The Labour Party under Andy Burnham

[takno]

Just got back from holiday yesterday after the budget so I'm now playing catch up, and wondering about the transport side of it. I thought Labour were a bit more pro public transport than the Tories, and also desperate to raise £billions to fund their objectives, so why on earth would they not raise fuel taxes? A couple of years ago on holiday (in Europe) it was noticeable that their fuel prices were cheaper than ours but now it seems that UK fuel prices are getting lower and lower by comparison, and also in comparison with most other things, especially food etc. So why this huge favour to motorists by freezing fuel duty? What am I not understanding?

You and everybody else. I suspect the problem is that Starmer and Reeves didn't think about it at all beyond the narrative of petrol tax being a tax on working people. The environmental impact and the impact on some of the poorest in society from the bus changes is huge of course, but is lost in all the principles and people being very clear.

At least ending the "temporary" 5p cut would surely have been relatively uncontroversial, and sensible grown-ups like the IFS are throwing their hands up in despair, but it seems like Starmer and Reeves are too busy playing 5-dimensional political chess to make the obviously necessary choices.

I'm reasonably optimistic that there was just an overwhelming number of decisions to be made in this budget, and getting to the right place on transport was difficult to do. If so then you'd expect a reorienting to happen in future budgets, particularly next year if the economy is improving.

I'm a bit worried in general though that 100 year investment in HS2/NPR and the 50 year investment in transpennine is being seen as "supporting public transport", so further assaults on the wallets of the poor souls who have to travel on the railways that actually exist today are somehow morally justified. The big environmental action seems to be largely in aggressively stupid money pits like hydrogen and carbon capture rather than getting the basics right.

 

[DC1989]

I think the issue is if they weren't able to proceed with ending the temporary cut in fuel duty at this budget they certainly won't be able to at any future ones.

Still nothing on pay per mile or electric cars.... And each day that voting bloc of electric car owners gets bigger and bigger making any charges on them harder to politically achieve.

A big mess really

 

[Shrop]

I'm a bit worried in general though that 100 year investment in HS2/NPR and the 50 year investment in transpennine is being seen as "supporting public transport", so further assaults on the wallets of the poor souls who have to travel on the railways that actually exist today are somehow morally justified. The big environmental action seems to be largely in aggressively stupid money pits like hydrogen and carbon capture rather than getting the basics riright.

You could have hit the nail right on the head there, but surely what this says is that Labour simply don't understand transport and the environment. I'm happy to listen to any political Party and also for my vote to float depending on who talks the most sense, but in transport terms, to me this budget smacks of ignorance bordering on irresponsibility. Is there a defence for Labour on this point?

 

[Richard Scott]

You and everybody else. I suspect the problem is that Starmer and Reeves didn't think about it at all beyond the narrative of petrol tax being a tax on working people. The environmental impact and the impact on some of the poorest in society from the bus changes is huge of course, but is lost in all the principles and people being very clear.

At least ending the "temporary" 5p cut would surely have been relatively uncontroversial, and sensible grown-ups like the IFS are throwing their hands up in despair, but it seems like Starmer and Reeves are too busy playing 5-dimensional political chess to make the obviously necessary choices.

I'm reasonably optimistic that there was just an overwhelming number of decisions to be made in this budget, and getting to the right place on transport was difficult to do. If so then you'd expect a reorienting to happen in future budgets, particularly next year if the economy is improving.

I'm a bit worried in general though that 100 year investment in HS2/NPR and the 50 year investment in transpennine is being seen as "supporting public transport", so further assaults on the wallets of the poor souls who have to travel on the railways that actually exist today are somehow morally justified. The big environmental action seems to be largely in aggressively stupid money pits like hydrogen and carbon capture rather than getting the basics right.

To be honest fuel prices have dropped a lot anyway recently so 5p per litre added wouldn't have really been an issue. If they were going to do it then now would have been a sensible time.
Yo be honest, adding 5p per litre tax to fuel makes no difference to people's driving habits so won't benefit the environment but may have helped fund additional public transport that possibly would entice people out of their cars?

