Sunday, October 29, 2006

Brown and Miliband's plan to punish the poor

Gordon Brown and David Miliband are preparing to tax the poor off the road with plans for "a substantial increase in vehicle excise duty for higher-emissions vehicles" according to a leaked document in this morning's Mail on Sunday. The document, from Miliband to Brown, outlines a number of areas where the intention is to heavily tax everyone in an attempt to make them more environmentally friendly. It's not so much a stick as a baseball bat, and there is no carrot. Key proposals are:
  • Substantial increase in road tax - bizarrely arguing that this will be an incentive to buy low emission cars. Which may be true for someone able to afford a new car, but won't be for low-income family of four driving a 10 year old Mondeo. I guess they're expected to catch a bus in our "integrated transport system".
  • Remove the freeze on the fuel escalator by arguing it will create price stability of oil. I'm not quite sure how the tax on fuel in the UK impacts the global oil price, but that is the argument in the document.
  • Total "road-user pricing". Basically a per journey charge to use roads which has massive technological and surveillance implications.
  • Using Council Tax to target owner-occupiers who have have high emission homes. That basically means punishing those who live in period property.
  • Putting VAT on air fares.
  • Introducing an air passenger tax. That on top of the tax already, and presumably VAT.
  • No stamp duty on purchases of "zero carbon" homes. Not quite sure how any home can be "zero carbon". This sounds like a headline grabbing policy that will never actually be applied because of it's virtual impossibility to achieve. A bit like zero road tax on a car that is no longer in production.
Perversely, Miliband's final bullet point says that if the proposals are taken on wholesale they will "provide clear incentives to change behaviour". This sort of argumeent needs to be exposed for the nonsense that it is. There is no incentive present when you use tax to punish people into changing their ways. Genuine incentives do not use negativity (in this case financial pain) as a means to an end. Attempting to draw a distinction between increased tax and incentives is like arguing in favour of torture because it provides an incentive to talk. Incentives are positive benefits that are acheived from a neutral status-quo position. You do not move the goalposts then ask for money as an incentive to move them back, there is only one name for that, and it's blackmail. To argue as Miliband does is at best disingenuous, and at worst intellectually fatuous.

The reality behind this sdocuemnt is that it's a revenue generation scheme worth literally billions. It proposes even greater extension of the state's ability to monitor and track individual private action through the road pricing proposal, but the most pernicious aspect of the proposals is that they will punish the poor most significantly. They'll have the consequence of increasing dependency on the state and crushing any hope of social mobility.

There is a debate to won on this issue and it the one that argues that incentives to encourage environmentally friendly behaviour must be based on revenue neutrality. We should not be increasing tax and then saying if people act in particularly ways they will get a reduction, because that doesn't represent a reduction at all. We should be introducing policies which offer rebates from the status-quo tax position, not an increased position. We must reject coercion through financial pain as a means to an end.


Croydonian said...

There's a damned good fisking of the Richmond plans from new blogger on the block, 'Stop the Bureacrats', here.

Anonymous said...

Gordano is using climate change as an excuse to increase taxes to make up for the short fall his mistakes in the past, which will be visited upon him if he succeeds to the top slot.

Benedict White said...

I totaly agree. That said what do you expect from chianti swilling champaigne socialists?

The other thing is that there need not be a great package. Making bio fules cheaper, in fact a lot chaper would help in CO2 emmisions. We do not actualy need to grow food here either as we can import it from places like the Ukrain where it is very cheap, so the argument about how much land would have to be ploughed up for bio fuels is nonsense.

Unknown said...

Lets face it, if this group of rats on their rapidly sinking ship gave a flying fart about "green issues" as they are fond of claiming. There are a multitude of ways to ensure that the public have a more sustainable attitude towards life.

For example making home power generation affordable for all. the idea of Zero-Carbon homes is an amusing one, but there is no danger of it ever happening since our dear leaders have squandered every chance to change building regs that would oblige contractors to fit the likes of wind generation and solar panels as standard to all new properties, despite the fact that simple enconomy's of scale would soon render the improvements both cost negligable and as a pleasant aside make them affordable to pretty much everybody.

As B.White points out making biofuel a far cheaper alternative to regular/diesel fuel.

Giving householders council tax reductions for re-cycling instead of forcing it upon people and then charging them more for the pleasure.

I'll probably get howled at for this one, but I agree with a charge on flights, although only for pleasure not for business needs which cannot and should not be stifled.

As far as Millibland is concerned this is just another not so sneaking way of removing more of our hard earned from us, but this time using the pretence of green issues. Instead of having the cahones to increase income tax.

youdontknowme said...

Why do labour think they can solve everything through taxation?

taxation is not always the answer. Why can't they be creative and think up other ways?

I have talked about this on my blog too and I have go other ways. The answer is auctioning air journeys to plane companies. lol.

Anonymous said...

ahh milliband there just isnt a word to quite describe his level of stupidity yet without pond scum being offended,shoot him now and put him out of our misery.

Tim Worstall said...

'Remove the freeze on the fuel escalator by arguing it will create price stability of oil. I'm not quite sure how the tax on fuel in the UK impacts the global oil price, but that is the argument in the document.'

This is actually true for reasons to complicated to go into after a Sunday lunch. High pertol taxes do transfer money from the Saudi govt to our ouwn.

CityUnslicker said...

The original point should not be missed either Dizzy.

Not only, as you rightly point out, are all these ideas ineffective; the UK's entire effort is pointless with China, USA and India agreeing.

If they (NuLab) really cared about the environment and global warming they would be leaidng the charge at the UN conference this week on a new climate change treaty; but as that will fail they will just send Margaret Beckett instead and engage in some full-on hand-wringing by Thursday.

Some green taxes and initaives do still merit attention in the UK context. Reducing landfill and polluting power stations would be good for all of us; Destroying private transport for the poor is pure insanity.

What scares me even more though is that DC says Labour are stealing his ideas and Ming thinks they don't go far enough.

Time for a carborn splurge before they take/tax our rights away/ 4x4's as a signal of rebellion perhaps??

dizzy said...

I agree that without other global buyin the impact will be minimal to none anyway. That's precisely why we should be using revenue neutral policies if we're going to have any policy at all.

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