Minister for Roads insists on perpetuating 'road tax' myth

Mike Penning repeats claim that motorists pay for roads, despite Road Fund being abolished 75 years ago

by Simon_MacMichael   January 25, 2012  

Taxi and Cyclist copyright Simon MacMichael.jpg

Junior Transport Minister Mike Penning, whose remit at the Department for Transport (DfT) includes responsibility for roads as well as road safety, insists that motorists pay for roads – a mistaken belief not supported by his own department, but one that is widely held by many drivers.

Penning, Conservative MP for Hemel Hempstead, refused to acknowledge his mistaken view at a meeting of the All Parliamentary Cycling Group yesterday when he was quizzed by Carlton Reid, executive editor of BikeBiz and founder of the website iPayRoadTax, on comments he made last year when he said “the motorist… predominantly pays for our roads.”

Reid, who attended the meeting, recorded yesterday's exchange with the minister – you can listen to an excerpt from it on the iPayRoadTax website – in which he asked him how roads were paid for.

“Tax,” Penning replied. “Fuel duty and VED… Yes, it’s hypothecation but a percentage of it does come back in. I stand by it then, I stand by it now. The fact that someone pays for something doesn’t give them rights, it just means they contributed to it… I want to protect cyclists as much as possible but at the same time I also passionately believe the motorist in this country does pay for an awful lot of the service on the road.”

That statement is factually incorrect. Money raised at national level from the likes of Vehicle Excise Duty and fuel tax go into a central pot, along with other monies raised through income and corporation taxes and other charges and duties. That central pot then contributes towards road-building projects and maintenance carried out on the national road infrastructure - motorways and major trunk roads. Similarly, works at local level are funded from revenue from council tax and business rates.

There is emphatically no separate, dedicated fund for roads; motorists do 'pay for roads,' but only in the meaning that we all 'pay for roads', and in absolutely no other sense.

The fundamental issue in question is that successive British governments have refused to countenance any form of ring-fencing the revenues (in technical parlance, ‘hypothecation’) raised by specific taxes and duties for the benefit of the sector to which they relate. The chief exception, as Reid points out, is the TV Licence fee, which is ring-fenced with monies going to help fund the BBC.

As Reid points out in an article published on iPayRoadTax today, according to a 2009 report by the Transport Select Committee published under the title Taxes and Charges on Road Users, hypothecation is defined as “the establishment of a direct link between specific taxes or charges and specific expenditure. For example, taxes levied on alcohol might be earmarked for spending on hospitals. In the UK there is no such link for taxes.”

That report went on to say that “the Government opposes the idea of hypothecation of tax revenues. It argues that decisions about revenue raising and spending should be kept separate for two main reasons: if all income were to be hypothecated, it would create severe difficulties for those services that could not readily raise revenues, such as schools, hospitals, police and defence; and inefficiencies would result. For example, if a large sum was raised from road users, hypothecation would dictate that it was all spent on roads (or possibly other transport modes, such as buses), even if the public priority was for more investment in, say, education.”

One of the principal arguments against hypothecation is that by dedicating money raised through motoring-related taxation and duties to road construction and upkeep, the floodgates would be open to myriad other groups demanding similar treatment; childless couples, for example, might claim it unfair that their taxes paid for schools.

As Reid recounts in detail, Winston Churchill was an early opponent of the Road Fund instituted in the 1920s because he believed it would lead to motorists claiming ownership of the road.

That’s a view that is still common nowadays, with comments to newspaper articles about cyclists regularly calling upon them to be required to pay ‘road tax.’

The fact that there has been no such tax, or anything akin to it, since 1937, appears lost on many, as well as on the Minister for Roads himself, apparently.

Leaving aside the issue that most adult cyclists also own cars, the Vehicle Excise Duty that most motorists are now required to pay is based on CO2 emissions, so even if cyclists were subject to that, they would presumably be assessed to pay the same as owners of the lowest-emission vehicles; which is, nothing.

Reid highlights that Penning’s opinions expressed at yesterday’s meeting should be taken as his personal views, and they are certainly not backed up by the official stance of the DfT.

