flow traffic, has been falling on most roads for the best part of a decade as Department for Transport figures showed last week. Clearly there are still many who are defying the rules but it does suggest that, overall, motorists are becoming more law abiding rather than less.

Ministers should consider introducing a new scrappage scheme aimed at taking the oldest and most polluting diesel cars off the road.

Over the past two decades consumers have increasingly been buying diesels because of the better fuel consumption they achieve compared to petrol powered cars.

On a like for like basis diesels also emit fewer CO2 emissions.

This shift in buying habits means that of the 28 million cars on the road today, 10 million are diesels. In 1994 there were just 1.6 million diesels.

However diesel cars have historically tended to emit significantly more particulate matter (PM) and nitrogen oxide (NOx) than petrol cars both of which are linked to poor air quality and health issues. It is estimated that in the UK poor air quality currently reduces average life expectancy at birth by six months.

Over recent years so-called Euro standards have helped achieve significant reductions in PM emissions from diesels. However these have not been matched by falls in NOx. Only now does the latest set of standards – Euro 6 – offer the prospect of a reduction in this too.

But because cars have an average life span of more than a decade it will take several years for the newer, cleaner, models to work their way through the fleet.

Meanwhile drivers of the oldest vehicles may face increasing restrictions on their use.

A new report for the RAC Foundation by the environmental consultants Ricardo-AEA says there is an argument for discriminating against the highest emitting diesel vehicles in favour of other, less polluting, vehicle technologies. For example this could mean differential pricing in the London Congestion Charging Zone.

Many people believed that by buying diesels they would get better fuel consumption and help fight global warming through low CO2 emissions.

But such was the focus on the planet that policy makers missed the impact older diesel models in particular have on health in urban areas.The car industry has risen to the challenge of cleaning up diesel engines but we still need to deal with the legacy of the dirtiest diesels.

To hasten the take up of cars with the healthiest credentials ministers should consider another scrappage scheme. If they do not local politicians across the country will increasingly take matters into their own hands and restrict the movement of those vehicles which most compromise our well being.

You have to ask: if it is important to promote the take up of electric vehicles through the plug-in car grant scheme then shouldn’t government money also be made available to speed up the cleansing of the fleet in air quality terms?

According to the Ricardo-AEA report, “transport contributes some 30% of total nitrogen oxide (NOx) emissions and 20% of total PM emissions, but these are mostly concentrated on the road network in towns and cities where the majority of air quality limit breaches occur and where the population density is often high.”

The report also notes that EU limits on air quality-related emissions are much less stringent than those used by the World Health Organisation (WHO). Under the tighter WHO guidelines more than nine out of ten (91-96%) of people living in urban areas would be classed as being exposed to excess levels of the smallest type of particulates (PM2.5) which can get deep into the lungs.

By Professor Stephen Glaister, director of the RAC Foundation.

It was the economist John Maynard Keynes who said that in the long-run we are all dead, so an initial response to the Treasury’s attempt to assess the “dynamic effects of fuel duty reductions” might be: what’s the point?

But this would be the wrong reaction. First off, in this analysis of the impact of a continued freeze in fuel duty the Treasury has defined the long-term as 20 years: still a long way into the future but not out of step with other modelling and predictive work such as the Department for Transport’s traffic forecasts for 2040 published last summer. Also, if policy makers are not prepared to think through the consequences of their actions then mere voters might well ask whether they are fit to be making such decisions at all. For these reasons this is a welcome initiative.

To be fair there have always been assessments made of at least the direct impacts of a fiscal change. For example the freeze in duty announced at Budget 2013 showed an immediate £480 million cost to the Exchequer. But now those in charge want to look more widely.

The difficulty of the task is underlined by the ‘ifs’, ‘buts’ and ‘maybes’ that litter the text but that is no reason to be dismissive of the attempt or the conclusion.

It does however raise the real issue of how far out you try to measure the ripples and at what stage they get so interfered with by other policy interventions that they are impossible to distinguish.

The work says externalities such as increased traffic jams and air pollution have not been considered, though the report concludes that “it is not expected that the impacts on congestion would have a material effect on the main findings of the report”. Of course to draw this conclusion someone must have done a calculation and if that has been done shouldn’t it have been included?

The modelling does show “fuel duty to be one of the most distortive taxes.” The implication of this is that shifting the taxation balance to other goods and services which currently attract lower rates of tax would be preferable if the aim is to maintain constant revenue for the Exchequer.

More generally, what this research does potentially allow for is a strict financial assessment of proposed tax changes. It is similar to the principle of standardised Benefit Cost Ratio (BCR) calculations which allow a useful way of comparing apples with pears.

However the architects of this new Computable General Equilibrium (CGE) model will ultimately face the same reality those in the DfT encounter when they present the BCRs of competing transport schemes to ministers. Whatever the numbers say, the decision on what goes ahead and what doesn’t will be as much about politics as anything else.

From an intellectual point of the view, the real test of CGE will come somewhere down the line when the next generation of Treasury officials revisit these forecasts and testify to their accuracy, or not. Retrospective evaluation is a key component of most public projects. It should be here too.

The real disappointment would not be that this modelling turns out to be wrong but that nobody bothers to find out.

Between them the 22 parking authorities in Wales made a surplus (‘profit’) of £8.7 million in 2012-13.

Cardiff had the biggest surplus at £2.6 million. This was followed by Swansea (£1.3 million) and Gwynedd (£800,000).

