Scrap Vehicle Excise Duty and hypothecate a proportion of fuel duty to pay for road infrastructure

Instead of having to individually tax motor vehicles, hypothecate a proportion of the fuel duty, or introduce a new fuel duty on  petrol and diesel, but charge it at the wholesale level rather than in the petrol forecourt. Although it is helpful for the person buying the fuel to know how much of the money they are spending is going towards the cost of the fuel they are buying its not necessary to have some calculation and reconcilliation going on at the till. Just collect it of the wholesale business each time a tanker is sent out to deliver fuel to the forecourt.

Why the contribution is important

If VED is eliminated then we no longer need to pay the civil service, police, courts or prisons to detect when vehicles are untaxed, pursue drivers of untaxed vehicles, prosecute drivers of untaxed vehicles or ultimately imprison them. Unless the driver is STEALING the fuel, they are paying their share of the costs of road costs. The more someone drives, the more aggresively they drive, the more fuel they will use, the more wear and tear their vehicle will be responsible for, and so they will contribute more at no increased cost to the government since the fuel wholesale business will be paying and passing on the cost to the forecourt who will then pass on the cost to the retail fuel purchaser just like the would when the wholesale prices go up anyway. This has the additional benefit of allowing vistors to the island to contribute their share of the costs assuming they buy petrol or diesel on the island. People taking their Manx registered vehicles off the island already do not encounter any additonal costs temporaily driving these vehicles in other territories and so should not have any additional costs incurred either.

by OldSailor on April 09, 2017 at 07:59PM

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Average rating: 4.6
Based on: 3 votes


  • Posted by dpfellows April 09, 2017 at 21:00

    How would you check that vehicles are insured? One way used in some other legislatures is to include a compulsory 3rd party insurance element within VED - which in your case could be included in the amount hypothecated.

    Two benefits to add:

    1. It would encourage people to switch to public transport, and
    2. It fits in well with environmental and Biosphere credentials - higher consumption vehicles emit more CO2 and noxious emissions so there would be a strong incentive to move to low consumption/low emission vehicles over time

    I suspect tourists would fill up to the brim (as they and locals do now) in Morecambe before boarding the BMC.

    Mr Gawne and his Department said in the past that what you propose was not legally possible. They did not define what laws prevented it nor whether the said laws could be changed.

    Done properly it could be a good move, would be easy to collect as the systems are already there to collect excise and VAT on fuel and should certainly lead to a saving of jobs.

    As said above it ties in well with the Biosphere - it could really create a lot of PR and interest in the UK and Ireland if it was launched as a 'green measure'.

    Be prepared for a significant increase in fuel price per litre to get the equivalent of VED funded and be prepared for a complete break in the ability to compare fuel prices between here and the UK.
  • Posted by xt512 April 09, 2017 at 23:24

    excellent Idea as the vehicles that pollute the most will pay the most.
  • Posted by OldSailor April 12, 2017 at 17:04

    Yes, good idea on the third party insurance too. Anyone driving off the island can buy a policy to cover them before departing.
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