Indeed, one of the Department’s executive agencies, the Policy and External Communications Directorate of the Driver and Vehicle Licensing Agency (DVLA) says: “There has been no direct relationship between vehicle tax and road expenditure since 1937” – the year the Road Fund was abolished.

It should be reinforced that this is far from a pedantic discussion about using the correct terminology.

It’s an issue of changing a widespread but mistaken belief that does result in cyclists being put in danger by some motorists who claim that because they ‘pay road tax’ and cyclists don’t, that gives them a greater entitlement to use the road, and that bike riders should not be there in the first place.

The website iPayRoadTax was founded precisely to counter that misconception, and has resulted in a number of organisations such as the AA and the Post Office dropping references to ‘road tax’ in favour of ‘Vehicle Excise Duty’ or ‘car tax.’

Reid describes it as “worrying” that Penning, whom he underlines is “Minister for Roads (and road safety) not Minister for Cars” is seeking to perpetuate what is not only a factually incorrect view, but one that is clearly at odds with the official line put forward by his own Department.

Nor is it the first time this year that Penning has appeared unclear about issues with which he should be thoroughly familiar by virtue of his position; earlier this month, he seemed confused about which roads cyclists were entitled to ride on.

Ending the myth of ‘road tax’ won’t be a process that will be concluded overnight; but if the Minister for Roads himself insists on perpetuating it, that does not bode well for the message filtering down any time soon to those motorists who share his erroneous opinion.

23 user comments

Oldest firstNewest firstBest rated

To be fair to Penning, he didn't use the words 'road tax'. He halted before the said VED.

He seemed to know there was a cyclist-centric trap being laid and he mustn't use the offending phrase, but he then went and spoilt it by spouting personal views when he should have cited official DfT views.

He likes being Minister for Cars and tries to get cyclists to talk, instead, to Norman Baker.

When he came into the meeting, early, and when there were only a couple of us present, he joked that he was going to "get crucified" by cyclists but that he wasn't afraid of that because "once you've been crucified once, you don't mind it so much."

Carlton Reid's picture

posted by Carlton Reid [130 posts]
25th January 2012 - 16:33


against... gay rights
against... a proportional way of electing MPs

I don't think this is the sort of open minded, rational person whose views are going to be changed. he almost seems to accept it doesn't make any sense whilst maintaining his position, with his sole defence being "its been taken out of context".

posted by ribena [169 posts]
25th January 2012 - 16:44


As someone who has paid plenty of higher rate income tax over the years, I feel I have made a sufficient contribution to the maintenance of a civilised society and its infrastructure that I should be permitted to ride my bicycle on the road.

I'd be interested to know though whether:

VED + fuel duty > cost of roads

Anyone have a vaguely credible link?

posted by BigDummy [315 posts]
25th January 2012 - 17:10


Have a read of today's Times as well - front page column continued on p11 about charging lorries to use the roads and both Penning and Edmund King are quoted in the article going on about "road tax" and how much lorries already pay blah blah.

posted by crazy-legs [658 posts]
25th January 2012 - 17:20


@BigDummy - ok, it's an old link, but I suspect the figures indicated are still valid.

"Road users pay £45billion a year in motoring-related taxes. This dwarfs the cost of running the road network, which takes little more than £10billion every year."

In fact, I'd imagine the proportion of money spent on roads is probably even lower now given the current economic climate. But either way, car drivers should accept that their car-related taxes bare no relevance to what is spent on the roads.

posted by gforce [45 posts]
25th January 2012 - 17:38


This is worth a read, though you might quibble re. some of the figures:

Conscientious Objector in the War on Vulnerable Road Users

t1mmyb's picture

posted by t1mmyb [87 posts]
25th January 2012 - 17:40


I think the point is that because you pay x amount of tax, you don't get to decide what it is spent on. Otherwise, you can choose for your taxes to pay for the roads, and lay claim to them. I, on the other hand, will lay claim to the armed forces, and proceed to swiftly bomb the shit out of your roads...!

