Analysis: The workplace parking levy is well meaning – but is it well thought through?

Ben Wray

CommonSpace editor Ben Wray takes a look at the Workplace Parking Levy, a rushed policy supposed to be about fairness and sustainability but which could anger low-income earners

THE Scottish right-wing press think they have found an issue which they can really hurt the SNP with. 

The Daily Mail is running daily front pages on the workplace car levy, claiming that “the great car park tax revolt” is underway. 

A bit early perhaps, but while it is usually advisable to dismiss the Daily Mail’s front pages out of hand, this one might reach well beyond that paper’s particular bigoted ghetto, and become a serious problem for the Scottish Government.

One sign of this is the words of Unite the union’s Scottish Secretary Pat Rafferty. Hardly an ally of the Daily Mail, Rafferty was uncompromising when he told CommonSpace today [7 February] that the workplace car levy was “desperate” and if implemented would create “the ludicrous situation where we would have the public sector taxing its own workers for turning up to work, taking the pay increase they have fought for, off them”. 

A storm in a teacup, or something more? 

Finance Secretary Derek Mackay announced that local authorities would have new powers to introduce a workplace parking levy (WPL) if they choose to, as part of a budget deal with the Scottish Greens. Details of the policy are sketchy, but we know that it will be levied on employers, but they will have the power to pass the cost on to employees. Deputy First Minister John Swinney today confirmed that it would not be paid by NHS staff. 

READ MORE: As Holyrood debates parking levy, campaigners press for public owned buses as alternative to driving

How much the levy could cost drivers is not yet clear, but in Nottingham Council – where the WPL has been in place since 2012 – £400 per year is charged per parking space, with employers choosing to pass none, some or all of the cost on to employees. It raises £9 million per year, and the Council is legally required to spend the money on sustainable transport projects. The tax has contributed to a number of public transport projects in the city, including a ‘Robin Hood’ integrated travel smartcard.

The appeal of such a tax is obvious. The biggest contributor to carbon emissions in Scotland is transport, and CO2 from this sector has barely fallen at all since devolution. Traffic congestion causes serious health problems in Scottish cities because of the illegal levels of air pollution it generates. Green MSP John Finnie has said the policy “will save lives”, while Gavin Thomson from Friends of the Earth Scotland has said WPL “will start to address the unfairness of our current transport system”.

But here’s the issues. First, and most obviously, WPL is a flat tax. It charges low income earners as much as high income ones. For someone on the minimum wage, £400 per year is not a small amount of money. Add on top of that the increase low-income earners will be paying towards Council Tax if Councils push rates up by the maximum 4.79 per cent increase, and you have people who can’t afford to pay more ending up paying a lot more in local taxes.

Because the tax will hit low-income earners hardest, it will be much more likely that they will be the ones who decide they can’t afford it, while higher income earners can easily absorb the levy. That means that car parks and roads will be less congested – for the rich. Many better off workers may welcome WPL as a mechanism to clear the roads of the poor. So while Thomson claims WPL increases “fairness”, there is an inherent unfairness in a flat tax of this kind. 

READ MORE: Analysis: Have the Greens got enough bang for their buck with their #ScotBudget deal?

Additionally, is it fair that rural drivers, who have less access to public transport, will be hit harder by this levy? It was Emmanuel Macron scrapping a wealth tax and replacing it with a flat tax on fuel which was the final straw for rural France, who have risen in a 12 week revolt which has rocked the French Government to its core. The Scottish Government shouldn’t under-estimate the extent to which Scotland’s rural population feel ignored and left behind.

In Nottingham, the levy is charged on car parks with more than 10 spaces, but that is many, many more car parks than those in congested urban areas. The idea of a congestion charge is also a flat tax, but at least it is targeted at areas of genuine congestion. The problem with the WPL is, for many, it will feel punitive: they will be paying a tax which is supposed to be about congestion and sustainable transport, where they don’t have congestion and don’t have access to sustainable transport.

And what does funding for sustainable transport look like where the buses are privatised? More subsidies for bus companies to continue to deliver poor services at extortionate prices? It’s unclear that the money from WPL will not be used to plug gaping holes in core budgets.

READ MORE: Analysis: The grim plight of austerity in Moray Council could be just the start unless big change comes to Local Government soon

That brings us back to the politics of this, because it’s clear that this policy was rushed through last minute (given the lack of detail the Scottish Government has published about it) and that it would not have been considered at all if the SNP did what it promised to do many years ago, and scrap the Council Tax. 

It was short-termism which led the SNP to take the decision to ignore its own Commission on Local Tax Reform and stand on a ticket in the 2016 Scottish elections of tweaking the Council Tax, rather than ending it, as the Commission advised. Years of the SNP’s Council Tax freeze had created a situation where local government is increasingly reliant on central government for funding, and enough people had warned the Scottish Government that local government could not go on this way, with demand pressures on social care in particular rising rapidly. 

Now the Scottish Government has been forced to push through a policy it’s not clear the SNP actually believes in. Saying ‘localism’ over and over again won’t really cut it. With Councils starved for cash, most will introduce the WPL even if they don’t believe in it. If the SNP genuinely believed in localism it would not have made Councils so reliant on Holyrood for their funding.

READ MORE: Last minute deal with Greens sees Scottish budget secured

Of course all this is happening against the backdrop of UK Government austerity, but that fact will not stop anger from low-income drivers who have to hand over £400 per year just to park at work. And that’s the final thing about thus policy: it’s tangible; every driver understands parking at work. Because it’s tangible, it’s easy to get angry about it.

One obvious tweak to this policy which would take the sting out of it for drivers would be to not allow employers to pass on the cost to employees. It’s unfair and arbitrary that some employees have to pay it because their employers decide to pass it on, and some don’t. Employers with car parks of more than 10 spaces will, in general, be bigger companies and will have more income available to absorb this cost than low-income

But if they decided to not introduce WPL at all, a wealth tax could be looked at, or simply bringing buses into public ownership, build more cycle routes or provide free access to bikes. That would require funding, which could come from increasing income tax on higher earners in the short-term, and sorting out local tax in the long-term. Any of this would surely do more for sustainable public transport than the car park levy ever would.

Picture courtesy of Nick Page