The following is extracted from a paper I wrote last year.
I reproduce it today in light of further alarming reports on the quality of London’s air. I should say that I have three children who attend a state primary school in Central London.
The Environment, Food and Rural Affairs Select Committee has called air quality in the UK a “public health emergency” and has linked two air pollutants alone – particulates and nitrogen dioxide (NO2) – to the early deaths of 40-50,000 people a year. The UK is in breach of NO2 limits in 38 of 43 areas.
Compared to petrol vehicles, diesel have higher emissions of NO2 and much higher emissions of particulates. However, because diesel engines are cheaper to run, diesel use has been increasing. In 1990/91 the ratio of diesel consumption to petrol was 0.395 to 1. In 2015/16 the ratio has reversed and is now 1.653 to 1. Over that same period diesel consumption has increased from 12,912 to 28,688 million litres. This increase may, in part, be attributable to the decision to align, with effect from 1 April 2008, fuel duty rates at the lower unleaded petrol rate (in effect reversing the higher rates of duty charged throughout the ‘noughties’ on diesel).
A projected 28,588 million litres of ‘normal’ (i.e. ‘petrodiesel’ or non-biological) diesel was released for sale in 2015/16. A 3p litre increase in present duty rates would raise a projected £858m before behavioural effects.
That sum could be hypothecated to a Clean Air Trust and invested in improving air quality and alleviating the effects of poor air quality. It might be used, for example, by including by taking traffic off our streets by developing better quality cycling infrastructure.
Hypothecation of the duty receipts (into a Clean Air Fund together with the compelling need to reduce diesel consumption) is likely to lead to greater public acceptance of the rate rise. This is a point made, amongst others, by the Environmental Audit Committee.
Strict hypothecation of tax receipts has been little used by UK Governments (although there are many examples of a rhetorical “earmarking” (see, for example, Gordon Brown’s “ring-fenced fund for the modernisation of roads and public transport” in his 1999 Pre Budget Statement). However, something of a precedent for the hypothecation of environmental taxes to deliver specified outcomes can be seen in the Landfill Communities Fund.
Taking this policy suggestion forward would be for a coalition of stakeholders. I would, of course, work with any such coalition.Follow @jolyonmaugham