Vehicle Excise Duty: How a Temporary War Tax Became a Permanent Con by Denis Podany

Let’s start by dropping the nursery language.

It isn’t “road tax.” It never really was.

For over a century it has been Vehicle Excise Duty – a tax on owning a vehicle, not a charge for maintaining roads. The confusion wasn’t accidental. It was useful.

And for a while, the story almost held together.

The Original Deal (and Why It Broke)

In 1909, motoring taxes were tied to a Road Fund. The logic was simple, fair, and very British: You use the roads. You help pay for the roads.

For a time, that broadly happened. Then came 1937.

FACT: In 1937, the Road Fund was abolished and motoring taxes were diverted into the general Treasury fund.

FACT: The reason was not malice, ideology, or climate policy – it was war preparation.

Britain was rearming. Money was needed quickly. The ring-fencing of road taxes for roads was dropped. As an emergency measure, it made sense.

What matters is what happened next.

The war ended. The emergency passed. But the diversion stayed.

Some of that money did go on roads – notably the motorways from the late 1950s onward. But the original deal was never restored. And the principle quietly died.

Drivers would pay whatever was required – and receive whatever government felt like giving back.

No vote. No reset. No honest admission.

A temporary measure became a permanent habit.

From Taxation to Extraction

Over the decades, motoring taxes grew – fuel duty, VED bands, surcharges, penalties – all flowing into general taxation.

FACT: Drivers now pay tens of billions annually in motoring-related taxes.

FACT: Road spending is only a fraction of that total.

Government began to find it politically convenient to use drivers as cash cows. Taxes on driving are unavoidable. The income from them is predictable. And driving is easy to moralise against.

Once the link was broken, no Chancellor of any party rebuilt it. Why would they?

The system worked – for the Treasury.

Diesel: a Rational Choice turned into a Scapegoat

Now, let’s be honest about diesel – properly honest.

FACT: In the early 2000s, diesel was actively promoted by Tony Blair, Gordon Brown and their scientific advisor David King, because it emits less CO₂ per mile than petrol.

FACT: This policy was backed by government advisers. It was seen as helping the country to meet environmental targets.

FACT: Ultra-low sulphur diesel was being introduced, significantly reducing sulphur oxide emissions, and greatly reducing dangers to health from air pollution from cars.

This wasn’t stupidity. It wasn’t a conspiracy. It was a trade-off – CO₂ versus local pollutants – made using the science of the time.

Manufacturers followed policy signals. Petrol options disappeared. Consumers adapted.

Then the policy flipped.

Same cars. Same engines. Same drivers – many with no realistic alternative.

Suddenly diesel was recast as a moral failure.

Charges. Zones. Penalties. Collapsing resale values.

The betrayal wasn’t the original advice – it was locking people into a choice and then punishing them for obeying it.

No apology. No compensation.

Just scapegoats.

Electric Cars: History, Repeating on Schedule

Enter the electric vehicle. Subsidised. Mandated. Moralised.

“Do your bit.” “Change now.” “Deadline approaching.” “Code Red for humanity.”

People comply – again. At least, those who can afford to. The rest are just told to pay up, or “walk or cycle.”

Then reality intrudes.

FACT: EV owners don’t pay fuel duty.

FACT: EVs are heavier, increasing road wear.

FACT: Treasury revenue drops while infrastructure costs rise.

The response is predictable.

A “consultation.” A rethink. New charges.

The concern isn’t fairness, roads, or the environment – it’s replacing lost revenue.

Same cycle. New technology. Same outcome.

The British Transport Policy Cycle

• Recommend a behaviour.
• Subsidise it.
• Shame people into it.
• Lock them in.
• Tax it.
• Demonise it.
• Repeat.

And every time, the bloke driving to work at 6am pays – while the architects of the policy fly to conferences to discuss ways to make him pay more.

This Isn’t about the Environment – It’s about Trust

This isn’t an argument against cleaner air. It’s an argument against moving the goalposts and blaming the public for standing where they were told to stand.

FACT: Motoring policy has repeatedly changed after people complied.

For government, revenue security consistently outranks fairness.

Call it Vehicle Excise Duty. Call it a levy. Call it progress. Just don’t call it honest.

The real tragedy isn’t that policy evolves.

It’s that the British government still pretends to be surprised when the crowd stops clapping.

Image on main page taken in Wales in January 2016.