The Social Cost of Motoring

In round terms, ...the Government raises close to £50 billion from road users.

The Campaign for Better Transport extrapolates from the Government research on marginal external costs (above) to reach a total cost of externalities of £70 billion–£95 billion per annum at [2009] prices.

House of Commons Transport Committee - Taxes and charges on road users 2009

A great deal of those costs fall on individuals rather than the government, bereavement, noise, congestion, air quality, essentially standard of living costs borne by the wider society. So it might appear that the government raises £50bn but only spends some £9bn on maintaining roads, but the other £41bn goes towards offsetting the costs to society. A non motorist cannot claim back the cost of their reduced standard of living directly from anyone, but by raising taxes from motorists, the government can reduce other taxes paid by everyone. Even so there is still a £20-45bn shortfall between what motoring costs society and what motorists pay. Put another way, £45bn is half of the total raised by National Insurance, an even more direct tax on jobs than fuel duty. In fact, if you raised that extra £20bn in taxes from motorists (increase fuel duty by 40p, probably more like 50-60p to account for reduced sales due to changing behaviour) the income tax personal allowance could be raised to about £12,000, just about the right amount for those who insist on a living wage. OK, some inflation will follow offsetting things a bit, but we're in the ballpark.

Low taxes on motoring is not essentially right wing idealism, indeed, undertaxing it as we are is effectively socialising the cost of motoring.

Thoughtfully a list was drawn up of the cheapest and most expensive fuel around the world, the list of the cheapest countries could almost be a list of the world's greatest tinpot dictatorships. Meanwhile, Norway, the highest priced place in the world for fuel has been found to have the highest standard of living in 10 out of the last 11 years. Not a causal link of course, but I think it's safe to say that low taxes on fuel is not a necessity for making life better. I've been to Norway, I don't need to go to Turkmenistan to know which country I would rather live in.

Tax Incentives for Cyclists

The UK has the Cycle to Work Scheme which I have used twice now to purchase bikes, keeping about £900 out of the grasping hands of the tax man and in my pocket. However as with so many things velo related our near neighbours have taken it a step further, the Netherlands and Belgium in particular give tax relief on cycling to work

Netherlands

Bicycles - The employer is allowed to provide a tax free payment for commuting by bike of again €0.18/km (23 US cents). Employers are also allowed to provide employees with a new bike, but only once every three years. The value of this bicycle is treated as income, but if ite is used for commuting, the value of the bike is fixed at €68 ($US89) for tax purposes. This applies to bikes up to a maximum value of €749 ($US976). Employers may also providebike accessories (e.g. maintenance, clothing locks etc.), this is tax free up to a value of €250 ($US326).

 Tax treatment of employer commuting support: an international review

Belgium 

In Belgium, companies and public organisations are likewise allowed to pay their employees when cycling to work with an amount of 0.20 € per kilometre per day (no more than 15 kilometres a day). The supplement is tax free for the employees and the employers get tax credit for the expense.

Tax incentives for bike commuting

Commuting distances
We can see on table 7 that 20% of commutes are under 2 miles and 46% are under 5 miles. Of those 12% of car commutes are under 2 miles and 40% of car commutes are under 5 miles.
Commuting and business travel factsheet tables – April 2011 (XLS – 211 KB)

Table 11 says average occupancy is 1.2, so many people could change modes without affecting travel partners.

We'll go for a middle ground of 3 miles because it is roughly the length of my commute. Cycling 3 miles is achievable for most people I reckon. 5 miles is perfectly doable by many. At these sort of distances people are probably travelling on 20/30/40mph roads, a fair bit of stopping and starting, a three mile commute might take 7 minutes by car or up to 14 minutes by bike. It might be 100% longer, but the nominal difference is only 7 minutes.

The marginal cost of the commute by car is petrol + depreciation due to increased mileage + some wear and tear, nicely estimated here. I think due to higher costs of motoring in the UK than US we will convert he numbers to pence without adjusting for exchange rate. So marginal cost per mile is £0.23. 3 miles, twice a day for 222 days a year = £306

Belgium's tax incentive of  0.20 € per kilometre equals £0.27 per mile = £360

So the toal incentive is equal to £666 per year, less £100 for a pair of tyres and a service.

I wonder how many would change mode for £566 per year?

Politics of Cycling

It seems of late that you can’t pick up a newspaper or turn on an interweb without a politician giving you their opinion of cycling.

Whether it’s Ken Livingstone saying cyclists should get priority at traffic lights; David Cameron offering support to the Times’ Cities fit for Cyclists campaign; or Nigel Farage saying we’re a bit of a nuisance in town and country.

It’s Mr Farage who has inspired me to write today, I confess I don't know an awful lot about him, certainly not enough to know his views on cycling before he mentioned them on Wednesday. One thing I did know though was that UKIP claim to be on the libertarian side of the spectrum, indeed they went so far as courting former  Libertarian Party members when that party closed its doors. Libertarianism is of course a rather broad church and will encompass views from "I will drive a car whenever and however I want" right across to "I will ride a bike and avoid paying tax".

Even so, I am still a little surprised that someone on the libertarian side would be hostile to cyclists riding two abreast or whatever they do to annoy him, because for all their faults cyclists are not much of an inconvenience to anyone. For some reason whatever negative effect a cyclist does have will be amplified in the mind of the person inconvenienced. 

Consider a pair of cyclists riding two abreast, you're driving along, they are ahead, you slow down, maybe ten seconds passes, a minute even, let's be outrageous and say two whole minutes pass while you are behind them waiting for an opportunity to overtake. If it is so difficult to overtake that you must wait two minutes before you can do so chances are it's a windy little lane and you probably shouldn't be doing more than 40mphish anyway, Sunday cyclists probably average 15mph so you are only delayed something like 1m20s. Clearly an eternity. Yet the amplification of negativity seems largely confined to cyclists, I don't really hear the same expressions of anger directed at horse riders or walkers.

Anyway, the point I want to get around to is that cycling is pretty much the most libertarian form of transport. Cyclists are, depending on who you speak to, the direction the conversation moves in and what side they got out of bed, hippy environmentalists, flashy mamils, aggressive pricks etc. But complaints about cyclists generally fall under the banner of it being unregulated, low cost, anti-authority, hence why it is libertarian. Look at all the libertarian benefits

1. No licence

2. No registration

3. No emissions tax

4. No VAT on bike (if C2W) or fuel

5. No fuel duty

6. No insurance (unless you so choose)

7. Every mile ridden is money kept out of the government pocket and in yours

8. Very limited possibility of committing a criminal or traffic offence so reducing potential interaction with police or courts.

9. You're unlikely to ever be liable for significant injury or financial claims

10. You can largely get away with breaking traffic laws, although getting caught goes against 8.

Why would a libertarian of any colour be against such an anti-authoritarian pursuit? It is truly wrong to consider things on a simple left/right spectrum, the political compass is two dimensional, with regulation of economics on one axis and regulation of society on the other. In cycling the anti-establishment left and the libertarian right meet together on the social axis.