Just sayin. Big Grin

Reminds me of being a kid, when I told my mum (I was about 5!) that I would eat my veg but only because a carrot was building my biceps in particular!

In theory, there is no difference between theory and practice, but in practice...

posted by notfastenough [3724 posts]
25th January 2012 - 17:51


Good point crazy-legs, I read that article in The Times this morning and the quotes seemed based on ignorance - pandering to the usual incorrect but often used term of "road tax" and not VED. These people should take the lead and refer to VED - hopefully the rest of the population will follow ...

posted by John G [53 posts]
25th January 2012 - 18:01


remember this is the fckwit who thought A roads wern't part of his portfolio so he thought he didn't need care about us.

I wrote to him asking him to appologise to the family of Major Gareth Rhys Evans for his dumb ignorant comments.

posted by georgee [158 posts]
25th January 2012 - 18:43


The more I read of Carlton's comments on Twitter and BikeBiz, the more I wonder how on earth this guy can be in charge of running a bath, never mind a ministerial portfolio?!

Turns up without having read the documentation, refers to "road tax", insists motorists pay for the roads, states that retro-reflective lines make cycling safer ( Thinking ). And all this after putting the meeting off twice and cutting it down to a bare half hour... Shows how valued cyclists are. Yes mate, we'll give you 30 mins, then please go away and stop bothering us while we give the go-ahead for another motorway...

posted by crazy-legs [658 posts]
25th January 2012 - 19:07


He is a fool.

Given that I pay VED for my motorcycle and for my car, should I then get a refund under his system for the distance that I opt to use one of my bicyces instead? The VED is calculated on each vehicle covering an average distance and producing an average amount of emissions, which i don't. And as a lot of my annual distance travelled on the roads is by bicycle, Penning's system should see me being refunded VED for the car and motorcycle for the vehicle exhaust emissions I don't produce.


posted by OldRidgeback [2589 posts]
25th January 2012 - 19:32


I pay VED for my car, and then choose to ride my bike instead. How then, can it be said that as a cyclist I don't contribute to the upkeep of the roads? Surely, I'm paying over the odds vs. someone who uses only their car?

Or is the argument that simply you can only use the roads with a motor vehicle subject to VED (So not one of those electric ones then).

If so, it may create a few problems for pedestrians as the pavements are also part of the road network...


posted by Michael5 [121 posts]
25th January 2012 - 20:01


The only real way to get rid of the stupid myth that VED pays for everything to do with roads is to abolish it. Not only is it not a green tax it gives bigotted people the loose idea that they own the road above others. If the tax was redistributed into fuel duty (a real green tax) or increased VAT on purchase of cars it would neuter the 'I pay for it' crowd. Although what Mike Penning said is technically correct he perpetuates a myth which too many people like to believe. I'm very disappointed with his attitude to this.

posted by russcutts [17 posts]
25th January 2012 - 21:41

Send him your thoughts.

onward ever onward

bikecellar's picture

posted by bikecellar [264 posts]
25th January 2012 - 21:47


Michael5 wrote:
I pay VED for my car, and then choose to ride my bike instead. How then, can it be said that as a cyclist I don't contribute to the upkeep of the roads? Surely, I'm paying over the odds vs. someone who uses only their car?

Or is the argument that simply you can only use the roads with a motor vehicle subject to VED (So not one of those electric ones then).

There are quite a few that are zero-rated.

As a cyclist you are in fact causing less damage to the road network by riding on it instead of a ~2 tonne vehicle wearing and breaking up the surface, chewing the verge, making the occasional hole in the hedge or wall, possibly killing someone (a costly business!).

If everyone did what you do then the government could scrap all new motorway and bypass construction, saving billions of pounds. With a big drop in the annual toll of 24,510 killed/seriously injured and a total of 208,00 casualties (yes, that's nearly 1/4 million human beings), we'd spend loads less NHS money - less pressure on emergency services and A&E, fewer people in ITU or requiring surgery and physio.... Meanwhile we'd all be fitter, so possibly spend less time in GP waiting rooms, and quite possibly happier.

bikecellar wrote:
Send him your thoughts.

