Car taxes add to inflation misery

CHANCELLOR ALISTAIR Darling is postponing his proposed 2p in the pound fuel tax rise scheduled for October. But this will bring little comfort to car drivers. Faced with higher fuel prices, around 43% of them will also be paying higher annual car taxes by April 2010.

Mark Pickersgill

This year the government introduces a so-called ‘green levy’ on heavier polluting cars. Any car registered after March 2001 will be subject to 13 car tax bands based on its fuel type and CO2 emissions.

A Renault Clio owner will pay less car tax in 2010, but the owner of a 4X4 Range Rover will pay up to £450 a year by 2010. Even owners of eight year old Ford Mondeos will see their annual car tax rise to £260 by next April.

These retrospective taxes will hit millions of families who depend on their cars for transport.

The government says the extra £1.2 billion raised by these increases will be invested in developing much needed greener, more efficient forms of energy.

But people will be sceptical: some see the government’s attitude towards cars as “nice little earners.” The average motorist pays £1,800 a year in fuel duty, car tax, VAT and other levies – up 50% in the last decade.

Fuel duty and VAT make up 60% of the price of petrol at the pumps. £50 billion is collected in taxes from road users, but only £8 billion is spent on improving roads. Some people have no option but to use their cars as other forms of transport are inaccessible for them and woefully underfunded.

Britain’s privatised railways received £5 billion in government subsidies but billions more needs to be spent to improve the rail network and ease overcrowding.

The money raised in road taxes and oil companies’ and car manufacturers’ huge profits are not invested in developing an alternative to the internal combustion engine or to fund public transport.

Instead, car manufacturers and oil companies have used slick marketing campaigns to get people buying large, gas-guzzling vehicles such as 4×4 Sports Utility Vehicles (SUVs). After the 1970s oil crisis, the US Congress mandated US carmakers to build smaller, more fuel-efficient cars. What they got was the SUV.

US car manufacturers marketed SUVs as everyday vehicles but, as they were classified as light trucks, they were not subject to the same limits on fuel efficiency as cars. Selling SUVs gave carmakers larger profit margins; last year they made up half of all vehicle sales in the USA! Oil companies gained too; up until a year ago SUVs accounted for 40% of US fuel consumption.

This annual vehicle tax rise will prove highly unpopular. With the rapidly rising cost of living, workers see this as another attack on their finances. The government may be forced into another u-turn and abandon this part of their ‘green agenda’.

Under capitalism, fuel taxes will not improve our transport system, reduce pollution or lessen climate change. Big business’ only motive is the pursuit of profit.

The car industry, energy companies and the whole transport system must be brought into public ownership and run under democratic workers’ control.

Then we can plan and run our transport system to suit people’s needs and eliminate environmental damage, benefiting all of society.