HOW to tax motoring?
By which I don’t mean how to treat motorists as ‘cash cows’, as Deputy Gollop once famously suggested. The question is not about how to tax motorists more, but rather how to raise the current level of revenue from drivers but in a far more sustainable way.
Of course the issue has been brought to the fore again by Policy and Resources suggesting a mileage tax. This has brought forth reactions of anger, incredulity and even the odd bemused laugh.
I am not so cynical.
There is little meeting of minds over the issue of motoring taxes. A bit like Brexit, the only consensus seems to be against any plan put forward, rather than in favour of any alternative scheme.
Let us take a step back in time. As a callow young deputy I was strongly in favour of scrapping motor tax and putting extra duty on fuel instead. It seemed like a no-brainer. It would be fairer because those who drove the most would pay the most. It would be cheaper to collect and where was the efficiency in taxing the same group in two different ways?
Wind forward a decade or so to when the States finally did get around to seriously debating the idea and my view had swung through 180 degrees. In fact the late Deputy Bill Bell and I were the main speakers against the reform.
Why? Well, it would further narrow Guernsey’s tax base and remove the ability to use the motor tax system to encourage vehicles suited to Guernsey roads and discourage those patently unsuited to local driving conditions. Also, even back then it was clear that fuel usage would drop in the medium term. Indeed, I remember Deputy Bell, who was president of the electricity board, taking me for a spin in an early electric vehicle.
So clearly I have no philosophical objection to bringing back a form of motor tax, perhaps based on width, but let’s not forget recent history.
A lot of people are now jumping on the motor tax bandwagon in response to the Policy and Resources Committee’s mileage tax idea. That’s fine and dandy, but when Deputy Kuttelwascher and I first raised the idea of bringing back a form of motor tax, because we could see that relying solely on the duties on fuel was unsustainable, there was widespread public and political opposition.
Anyway, is P&R’s idea really so daft? What is wrong with charging those who use their cars sparingly less than those who drive a lot? I remain to be convinced over the detail and the practicality, but surely the principle is sound, subject to certain caveats, such as:
u The technology would need to be cheap and reliable in order to measure securely how far each vehicle had been driven in Guernsey.
u The system would need to respect privacy. It is one thing to log how far each car has been driven but not where it has been driven. We don’t want Big Brother watching us.
u The system would need to be banded so that people were charged less per mile for a micro car than for a Bentley. If this was done, it could marry some of the benefits of motor tax and fuel duty without the need for either.
u Special dispensation would need to be built in for certain high mileage drivers such as taxis or commercial vehicles. Perhaps these could pay their way through an annual ‘commercial motor tax’ instead?
u It would be nice if tourists could pay their way too, although I doubt that it would make much difference to the amount raised either way.
Now, I have no idea if any of the above is possible. Technology is not my strong suit. Instinctively it all sounds like pie in the sky. That said, 20 years ago I would probably have dismissed the idea that one day I would be paying bills, shopping and booking flights or accommodation from the comfort of my kitchen table as equally outlandish.
So how am I going to vote on this question? I am certainly not going to agree that our system for charging motorists will change to one of mileage but then that is not what we are being asked to do.
On balance, I am mindful to suspend my disbelief and agree that the concept should be given a trial as I think that if it can be made to work cheaply and reliably and with the correct nuances to influence behaviour, it could actually be a good thing.
Politically I am an old dog these days, but I am always up for being taught new tricks. If other deputies prefer the easy route of populist derision then I think the onus is on them to come up with a workable alternative as the current system is completely unsustainable.