Don't bother. Consider the old phrase:

"Never argue with an idiot. They'll drag you down to their level, then beat you with experience!"

That clown didn't get where is today by being intelligent, thoughtful and open to new ideas.

Simon E's picture

posted by Simon E [2422 posts]
25th January 2012 - 22:17


Simon E- exactly, that's my point. If you pay VED for a vehicle or vehciles you own and choose to ride a bicycle instead, reducing the distance travelled in a motorised vehicles then you should be entitled to a discount for the wear and tear, congestion and emissions you are not producing.

Clearly cyclists who own cars are penalised worst of all. This system has to change and Mr Penning is just the man to do it.


There as an element of sarcasm in that last sentence, just in case anyone missed it.


posted by OldRidgeback [2589 posts]
25th January 2012 - 22:37


What he said is correct as he stated that both "road tax" and fuel tax go into a central pot which is allocated to different budgets so vehicle users "could" potentially pay for some of the costs of running the roads... Maybe.

Nice one Mike it's all super clear now.

Oh and if vehicle users did pay for the roads thats just grand I really enjoy using them. Perhaps we should up the taxes to sort out some of these pot holes!

posted by SammyG [295 posts]
25th January 2012 - 23:05


Funding for roads comes predominately from Council Tax. Funding for Motorways may well come from a " Central Pot " Cyclists are not allowed on Motorways.
Winston Churchill started the debate on " road ownership " in 1934.
Road Fund Duty was abolished to prevent any one group claiming they owned or had more rights to use the Highways. I've never seen a bicycle wear a road out.
Throughout the UK most cyclists are also motorcycle or car owners or indeed pedestrians. Are we going to stop any of these groups using the road because there is a perception one group pays less than another ?
Like many of his Tory friends, Mike Penning is ill-informed.

posted by julian1960 [14 posts]
26th January 2012 - 0:29


My parents have always referred to VED as "car tax" and never "road tax". If the politicians and the DfT feel the need to dumb down their language for the great unwashed they should refer to VED as "car tax" as you are being taxed for owning a working motor vehicle. Nerd

Mike Penning is yet another minister who has no interest or knowledge of the department he is in and the sooner he disgraces himself and is kicked out, the better it will be for the rest of us. Sad

posted by sam_smith [57 posts]
26th January 2012 - 1:56


SammyG wrote:
if vehicle users did pay for the roads thats just grand I really enjoy using them. Perhaps we should up the taxes to sort out some of these pot holes!

Spot on!

What we need is a Pothole Tax. I propose we base it on a combination of kerb weight and tyre width.

Simon E's picture

posted by Simon E [2422 posts]
26th January 2012 - 11:44


One comment above suggests writing to Penning, another says don't bother.

I couldn't agree less withthe secind comment - Penning should have a Harry Potter moment - tons of 'owls' pouring through every orifice - tellng him - politley- that he is wrong.

I wrote to him at to tell him that he is wrong about road tax, to inform him of how much tax I have paid lately (very considerably more than many drivers, though no doubt considerably less than some) and to point out that this is not pedantry - this attitude fosters aggression, bullying and hostility by some motorists towards cyclists which is dangerous.

As to whether VED and fuel duties more than cover the costs of the roads, it is more complex than that - maintenance and repairs cost less than motor taxes raise, but that ignores construction costs, policing, fire and ambulance services needed for road accidents, adverse health impacts for residents close to polluted roads, etc.

And of course governments have always hated "hypothecation", certainly since Winston Churchill's time.

And of course taxes have always had parallel functions of raising money and influencing behaviour.

posted by Paul M [345 posts]
26th January 2012 - 12:38


Message sent to said doofus minister


posted by OldRidgeback [2589 posts]
26th January 2012 - 16:00


If only this was published on the guardian or telegraph where somebody might have their opinion changed instead of on here, where we all just get angrier.

posted by italiafirenze [68 posts]
26th January 2012 - 17:00