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Where Does Your Road Tax Actually Go?

VED. It sounds like something nasty a young chap might catch on a lads’ holiday in Phuket. But it’s not. It’s the Vehicle Excise Duty. Known to you and me as road tax.

Now, when we buy a bunch of bananas in Tesco, we get a receipt and we know what we’ve bought. We know this because we can see the yellow fruit in our blue-and-white-striped bag, complete with free Brazilian Wandering Spider.

When we pay our taxes, there are no such visual cues. The government could be spending our money training chimps to trade oil derivatives for all we know.

But road tax and fuel duty raise over £30bn every year. And in 2010, the Highways Agency set out its ‘strategic plan for the next five years’, a stretching vision to be ‘the world's leading road operator’. 

Clearly this is a load of shonky schmuff. Because 2015 has been and gone. And, while the French hear a choir of heraldic angels every time they cross the Millau Bridge in a swirl of ethereal mist, we get clinical spondylosis from driving over potholes.

So how much of that £30bn is actually spent on our roads?

A quarter. Yes, £7.5bn, according to the RAC. The truth is that all taxes go into a central fund. That means that motoring cash could be spent on anything from education to basket-weaving classes for marsupials.

A spokesperson for the Treasury said: “At Budget 2014, we announced the £200million Pothole Fund for local authorities, to fix a potential 3.2 million potholes across England. This is the latest in a series of announcements which will see more than £24billion spent on England’s strategic road network between 2010 and 2021 – the biggest upgrade to our roads in over 30 years.”

But don’t you think that money extracted from motorists should actually be spent making life better for them? We love our cars, but wasting time in them is as much fun as a slinky in a bungalow. Delays cost us time, stress and money.

UK drivers spend an average of 32 hours a year stuck in traffic. Britain is the world’s fourth-worst developed nation for congestion. And London is the world’s seventh-most-gridlocked city. Congestion costs our economy £31bn a year in fuel costs and lost productivity.

We didn’t just make those figures up, amusing though they are. They come from a study by Inrix, which provides traffic data. By the way, you think London’s bad? Don’t ever make an urgent appointment that involves your appendix in Exeter. Average speeds there are 4.6mph.

Graham Cookson, Chief Economist at Inrix, said, “Despite Brexit, 2016 saw the UK economy remaining stable, fuel prices staying low and employment growing to an 11-year high, all of which incentivises road travel and helped increase congestion.

“The cost of this congestion is staggering, stripping the economy of billions, impacting businesses and costing consumers dearly. To tackle this problem, we must consider bold options such as remote working, wider use of road user charging and investment in big data to create more effective and intelligent transportation systems.”

Or perhaps we could introduce a two-tier system? Bear with us. When we have delays with the NHS, we go private. Job done. When the schools are bad, likewise. But it’s all a bit more tricky with roads. So how about an upper-deck for every road in the country, with an on-the-spot toll?

That’s a self-financing system right there that doesn’t rip up any more green stuff. You know it makes sense.

Not just the cost to the economy in traffic jams, what about the damage to our cars? Where I live, God I don't think any of the roads have ever saw a road roller, so whoever sign these roads off need to go to SpecSavers It's like being on a rollercoaster from the moment you start your journey, I used to enjoy driving, now it's a task

Interesting post, nice to see where some of the UK tax payer money is going Jojo http://www.armytrixuk.com

Adding preferential pricing is just wrong when motoring is so heavily taxed in the first place. Perhaps cancel the pointless HS2 project and put money into the road network - real help to real people. Can't help but feel a lot of the (meagre amount) money given to roads is not spent on making roads less congested but in making them more congested. Like narrowing roads to make cycle lanes that aren't used (wouldn't mind if used!) or adding silly new ideas from the road laboratories like obstacles placed in the road to force cars to slow down that makes life for motorists uncomfortable (or unusable if you have a painful disability) and just plain lethal for cyclists!

I think as soon as a car becomes 25 years old it should be exempt from Road tax, we see just how clued up the Treasury is when it came to banning fuel being imported from main land Europe over two decades. The legislation was rushed through parliament in hours. They did the same when they promised amoungst the fuel protesters blocking the refineries and mad it illegal in a matter of hours. However the one punch killing rule, dying from a act of violence after a year and a day means that the perpetrator of the act of violence could not be held for murder, manslaughter because modern technology can keep a person alive a lot younger. This law still hasn't changed from the 1600's. If the Govt or an MP was assaulted and they were loosing money it would change within hours! Note that after the killing of Jo Cox, MPs within hours got money to secure their premises and surgeries. The govt still instead of a rolling period of over 25 years changed the goal posts to say only cars prior to 1972 would be exempt! Crafty B*stards. I think personally road tax should be placed on fuel. There by no one can avoid it, not even visitors and tourists. They use the roads so they should have to pay to use the roads. So many E.U plates are seen and non pay Road Tax, it would also mean that the people who use the roads are charged more! Why is a person pottering around 1000 miles pay the same as some person doing 50,000 miles.

It's all very frustrating. Interesting information you supplied. I think this country should cease trying to "drive" motorists off the roads and accept the reality. It's not possible to travel everywhere you want by public transport and we need/love/enjoy our cars. There is plenty of free land to build motorways-we need a parallel M6 between Manchester and Birmingham not just smart motorways which are a cheap option and make minimal impact on journeys at peak periods. More express lanes to stop lane weaving and keep traffic flowing for those who don't wish to exit. There should be another transpennine route between Manchester and Sheffield to reduce the M62 stress! It's a nightmare. It would assist traffic heading south from the northwest by giving another option than the M6. Widen all the main national motorways to at least 4 proper lanes in each direction. Stop charging for the M6 toll, to even out the traffic-let the Highways Agency buy it back. Accept the reality-we need more roads not reducing them. And also introduce stricter driving guidelines to improve motorway behaviour....fine middle lane hoggers! They drive me mad! Stop people weaving-it slows traffic down. Allow undertaking as in the USA! Encourage drivers to use the inside lane and use the other lanes for overtaking rather than bunching in the outside lane. Why not have lorries hours between 9pm and 6am to keep them off the roads during daytime hours. This would free up masses of road space - they would benefit and the car drivers would benefit in terms of congestion, and in terms of accidents between cars and lorry drivers who constantly tailgate cars! I could go on but maybe that's enough for now

dam right l was on my to london last night and middle lane drivers lorries especilly are the cause of it mostly in 50 mph on the moror ways 2 bob bullies in the tonker toys l endid turning off by birmingham dunn in wow to much

I think there has been some good idea raised in the comments, there are a few I would also like to raise: Why not put bike lanes on the pavements, reducing their width rather than the road width, especially in rural area where you hardly see anyone walking on them, if a motorists hits a cyclist is could be bye bye, if a cyclist hits a walker its maximum a broken bones. Why not go up as in america and have one motorway above the other, six lanes above and six lanes below, one level for each direction? ring fence the tax (VED) for road use only the same a National insurance should be for NHS! Were taxed enough on eveything else for the government to still have enough funds to wast like they do now!

A cyclist hammering into a pedestrian on a pavement at full speed can kill the pedestrian. No problems with cyclists using pavements but at no more than 10mph. I live in a city with widespread 20mph limits and am overtaken routinely by cyclists – both on the inside and the outside. However, this is not a clever post. Hardly any tax is hypothecated, nor should it be. And can you really say that railways enjoy the same level of subsidy as roads? Remind me what "Railway Excise Duty" looks like?

What school did you go to?