A Motorcycle Safety and Transport Policy Framework
Summary
Cycling has benefited from tax incentives and advertising to promote cycling as a form of commuting. Motorcycling could extend that commutable distance on two wheels by a significant factor.
MCIA will work with government to help create and implement a parallel Motorcycling to Work scheme.
Description
Motorcycles offer a low cost congestion-busting form of transport as evidenced by their continued popularity across the world. Increasing the number of motorcycles on UK roads would help relieve peak time congestion and would help achieve the UK’s CO2 reduction targets. A 2011 study by Transport and Mobility Leuven showed that a modal shift of 10% from private cars to motorcycles reduced lost vehicle hours in congestion on a trunk road by 63% for everybody using that route (ie not just the motorcyclists). A modal shift of 25% (one quarter of all cars replaced by motorcycles or scooters) eliminated congestion altogether. The study also showed that a 10% modal shift reduced overall CO2 cost on that route by 7.5%.
Since 2000, cycling has benefited from tax incentives to employees who purchase or borrow a bicycle or cycling safety equipment through their employer. Schemes such as Halfords ‘Cycle2Work’ operate as a salary sacrifice scheme in which the employee purchases the bicycle and equipment on a hire/purchase agreement from their employer and the repayments are taken from their salary before tax and national insurance contributions are deducted. This makes the cost of the bicycle and equipment significantly cheaper than purchasing the same thing through a high street retailer. Cycle to Work can also include the simple loan of an employer’s bicycle to an employee as a tax exempt benefit.
The cap on the amount that can be lent to the employee is limited to £1000 in practice as schemes would otherwise have to be regulated individually under the Consumer Credit Act rather than using the cycle to work group consumer credit licence agreed with the Office of Fair Trading (now the Competition and Markets Authority).
In 2011, the leading providers of Cycle to Work, under the umbrella of the Cycle to Work Alliance, produced an evaluation of the impact of Cycle to Work. The headline findings were that:
- There was a significant reduction in CO2 emissions from commuting traffic
- The scheme increased commuting by bicycle with 61% of participants reporting that they did not cycle to work before signing up
- 73% cited the financial savings as being a key factor in signing up with an average saving of 40% on the total cost of a new bike
- 400,000 people have benefited from the scheme
- It was mostly SMEs who took advantage of the scheme with 30% of employers having fewer than 50 employees.
Naturally, the average price of a motorcycle and equivalent safety equipment is somewhat higher than for bicycles. This would mean that in practice the value of the package available to the employee would need to be higher and that joining the £1,000 group consumer credit licence may not be practical. Average prices of motorcycles are between £4-5000 and safety equipment could easily cost £500.
A £5,000 package would have a bigger impact on tax take for the Treasury, especially if the scheme proves popular, but this would in turn be offset by the larger contribution of motorcyclists to government coffers via fuel duty, VED, insurance premium tax, VAT on consumables, etc. Given that there are driving licence requirements for motorcycles that are not there for cyclists, it may be harder to achieve the 400,000 mark in 10 years. Therefore, the incentives would need to be quite strong, for example including a quality training package.
Research for the Wheels to Work Association (W2WA), a previously government funded initiative which provides personal transport for work and education (usually, but not exclusively, using rented scooters and mopeds), shows a variety of costs for getting on the road. The research showed that, including goodwill discounts, the average cost of getting a scooter, safety equipment and training was £1,500. Including a reasonable operating margin (ie excluding a discount) might bring that total up to £2,000. However, this is only for the most basic machines and equipment and the government may wish to incentivise motorcycles which may offer a wider commuting range.
Some further modelling and research is needed on this topic to ascertain how the scheme could operate. Requiring employers to individually apply for consumer credit licences for what could in practice be a small number of employees would probably be too high a burden. Deciding a limit on what could be practical will need refining as well as the business case for permitting such an incentive.
Next Steps
- MCIA will work with tax experts and those already involved with Cycle to Work schemes to design a scheme which will help offer financial incentives to the public.
- MCIA will then work with the Government to help implement the proposals.
- Socio-demographic data should be considered as a tool for further research in to the potential benefits of this scheme.
- Industry to consider a pilot in conjunction with government or a transport authority.
Progress
UPDATE – Action 29 – To Establish a ‘Motorcycle to Work Scheme’ to Incentivise Motorcycle Commuting
Work continues to identify specific areas and design a suitable scheme. This is also now focussing on safety equipment and related items.
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