 

[LYradial]

Just got back from holiday yesterday after the budget so I'm now playing catch up, and wondering about the transport side of it. I thought Labour were a bit more pro public transport than the Tories, and also desperate to raise £billions to fund their objectives, so why on earth would they not raise fuel taxes? A couple of years ago on holiday (in Europe) it was noticeable that their fuel prices were cheaper than ours but now it seems that UK fuel prices are getting lower and lower by comparison, and also in comparison with most other things, especially food etc. So why this huge favour to motorists by freezing fuel duty? What am I not understanding?

Because it would impact on road haulage as well as motorists and push up food prices.

because they don’t want us all to rush off and buy cheap Chinese electric cars

because the world is awash with oil and the rich oil producers (who own lots of Britain) put pressure on them

 

[Richard Scott]

Because it would impact on road haulage as well as motorists and push up food prices.

because they don’t want us all to rush off and buy cheap Chinese electric cars

because the world is awash with oil and the rich oil producers (who own lots of Britain) put pressure on them

Do need to recognise that oil isn't just used as a fuel but in plastics and pharmaceuticals. If less is burned then it will just get cheaper anyway as we need it for the above, something that probably escapes the 'just stop oil' or similar campaigners.
It's also not good for the environment if people do rush off and buy Chinese electric cars (and buses, for that matter).

 

[Yew]

Yo be honest, adding 5p per litre tax to fuel makes no difference to people's driving habits so won't benefit the environment but may have helped fund additional public transport that possibly would entice people out of their cars?

Using the stick "entices" nobody. If we want to entice people on to public transport, it needs to be integrated, reliable, fast, comfortable and cheap.

 

[takno]

Using the stick "entices" nobody. If we want to entice people on to public transport, it needs to be integrated, reliable, fast, comfortable and cheap.

All of which needs to be paid for, and 3 billion quid would cover a decent chunk of that.

In any case, taking the 5p cut away would hardly be using a stick - it's really just taking away one of the carrots which have for whatever reason been left pointing people towards driving.

 

[Shrop]

Because it would impact on road haulage as well as motorists and push up food prices.

because they don’t want us all to rush off and buy cheap Chinese electric cars

because the world is awash with oil and the rich oil producers (who own lots of Britain) put pressure on them

No, I don't agree at all. Fuel was around 50p a litre more expensive 2 years ago, but the roads were hardly any quieter, most people were as welded to their cars as ever, the only difference was that they complained about the prices.
As for road haulage, it still ran, and food prices did indeed rocket, but in the 2 years since, and now that fuel prices have plummeted, have we really noticed food prices dropping along with fuel prices? I can't say I have.
And as for Chinese electric cars, the electricity to fuel them goes up with fuel prices doesn't it? And since when have electric cars been cheap?

 

[brad465]

I think the issue is if they weren't able to proceed with ending the temporary cut in fuel duty at this budget they certainly won't be able to at any future ones.

Still nothing on pay per mile or electric cars.... And each day that voting bloc of electric car owners gets bigger and bigger making any charges on them harder to politically achieve.

There is one key tax impact that will affect electric cars, which is they will pay VED from April 2025 (already introduced prior to Labour taking office).

 

[simonw]

I think the issue is if they weren't able to proceed with ending the temporary cut in fuel duty at this budget they certainly won't be able to at any future ones.

Still nothing on pay per mile or electric cars.... And each day that voting bloc of electric car owners gets bigger and bigger making any charges on them harder to politically achieve.

A big mess really

Working out how to measure people's mileage accurately and charge for it especially if it's not a flat rate is not simple. To expect this to be a priority at this point is a little odd, IMHO.

 

[david1212]

I too am surprised / puzzled why the 5p cut on fuel duty was not cancelled, after all it was a temporary.

....
Still nothing on pay per mile or electric cars.... And each day that voting bloc of electric car owners gets bigger and bigger making any charges on them harder to politically achieve.
....

While how this will be implemented still has to be decided now should be the time to state that the loss of fuel duty and 15% VAT when charging at home has to be recovered.


