Personal Contract Hire (PCH)

Tales from the Minds of the Muddled Green MPs

In early 2010, in our pre-Conservative, come-Lib Dem, come-who the heck knows anymore Britain, New Labour were still plugging away at their attempts to spend another four years lingering in the murky shadows of Downing Street, picking up the scraps of Tony Blair’s transatlantic obsessions whilst trying to stay upright as Gordon Brown delivered another party conference speech. After some of the most unimpressive performances from a recent government, following the catastrophes of the MPs’ expense scandals and the recession, the country was left with a government wholly disconnected from the world outside Westminster.

But never fear! In our country of cycling MPs, environment-conscious parties and David Cameron, many British politicians took to the streets to secure the title of most Green MP, to reconnect with the disillusioned public. Many, however, seemed less concerned with “being green” than with “being seen”, hopping on a bike or bus for a change with P.R officers whispering in their ears that by plonking their bottom on a bike seat every once in a while was sure to get them noticed. These green MPs however, whilst being showered with love and praise from every news channel in the country, were almost always escorted by several armoured police units and a half-dozen 4x4s. “Being green”, it seemed, had less to do with one’s CO2 emissions, than with how many shots it could get of you smirking like a smug 6 year old who has received a smiley-face sticker from the dentist. As more MPs jumped on the green bandwagon, declaring their dedication to the environment from the front of tabloid newspapers, New Labour continued with more bureaucratic attempts to cut the country’s CO2 emissions; deciding it was time to target the working men and women issued with company cars across the country each day, hence the shift towards personal contract hire (PCH).

As the fatal political D-Day of the 6th of May fast approached, Alistair Darling presented the Labour Budget for the next economic year to a House of Commons brimming with cynical hoots and hollering from the Opposition. As Darling delivered what some saw as a hopeless budget endeavour, considering the devastating occurrences of New Labour’s last few stumbling and often clumsy years, Darling continued with his want to reward those using lower emission vehicles, a measure originally set in place back in 2001. Along with the usual buzz-words about efficiency, productivity and effectiveness regarding the reason for the measure, the government issued a somewhat confusing series of instructions regarding VED rates and the taxes on certain vehicles in an attempt to keep buyers and company cars users from registering or using less fuel-efficient vehicles. The government could sleep well at night, knowing it was doing its bit for the environment as well as raising more than just an eyebrow from more potential PCH customers in the shift away from company cars and the dreaded company car tax burdens.

The system, in use since April 2001, regarding the taxing of vehicles (which excludes cars on private contract hire) has been split into 13 simple bands, depending entirely on a vehicle’s CO2 emissions, giving people the simple choice of whether to have a green conscience or not. However, in an odd and rather meandering way, in 2010 the government continued with its attempts to ward off members of the public and those with company cars from using the less fuel-efficient vehicles, with a measure entitled ‘the first-year rates’: A title which wouldn’t seem unfitting to be used by some quasi-political rock group from the Canary Wharf area. This meant that any car – except cars purchased outright by individuals or those on PCH – using less than 131 -140 CO2 (g/km) (Bands A-D) would pay no additional tax on their vehicle for their first year, while a vehicle issuing from 131 to over 255 CO2 (g/km) could be charged up to an extra £950, and so on and so forth. So whilst politicians swanned about being issued with brownie points for using a push bike while coughing on the exhaust fumes of their heavily fortified cycle route, the working men and women using company cars – rather than opting for a new car on personal contract hire – and registering vehicles realised they were paying the real price, as the government yet again imposed a measure which prevented people from freely driving what they wished without having the niggling little environment issue pull at their heels and look at them through big puppy dog eyes.

With the issuing of tables and graphs from different companies and governmental offices to help people understand the numbers, figures are banded around in an attempt to identify how much company car users will be paying. But it seems that the mathematics of working one’s bill out at the end of a company car trip seems so long, laborious and downright difficult, you would have been better opting for a slightly “greener” option by jumping on one of the country’s exceptionally un-efficient train services or opting to take out a new personal contract hire deal.

And perhaps this is entirely what the scheme intends to do: confound every normal person who doesn’t have the mathematic mind of an executive accountant at some fancy firm, so that we all just say “bugger it” and get the bus or choose PCH. Then, we pour more money into the pockets of government and exec types in office blocks towering over London skylines, and die with a couple less hundred quid in our pockets. Hyperbolic and cynical, but who can be blamed?

The measures set in place mainly effect company car drivers who are using cars for long trips, weeks away at a time. If the government put more money into public transport and better connections between towns, with higher levels of comfort, perhaps this would bring down CO2 emissions more than just charging the people who need to work and earn money to support families. In our current un-secure economic climate, the government’s attempts to encourage people to “go green” seems somewhat contradictory, as we see the MPs skulk from the steps of their million pound homes into the back seat of some 5 litre Bentley. The increase in the popularity of PCH can be attributed to the taxation of individuals in company cars, but also the value for money that these agreements give people; a new car, every two or three years without the hassles of ownership.

And one can’t help but question, how much are the MPs being charged for their trips? And exactly how much of my hard earned money is being put into Mr Cameron’s Jaguar tank every week?

Article by William Kenneth John Anderson