by David Mentiply

The idea that central government can influence the behaviour of its citizens via taxation still holds sway in most democracies across the world.

When government becomes dependent on the revenues from a specific tax, however, an obvious conflict of interest emerges.

Vehicle excise duty and road fuel duties, for instance, raise in excess of £20 billion for the treasury each year – but where does the money go? Public opinion seems to regard such taxes as pure revenue-raising by Whitehall. People do not believe that the money goes towards investment in alternative transport infrastructure. In part, this is due to a failure of consecutive governments to communicate to the public how and where they have invested the revenues from road and vehicle duties. In the main, however, public perceptions have been spot on. The revenues raised from the above taxes have swelled the coffers of the treasury and have not been used to offset carbon emissions. Indeed, in spite of the relatively high duty levels in the UK, compared, for instance with the US, the investment in and development of alternatives to petrol and diesel fuel has been minimal.

Here is where the Labour party must now be radical. It must recognise that the old model of taxation has been limited in improving our transport infrastructure and environment. (more…)