For employers the increase in NI from 13.8% to 15% once the dust settles ought just get factored into their costs and charges with no major issues.
The combination of the minimum wage increase of 77p/hour and paying 15% NI on an additional £4100 of wages will hit much harder. Combined on 40 hours a week full time it is over £2200 per year. For a seasonal business where now no payment to the treasury for an employee up to just under 800 hours / year which e.g. is just under 20 weeks at 40 hours a week combined a cost of over £1200. Directly passing this on to the customer may well back fire in a reduction in sales. Ultimately for some the tipping point of not being viable hence more unemployment, empty premesis and rattling down the chain the loss of purchases from suppliers ?

Going back not to the Blair era but pre 1980's would a Labour government have done similar to this ? Or would they have done something like add say 2.5% to the minimum wage, increased the starting personal allowance by £1000 but then decreased the next level threshold by £2500 i.e £13,571 & £47,771 ?

 

[takno]

Working out how to measure people's mileage accurately and charge for it especially if it's not a flat rate is not simple. To expect this to be a priority at this point is a little odd, IMHO.

I think there is probably some logic in getting charges in at a low rate based on your mileage at VAT time. Make it say 0.2p per mile and it won't be worth the effort or risk for most people to do anything to avoid it.

Whilst that only covers maybe half of the 5p off petrol tax, it establishes per-mile charging as a thing. That makes the next stage easier, which is a small increase, possibly with a discount for installing a smart meter which gives you discounts for less impactful driving.

The stages after that of dragging everybody to metered usage are all much simpler once you have the principle in place.

That said, from my point of view at least reversing the 5p discount was more or less the least they should have done, and they didn't do that, so the rest is just pointless speculation.

 

[Howardh]

Working out how to measure people's mileage accurately and charge for it especially if it's not a flat rate is not simple. To expect this to be a priority at this point is a little odd, IMHO.

I read that it could be done via the MOT, but many cars simply don't reach their next MOT as they've either crashed and been written off, scrapped or sold. Or even off the road at MOT time. Then what do you do with foreign cars/vans etc?

As you rightly say, PPM isn't as simple as it looks - and in any case with duty on fuel the further you go the more you pay anyway!

 

[takno]

I read that it could be done via the MOT, but many cars simply don't reach their next MOT as they've either crashed and been written off, scrapped or sold. Or even off the road at MOT time. Then what do you do with foreign cars/vans etc?

As you rightly say, PPM isn't as simple as it looks - and in any case with duty on fuel the further you go the more you pay anyway!

It's really not that many cars which don't make their next MOT, and all of them have to be properly written off, at the very least to avoid paying car tax forever. Foreign vehicles can pay a flat levy on entry, or pay the mileage on exit.

Compared to the expected level of fraud from dodgy MOT centres I doubt either of these are much more than a rounding error. The point is to start building the principles, and to start with the simplest option on the way to finding a solution which will work for higher tax levels

 

[Noddy]

There is one key tax impact that will affect electric cars, which is they will pay VED from April 2025 (already introduced prior to Labour taking office).

My understanding is EVs will only pay the lowest rate (£10), while other vehicles will increase (up to double on over 75g CO2). Assuming I’m reading this correctly, it’s a good environmental policy.

 

[brad465]

I too am surprised / puzzled why the 5p cut on fuel duty was not cancelled, after all it was a temporary.

There's probably only so much that can be done in one budget and this one was already massive for tax rises/policy changes. There will be at least 3 more budgets this parliament (3 if election after 4 years, 4 if a full 5-year term is seen), so its reversal could still come, and Labour haven't ruled out further tax measures. I'd argue though they'd need relatively low inflation still in place and to do it in the next budget, as too close to the next election will be more damaging (hence why most tax rises occur early in a parliament, regardless of government colours).

My understanding is EVs will only pay the lowest rate (£10), while other vehicles will increase (up to double on over 75g CO2). Assuming I’m reading this correctly, it’s a good environmental policy.

