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Tories plan new road tolls to claw back cash
27.07.09
The Tories are considering ending tax credits for high-earning households and introducing tolls on new roads as they tackle the "daunting" public finances.
David Cameron said today that the "wealthy" would have to pay their share under a Conservative government trying to bring down the massive national debt.
"In saying to the country that we need to reduce public spending, we need to get the budget balance under control, we've got to be able to demonstrate to people that this is fair and seen to be fair and that everyone is putting their shoulder to the wheel," the Tory leader told BBC1's Andrew Marr Show.
"And that means the wealthy have to pay their fair share."
Mr Cameron said that, apart from the health and overseas aid budgets, which are to be ringfenced, there would be "very proper savings" in departmental budgets, besides the scrapping of identity cards and regional government bureaucracy.
But he said any more detail about cuts in spending would come later.
Pressed for areas in which the Tories might raise taxes, he reiterated previous remarks that tax credits for households earning more than £50,000 a year were difficult to justify.
He also said the Tories were "happy to look at road tolls", describing the M6 toll road as a Conservative idea and a "great success".
He indicated that a Tory pledge to cut inheritance tax might not be implemented for several years and that scrapping the new 50p top rate of tax on higher-earners, to be introduced by Labour next year would not be a priority.
Mr Cameron said the scale of the challenge on the public finances was "daunting".
"It's incredibly daunting the scale of the challenge, and the mess that's being left in terms of the economy and particularly the budget balance," he said.
"And that's why I've said, and I can't remember and opposition leader who in opposition has looked the British public in the eye and said, we are going to cut public spending.
"We have to do that, we have to be clear about that.
"But I think the British people recognise this and are crying out for someone who's going to lead them and is going to say, 'Right, we are all in this together, we've got to take these steps together'."
Alistair Darling was emphatic that VAT would be returned to 17.5% at the end of this year, despite recent speculation that he might review the proposed rise.
VAT was reduced to 15% last year as a temporary recession-fighting measure.
Business leaders have complained that its planned restoration on January 1 could hamper any economic recovery.
But, asked today whether it would return to 17.5% then, the Chancellor said: "The reason I cut VAT was to bring forward spending this year as part of the process of helping our economy get through it.
"But when you consider it costs almost £1 billion a month, I was quite clear at the Budget and when I announced this last November that the VAT rate would return to the 17.5% at the end of this year. That remains the case."
He promised to begin spelling out the "hard choices" Labour would make on future public spending as early as this autumn.
Mr Darling said all the parties would have to detail their plans for rebalancing the country's books before the next general election.
"You have to set out those priorities," he said.
"Apart from anything else, the next election could see a government elected until 2015 - it will need a mandate for the hard things it's got to do as well as the things it wants to do to improve the country.
"Politics is about choices, and people when they go to the polls - whenever it is - will want to know where all three political parties stand."
Reader views (28)
Why these petty initiatives when, it is reported, over a million illegal immigrants are receiving care from the NHS at what must be an enormous cost to the British tax payer?
- Richard Kennard, Welling
To be quite honest the next election will be fascinating. The Tories are hoping to win an election by promising cuts. Bad move. Tax those bankers that produced the mess. I see the bonuses are already back to the millions before the crisis.
- Michael Riley, London
Could not agree with you more Matt, London. Labour are leading Cameron by the nose and he appears to be too engrossed in trying to outwit Gordon to realise that the real political chess master Mandelson is walking Dave into ever-closing traps. There is a way of checkmating Mandy but I doubt Dave will not listen as he is too engrossed in living in the glory of a recent by-election the Tories did not win but Gordon lost. The question is whether the by-election was lost deliberately by Labour to out play Dave's euphoria which set of a number of "when I win" claims of what he intended if he was PM. Bad move Dave. You have walked into your own trap. Best keep your plans to yourself, but keep asking Gordon how he is going to fix the economy at every PMQ and not get side tracked. As I said above, your pay by miles driving plan is sheer lunacy on your part. Or have you been hoodwinked by your own party?
- Albert Hall, hove england
Cameron makes no mention of the fact that there is to be a graduated road tax, according to the "size" of the vehicle.
In my opinion, toll roads are going to be as big a mistake, in electoral terms, as the poll tax. Better that there be no change, for the moment, in relation to the fuel duty, which raises a huge amount of money. Soaking the motorist further will nearly endorse the policy of Mugabruin and Ken Livingstone. He will get a pat on the back from them.
Huge sums are raised by road tax, which go not to building roads, the original intention, but into the general revenue fund.
Cameron needs to rethink the tax credits system, and I agree that in respect of the higher income families there needs to be a cut-off point. Getting rid of the system altogether and raising the tax-free allowance will be much more efficient and will allow him to get rid of the huge, unnecessary, army of people hired to administer it, which they did inefficiently, losing as much as, perhaps, 60% in the cost of their employment and potential pensions.
