M6 Toll - Business Logic

[Kevin Jones]

The data above looks bogus, fuel tax revenue for 07-08 was £24.9Bn (see here), that would make 'sales' in 2011 of £23.2Bn rather odd to say the least. I suspect the hint to foul play is the use of 'unleaded', you would expect sales of unleaded to have fallen since 1997 as the data shows with diesel taking over. If 'sales' really is just unleaded then it makes no sense to divide total fuel duty by it.

ONS data shows fuel duty as a % of each £ spent has fallen since 2001, which IMO is also missing the point.

[XTR2Turbo]

XTR Turbo

Your analysis is flawed, the NET tax take from road users has increased almost four times in 14 years while the cost of a refined litre of fuel has increased only twice!, while our government has spent less on the road system. It's not just petrol, but diesel (Britain has the highest fuel duty in Europe), VED which has been punitively raised using the risible excuse of CO2 warming, MOT charges, Congestion charges, VAT on the whole lot plus VAT on new vehicles which, of course, have much higher MPG and therefore reduce fuel usage.

Smokers have an option, they can choose not to smoke and as a result inconvenience themselves, most car use is work or social related, reducing usage affects others such as family. There are alternatives to increased taxation, our leaders willfully refuse to consider them because this way they get an ever increasing slice of our income which they choose how to spend.

I haven't presented any analysis but commented on your data and made a few assertions based on widely understood trends. Also you are making statements based on data missing from your post.

Your data was suggesting a near 400% increase in tax revenue. But it is meaningless if the value of the item being taxed increased. Most taxes are based on value - income tax, stamp duty, VAT...

Also I question your price data.

There is quite a lot of volatility but taking mid year figures ..

Price of Crude oil June 1997 was $17.20

Price of Crude oil June 2011 was $87.92

You also need to consider exchange rate fluctuations but it has certainly more than doubled.

I am not disagreeing that the motorist and indeed the tax payer generally is being raped left right and centre but the data analysis you presented was very very misleading - both the comparison with tobacco and the figures standalone.

You will need to do more digging to get the data you need to make a meaningful argument. You need to normalise the tax take for each away from commidity price changes to make a meaningful comparison. If you do this and look at the %tax take, my expectation is that you will find that it is the tax on tobacco that has increased and fuel has decreased even though the absolute value taken has of course increased.

You might argue that the tax should be capped or a fixed value rather than % but that is not what your dataset was trying to show.

What is most worrying is that even after massive tax take in almost all aspects of life - the government budget is so massively in deficit. There was a sensible commentator on the Robert Preston 1 hour last night that suggested that coalition government 'austerity' measures are looking to save about 2 - 3 % in real terms and that the figure needs to be closer to 25% to got back to where we need to be. For god sake if we are lucky the government will be getting tax take equal to it revenues by 2017. They then have the minor problem of the 1.5tn of accumulated debt excluding the public section pensions that are unfunded. I don't have the numbers to hand but from memory this is about £25,000 for every man woman or child in th country and almost double that per taxpayer.

How worried would you be if you owed £50k (and not a mortgage against an asset) and were spending 25% more each year than you earned? !!!

[windy]

The M6 toll isn't getting used because the old M6 now has fewer holdups and less traffic in general is on the roads. I have a sat nav that gives you traffic delays through birmingham so when I approach the toll a quick glance ususlly tells me what route is going to be quicker. There is also the option of taking the A50 if the M1 is looking better than the M6 through birmingham.

[Ian Podmore]

Yep, the only time the usage of the toll goes up is when they are upgrading the M6..... but when the upgrade is done the M6 flows faster and the toll road becomes even emptier.

The toll road is saddled with £60M of so of debt repayment each year, and their depreciation was rising in previous years (which seemed odd to me so early in the lift of something so new) at £18M or so a year.

End result is a loss.

The company is ultimately owned by an Aussie outfit, but with other toll roads in Europe. Didn't realise that.

Price is way to high, I use it very rarely, only usually for late runs to the airport, otherwise the time saved for me is tiny.

We now face the misery of the threat of the HS2 fiasco now as well, another white elephant if ever there was one, but on a much larger scale with more Whitehall bods with blinkers on not listening to anyone in consultations!!!! No one wants it, no one needs it, no one will use it in volume as the price will be too high to use that if it goes ahead. I can already be from home to centre of London in 1 1/2 hours including walking to the station. It's so fast already that a neighbour works there 4 days of the week commuting each day!