That's only the first year, there is then a flat annual rate of £165 that every vehicle pays regardless of emission bracket which EVs will then pay as well. The first year rate is the one with all the variation.

 

[Noddy]

T

That's only the first year, there is then a flat annual rate of £165 that every vehicle pays regardless of emission bracket which EVs will then pay as well. The first year rate is the one with all the variation.

From what I’ve read over 75g CO2 vehicle VED (which is basically any pure ICE and mHEV) is rising to £400 next year, while EVs remain as is.

== Doublepost prevention - post automatically merged: 31 Oct 2024 ==

The Government also said it would change the VED first-year rates for new cars registered on or after 1 April 2025 to strengthen incentives to purchase zero-emission and electric cars, by widening the differentials between zero-emission, hybrid and internal combustion engine (ICE) cars.

Zero-emission cars will pay the lowest first-year rate at £10 until 2029/30.

Rates for cars emitting 1-50g/km of CO2, including hybrid vehicles, will increase to £110 for 2025/26, while rates for cars emitting 51-75g/km of CO2, including hybrid vehicles, will increase to £130 for 2025/26.
All other rates for cars emitting 76g/km of CO2 and above will double from their current level for 2025/26.

From this website:

Autumn Budget 2024: Company car tax incentives for EVs to continue past 2028

Tax incentives for fully electric company car drivers will remain in place after 2028 but plug-in hybrids will be hit by higher rates, the Treasury has announced in the Autumn Budget.

fleetworld.co.uk

 

[JamesT]

T


From what I’ve read over 75g CO2 vehicle VED (which is basically any pure ICE and mHEV) is rising to £400 next year, while EVs remain as is.

== Doublepost prevention - post automatically merged: 31 Oct 2024 ==



From this website:

Autumn Budget 2024: Company car tax incentives for EVs to continue past 2028

Tax incentives for fully electric company car drivers will remain in place after 2028 but plug-in hybrids will be hit by higher rates, the Treasury has announced in the Autumn Budget.

fleetworld.co.uk

That's all talking about the first year rates.

Vehicle tax for electric, zero and low emission vehicles

How the Vehicle Excise Duty (VED) changes affect your vehicle.

www.gov.uk

From 1 April 2025, drivers of electric and low emission cars, vans and motorcycles will need to pay vehicle tax in the same way as drivers of petrol and diesel vehicles. This change will apply to both new and existing vehicles.
...
From the second tax payment onwards, these vehicles will pay the standard rate. This is £190 for 2024 but is subject to change for 2025.

ICE cars registered since 2017 haven't had banding on their emissions after the first year.

 

[Noddy]

That's all talking about the first year rates.

Vehicle tax for electric, zero and low emission vehicles

How the Vehicle Excise Duty (VED) changes affect your vehicle.

www.gov.uk

ICE cars registered since 2017 haven't had banding on their emissions after the first year.

So you pay £400 the first year and £165 thereafter?

Your link is dated 9 April 2024 and I *think* is out of date-superceeded yesterday?

 

[JamesT]

So you pay £400 the first year and £165 thereafter?

https://www.honestjohn.co.uk/car-tax/ has a useful table of the tax rates for this year and next year. Though I don't see a band with £400 for the first year, so not quite sure what that would be. Though if you're referring to a standard rate of £165, that was last year's rate (this year is £190), so perhaps that figure is also out of date.

 

[Noddy]

https://www.honestjohn.co.uk/car-tax/ has a useful table of the tax rates for this year and next year. Though I don't see a band with £400 for the first year, so not quite sure what that would be. Though if you're referring to a standard rate of £165, that was last year's rate (this year is £190), so perhaps that figure is also out of date.

Yep, you are quite correct it does only apply to first year, and then the standard rate applies there after.

 

[edwin_m]

Do need to recognise that oil isn't just used as a fuel but in plastics and pharmaceuticals. If less is burned then it will just get cheaper anyway as we need it for the above, something that probably escapes the 'just stop oil' or similar campaigners.
It's also not good for the environment if people do rush off and buy Chinese electric cars (and buses, for that matter).