He would do, however, better to take a harder look at the benefits paid to illegal immigrants and "asylum" seekers and could achieve a huge saving if the illegal immigrant's were shipped out, to allow them to stay allows them to profit from their criminality.
As for the asylum seekers, as the reason for seeking asylum changed and if so, they need to be returned.
- Hugh, Middx
Cameron said
"And that means the wealthy have to pay their fair share." Does this mean the 2% of population with 90% of the nation’s wealth..? No it means everyone else...!
- Ade, London
So £50K is considered wealthy then?
It might have been 15 years ago. But not now. Wealthy is someone who has wealth, not what their salary is.
They may earn £100k but have debts and expenses of a similar amount leaving nothing for a wealthy lifestyle.
A wealthy person would probably not have a mortgage, or loans or any other debts. A wealthy person doesn't need to work. He/she probably has two or three hols each year and kids are at private school. Health is provided by a private GP and private medical insurance.
So what exactly are the wealthy getting in return for the increase in taxation?
- Adam, Harrow, UK
We've been building more and more roads for 50 years, traffic jams haven't stopped yet. The solution isn't to carry on building roads
When traffic flows more freely, it encourages more drivers = more traffic jams
The only way to prevent jams without covering the country in roads, is to reduce usage. Car must literally be priced off the road, with excess money not going towards new road building, but public transport and cycle facilities instead.
Without this, more roads just result in more traffic. back to square 1 again.
- Driver, london
It always comes back to the family motorist to fork out for all the financial mistakes of the Government and bankers, one moment it's the price of petrol with it's 70%+ tax or the road fund licence, of which less than 20% is actually spent on the road network. Now a new tax in the form of road tolls is to be paid by every motorist, even though they are paying heavily just to own a car. And just who will be affected by this 'new tax?. Well it certainly won't be the rich, or the higher end of the middle classes. It will be the poor old working family and the lower tier of the middle classes. It is precisely this group that have suffered financially the most in the last 14 years, and it will be they who will suffer disproportionately again under these proposals.
- Pat, South London
All unnecessarily complex. Abolish tax credits, and the expense of delivering them (yes, a few less civil ervice salaries, few more JSA payments), set a (say) 10% starting rate for income tax, but only for those earning less than (say) 75% of national average salary. All via PAYE - cheap as chips to do, and the basis for the equation is pay out the same as is paid now under tax credits.
Advantage - it puts more money into the pockets of the less well off, who will probably spend it in the economy, rather than better off who will either pay down debt or save.
And if presented right will win more votes than it loses.
- Hutch, High Wycombe
Easy target, the motorists yet again! May I suggest he stops immigration, doesn't give any of our money overseas until our own house is in order, and prunes back our ginormous social security to the bare knuckles, ie abolish children's allowance and paying social security to folk who haven't done a days work in their lives! If he goes down this road (no pun intended) I will be voting UKIP at the next general election!
- Sue, Orpington, Kent
David Cameron should begin his overdue purge of public spending by abolishing ALL working and family tax credits - and if YOU are in receipt of one of these voter-bribe welfare payments then be very proud to be labelled a fully paid-up member of Gordon Brown's client state.
- Ted, London
I think our politicians are trying to start an uprising and a revolution.Its about time these rich fat cats realise us working/middle class slaves have no more ------- money left as they have already taken it all in taxes.
- Dave, london
Good. The Tories have finally got a policy. Now I can consider voting for them.
- Prototypical Englishman, Wormwood Scrubs
Why not just abolish vehicle duty on cars and raise the duty on auto fuel to bring in the same amount of revenue (or more if needed, which it probably will be)? If the tax raise was in the form of VAT, the extra tax on the haulage industry and other genuine business mileage would be reclaimable, so it wouldn't hurt businesses at a time that they are most vulnerable.
In other words, let us drive what we like as much as we like, but pay tax proportionally to the fuel burned. Much more sensible than driving poorer motorists off new toll motorways and back onto the roads through the towns that were supposed to have been bypassed.
- Nigel, London
Why are we "ringfencing" foreign aid, we should stop all foreign aid as we can't afford it.
India and China can afford to look after their own theses days, to name but 2 scrounging countries.
- P Staker, London
simple way to make us more efficient with public funds:
At a stroke remove: The DFID ( luvvies giving away billions to third world countries - unaudited and unregulated), close down all the 'regional quango's' - John Prestcotts unelected busybodies like SEEDA; stop all overseas aid to countries with Nuclear/Space programmes, or who refuse to take back asylum seekers, or who are war with us - Iran, Agfhanistan, India, Pakistan etc, etc. also - my local council has also just approved a pay rise of £44000 per year to its Chief Exec!!!
