Return to ‘motor tax’ ruled out by majority

The fixed fee recommendation was made by a working group formed as a result of a States decision in June directing P&R to look at other ways of raising revenues from motoring.

This was initiated by the ongoing decline in the amount of fuel being sold, largely blamed on the increased efficiency of engines and changes in driving habits.

The working group comprised politicians from P&R, Environment & Infrastructure and Deputy Peter Roffey, whose amendment set the process in motion.

The consensus of the group was that this year’s Budget should propose the bringing in of a fixed annual fee and that this would be introduced in 2020.

This charge would initially have been responsible for collecting some 20% of the total annual revenue currently derived from duty on fuel, and the idea was for it to increase annually as fuel consumption continued to fall.

But this, said the majority of P&R, was tantamount to reintroducing motor tax and so the idea was rejected in favour of the more traditional increase in duty – although the Budget notes that P&R vice-president Lyndon Trott did not support the committee’s recommendation.

P&R said it will now look at other ways of raising revenue from motoring.

‘The Policy & Resources Committee intends to work closely with Environment & Infrastructure, which is leading on the energy policy development, to consider alternative and innovative ways for generating sustainable revenues relating to motoring, with particular emphasis on the early introduction of a means of deriving income from vehicles that do not use fossil fuels.’

It notes that the 3.1p increase in excise duty recommended will not increase in real terms the average total amount paid in duty per individual ‘due to a lower volume of fuel consumed as a result of increased efficiency of engines and changes in driving habits’.