The price impact of reduced consumption is likely to be small, because oil producers have a big range of costs depending how efficient their particular production is - for example whether they are offshore or in remote areas or inhospitable climates. If the price goes down then the producers with the highest cost base will cease to be viable and stop producing, so the supply will reduce and supply and demand effects will nullify part of the price reduction. If the price drop resulted in more consumption then all the existing producers would continue and more high-cost production would come on line, so the price would end up higher than originally.

Is your reason for saying that rushing off and buying Chinese electric cars is bad for the environment due to them being electric, or Chinese, or rushed, or some other factor?

It's really not that many cars which don't make their next MOT, and all of them have to be properly written off, at the very least to avoid paying car tax forever. Foreign vehicles can pay a flat levy on entry, or pay the mileage on exit.

Compared to the expected level of fraud from dodgy MOT centres I doubt either of these are much more than a rounding error. The point is to start building the principles, and to start with the simplest option on the way to finding a solution which will work for higher tax levels

Vehicles under three years old that don't yet need MOT also need to be considered. I don't think an annual declaration would work because if a spot check found a suspiciously large mileage, the keeper could just claim they'd done a lot of miles since the last declaration. Perhaps these vehicles could be checked and certified by a MOT-approved garage either as part of an annual service or separately for a small fee.

 

[Tetchytyke]

Ultimately for some the tipping point of not being viable hence more unemployment, empty premesis and rattling down the chain the loss of purchases from suppliers ?

The NI employment allowance has been pretty much doubled, from £5,500 to £10,000, precisely to protect small employers from the effect of this change. This allowance, which is more of a disregard really, reduces an employer's NI contribution by this amount if they pay less than £100,000 employer NIC per year. This is per employer and not per employee.

Employers, especially recruitment/employment agencies, tried to get around this by setting up hundreds of shell companies- each getting the allowance- but that loophole was shut a couple of years ago.

 

[Richard Scott]

Is your reason for saying that rushing off and buying Chinese electric cars is bad for the environment due to them being electric, or Chinese, or rushed, or some other factor?

A lot of Chinese manufacturer is still powered by fossil fuels, the actual manufacturer of batteries is not exactly environmentally friendly and then have to ship them over.
EVs may be better in cities than ICE cars for emissions but birth to death CO2, it's marginal. Politicians seem to be pushing EVs as some kind of saviour, which they are not.
Where's the protection for our industries? No point blaming other governments as that's gone before. Now is important and don't see Labour making any real policies to help our industry.

 

[simonw]

I think there is probably some logic in getting charges in at a low rate based on your mileage at VAT time. Make it say 0.2p per mile and it won't be worth the effort or risk for most people to do anything to avoid it.

Whilst that only covers maybe half of the 5p off petrol tax, it establishes per-mile charging as a thing. That makes the next stage easier, which is a small increase, possibly with a discount for installing a smart meter which gives you discounts for less impactful driving.

The stages after that of dragging everybody to metered usage are all much simpler once you have the principle in place.

That said, from my point of view at least reversing the 5p discount was more or less the least they should have done, and they didn't do that, so the rest is just pointless speculation.

But you need to establish some method to collect the data first.

 

[ainsworth74]

I would suggest that it's time to take the discussion of road pricing to a new thread as, rightly or wrongly, it doesn't appear to be current or even future Labour policy.

 

[Blackpool boy]

Using the stick "entices" nobody. If we want to entice people on to public transport, it needs to be integrated, reliable, fast, comfortable and cheap.

And thats certainly not going to happen in one budget and on the first one of a new government

 

[DC1989]

Any chance of the Chelsea-Hackney line / Crossrail 2 this parliament??

 

[edwin_m]

Any chance of the Chelsea-Hackney line / Crossrail 2 this parliament??

No. Crossrail 1 was formally inaugurated in 2009, should have opened in 2018 and actually opened in 2022. So even if they agreed it tomorrow it would be the best part of a decade away. And I doubt they will give the go-ahead, as the priorities even within the rail network are likely to be elsewhere.