- Gary, amersham
More charges for the motorist.
Mr Cameron mustn't want the job of Prime Minister.
- Anil Chatterjee, Manchester
Boris better start by retaining the full congestion charge zone and given the millions he wants to waste on replacing perfectly good buses with from what I saturday on the 507 "Boris Cattle Trucks" well leave the perfectly good Artics in service.
The new buses on the 507 are an accident waiting to happen with no seating in most of the front area and just go to show the contempt Boris has for London bus users.
As for cameron take no notice by next week he will be condeming these ideas if another party suggests them.
Besides why should ordinary people pay more when he still insists his cuts for millionaires in inheritence tax will go ahead.
- Melvyn Windebank, Canvey Island, Essex
this country has become a joke if he want to save a few billion close our boarders to immigrants there no work or houseing for our own,theres beeen people that i know thats been on the dole for years as they have a better life than most of the poorer works, we bailed out the banks with tens of billions of tax payers money as well but the banks are still a law to themselfs, so David Cameron like brown want to get some money back that right from the very ones that are tax to death as it is,
- Mark Williams, london
I don't know who advises David Cameron, but the failure of the M6 toll to attract users or reduce congestion should have made them think twice before opening mouth?
Drivers are a paying five times over for the puny investment in roads. a net £42 billion a year into the Treasury and probably £400 billion since 1997.
Sorry, Dave, unless you want to go the same way as Ken Livingstone, you should regard the backlog of road improvements as having already been paid for. It might also help create a few jobs in Britain.
- Jools, London
Stop giving benefits to freeloaders that arrive just to leach on tax payers and make our live a misery. I live in house that took me 25 years to pay for I'm now surrounded by Eastern Europeans and others living FREE on bnefits and working. I'v reprted many times to council they say they are aware but do nothing. WHY
- Mike,, London
Cameron should close all tax loopholes and make Companies pay Tax on the profits that they make in this country. Many companies report a loss in the UK and Prodits in Tax Havens to avoid paying UK Tax. A ninety percent Tax on all Bonus schemes for those earning abive 100 K would also bring in money from those who can afford it and punish the Bankers who caused the crisis.
- R Race, Ealing England
Thanks David. Glad to hear that you're considering another issue.
Now tell us what you actually feel and more importantly what you're going to do.
It would help us make our decision of who to vote for.
Yours in hope.
By the way, I considered buying a pair of plaid short this Summer. I thought better of it.
- Charles, Kennington
A tax on mileage is about as mad as it gets David. The M6 toll road collectors are bored out of their minds with nothing much to do as it is while the M6 gets worse than ever. If you are really serious about vehicle emissions the only workable solution is a tax on fuel. The more you use, or waste, the more you pay. Easy to collect. Easy to understand. Easy to manage. BUT the extra money collected needs to be ring-fenced towards easing the traffic jams caused by poor and lack of more efficient highways engineering and not ALL go to the Treasury. The reduction of bottlenecks that reduce the easy flow of traffic must be smoothed out. For instance my car will register 48 mpg driven sensibly and at a constant, uninterrupted speed, but 25 mpg in traffic. Surely this must be good for lowering emissions. I have evidence of a road through a village where the tail back can cause a 10 or more minute queue yet the by-pass promised and the land allocated for it has lain dormant for 40 years. Thousands upon thousands of fuel has been unnecessarily pumped into the atmosphere as a result. Remember, more jobs could be funded by the tax. David Cameron should use the brains and talent in his party to come up with blue-skies thinking instead of the old, lost in the past Labour Party inefficient, unworkable schemes it comes up with. Their road pricing scheme and the emissions-based road taxes have been just two of their waste of money stunts. People will never give up their cars.
- Albert Hall, hove england
The Tories should do what canny Harold Wilson did in 1964 and refuse to promise anything specific until they have 'gone through the books'. At the moment they are just giving ammunition to Labour who are going to label them as the party of big and unpopular spending cuts at the next election. The Tories might be being honest, but isn't a clever strategy.
- Matt, London
Looks like the poor driver is going to suffer again.
- C Cusano, Bedford
It shocks nobody that any government that takes over from this crowd of idiots will be left with debt, war, mess and ultimately tough times.
What frustrates me more is that Blair, Brown and Darling will walk away totally free as if nothing happened whilst innocent people are left poor in the UK or dead around the world from the wars they started.
In my opinion, Tony Blair needs to be put in front of a court. I believe there will be riots here and in Iraq if he thinks he can be the EU President.
- Mike Barry, London
Here in Australia all roads are tolled at the beginning,for a stated period, and a stated amount.It is accepted by the majority because it 1. gets roads built 2.comes out of taxation anyway.Good luck England. P.S I am an ex Londoner. Be well...
- Jon Clague, Melbourne Australia
