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Drivers don't trust ministers on "unfair" taxes

24/07/2009 18:47

LONDON (Reuters) - MPs criticised the government on Friday over taxes it levies on motorists, saying drivers do not trust ministers because they have handled the issue so badly.

Ministers' inconsistent attempts to justify rises have been seen as unfair by motorists, and presenting fuel duty as a "green tax" has damaged the image of environmental taxation, the House of Commons Transport Committee said.

"We are concerned that motorists are mistrustful of the government regarding taxes," the committee's report said.

"The government has been inconsistent in the way it has justified motoring taxes. Fuel duty has been presented, at different times, as a tool to reduce carbon emissions, a source of general revenue, and a means to fund transport investment."

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The committee said the government's changes to vehicle excise duty (VED) levied on car ownership, announced in the 2008 Budget, were perceived as "complex, retrospective and unfair."

"The government handled a phased set of increases to vehicle excise duty so badly they tarnished the image of environmental taxes," said Louise Ellman, the committee chairman.

MPs said the fairest system was to tax people through fuel duty rather than the VED, saying this did more to encourage fuel efficiency and reduce CO2 emissions.

"We recognise that economic factors will limit how much revenue can be raised by this method," Ellman said.

The reports' other conclusions included:

* Voluntary road pricing schemes, where VED or fuel duty is traded for per-mile charges, should be considered.

* The London congestion charge remains expensive to run and if similar schemes are to be used elsewhere a less costly way of administering them needs to be found.

* Parking charges should be proportionate and justified, with MPs questioning whether the charges should be used for wider purposes.

* Parking tickets should not be used as a "blatant" way of raising extra revenue from motorists.

Motoring organisations said drivers got little back from the government in return for the 45 billion pounds they paid in taxes every year.

"We are pleased the committee agrees with us that there should be a shift from taxing car ownership towards charging for road usage," said Professor Stephen Glaister, Director of the RAC Foundation.

"Every other public utility is charged for on the basis of use and there is a strong argument for doing so when it comes to roads."

Edmund King, AA President, said it was right that MPs had backed calls not to use parking charges as a way to make extra cash, and added there needed to be "cast-iron guarantees" on any voluntary road pricing schemes .

"An AA Populus poll showed that if road pricing was introduced, 86 percent do not believe government would deliver any promised quid-pro-quo reforms to motoring taxation," he said.

(Reporting by Michael Holden; Editing by Steve Addison)

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