Not that all local authorities were in profit. Of the 22, five – Torfaen, Flintshire, Newport, Vale of Glamorgan and Blaenau Gwent – recorded a deficit (‘loss’) on their parking activities. Nor is the level of profit necessarily indicative of one authority’s parking charges and enforcement policy versus another. The size of a council also has to be considered. However with significant sums of money being raised the big question is what it is being used for.

The numbers are revealed in analysis for the RAC Foundation by transport consultant David Leibling of the official accounts councils must legally make each year to the Welsh Government.

The surplus or deficit is calculated by taking parking income (on- and off-street parking charges and penalties) and deducting the costs of providing the parking. This is the full surplus/deficit table going back to 2007-8:

    Surplus (in £,000s)
    2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 % change 2012-13 on 2011-12
1 Cardiff 2322 2873 2909 1928 2788 2586 -7%
2 Swansea 607 467 1572 1254 1426 1256 -12%
3 Gwynedd 886 765 895 568 692 804 16%
4 Denbighshire 783 674 707 740 741 677 -9%
5 Conwy 508 568 292 468 458 560 22%
6 Carmarthenshire 761 358 288 241 387 487 26%
7 Rhondda Cynon Taf 168 228 456 467 353 478 35%
8 Monmouthshire 886 716 626 593 719 461 -36%
9 Powys 611 585 655 641 245 358 46%
10 Merthyr Tydfil 400 378 340 309 137 340 148%
11 Bridgend 900 706 621 372 436 300 -31%
12 Ceredigion 122 161 255 330 351 287 -18%
13 Pembrokeshire 78 39 102 134 262 264 1%
14 Neath Port Talbot -148 -214 -271 -84 283 247 -13%
15 Wrexham 321 361 403 491 520 240 -54%
16 Caerphilly 204 198 219 57 232 162 -30%
17 Isle of Anglesey -26 -31 71 89 51 55 8%
18 Torfaen -97 -93 -78 -194 -94 -39 -59%
19 Flintshire -134 -130 -215 -82 -112 -100 -11%
20 Newport 864 484 608 417 -191 -206 8%
21 Vale of Glamorgan -171 -126 -98 -18 -123 -238 93%
22 Blaenau Gwent -285 -307 -231 -245 -285 -311 9%
  Total 9561 8661 10126 8476 9277 8668 -7%

However the combined profit is 7% below that seen in the previous year (£9.3 million). But the report shows that despite this slight year on year decline the income figure for all councils from parking (before costs are deducted) is now at a record high of £30.4 million.

Cardiff (£6.2 million) and Swansea (£4.4 million) top the income table followed by Carmarthenshire (£2.1 million).

One reason why the national surplus figure has fallen despite a record level of income is because the cost to councils of running their parking operations (£21.8 million) has been rising.

The beauty of the numbers is that they are official. None of the councils can dispute the calculations because this is the data they themselves submit to the Welsh Government.

As ever with parking, the story is less about the numbers and more about what the councils are trying to achieve. Parking must always be about managing congestion, not raising money and we would recommend that all local authorities produce an annual parking report detailing their parking strategy.

Of course, most people, including drivers, recognise the need for parking enforcement. You only have to look at the chaos caused in Aberystwyth back in 2011 when there was no parking enforcement.

The Foundation’s work on parking in Wales come after we published last December similar analysis of the figures for the 353 English parking councils which revealed that they made a profit of £594 million in 2012-13.

It is proof of what we have probably all seen with our own eyes: every tenth vehicle on the road is now a van.

The number of vans (light commercial vehicles or LCVs) on Britain’s roads has been rising more than 2.5 times quicker than cars.

Between 2002 and 2012, the number of vans increased by 29% to 3.3 million.

Over the same period the number of cars rose by 11% to 28.7 million. By comparison, over the same decade the number of lorries (heavy goods vehicles or HGVs) on British roads fell by 5% to 460,000.

The highest percentage change in van ownership over that period was seen in the North East, followed by the South West and Wales. This is the full table:

REGION Number of vans – 2002 Number of vans – 2012 % change 2012 on 2002
North East 77,300 141,000 82.5%
South West 270,100 391,100 44.8%
Wales 124,400 176,000 41.4%
Scotland 174,600 241,500 38.3%
South East 388,700 526,400 35.4%
Yorks & Humber 182,000 246,000 35.2%
East Midlands 220,600 278,000 26%
West Midlands 307,900 382,000 24.1%
East 274,000 330,300 20.6%
London 194,000 203,000 4.7%
North West 282,500 294,500 4.2%
GREAT BRITAIN 2,542,300 3,280,600 29%

The RAC Foundation commissioned a report from the consultancy company AECOM to try and better understand what has been happening with van traffic. It shows that:

  • Almost one in two (44%) of UK registered vans visit London each year
  • In Europe only France, Spain and Italy have more vans registered than Britain
  • 95% of vans are diesel powered
  • 20% of vans change hands each year
  • 3% of vans (112,000) are 20 or more years older
  • Van traffic in Britain is predicted to almost double by 2040, rising twice as fast as overall traffic.

What exactly is behind all this? We can of course speculate.

In 2013 three-quarters of British adults shopped online and we have the highest rate of internet shopping in the EU. Intuitively you would think this has resulted in a big rise in home deliveries and hence van use but more research is needed in this area.

There is also reason to believe hauliers are switching away from larger vehicles because of changing delivery patterns and growing environmental restrictions on HGVs. It could also be that more and more people are running their own businesses and need a van to carry their goods and tools.

With congestion set to grow understanding this key aspect of road transport is vital.


Get every new post delivered to your Inbox.

Join 2,874 other followers

%d bloggers like this: