Something didn’t happen in the wake of the Budget. There was practically no media response to the Chancellor’s continued refusal, yet again, to increase fuel tax duty. Below we put this in the context of continued discrimination against sustainable transport modes and support for a more car-based transport system, as well as showing how the costs of motoring stand in stark contrast to other expenditure.
How much has he given to drivers…?
Cancelling the fuel tax accelerator means not taking some 3p per litre. A very rough calculation means that this represents a loss to the Exchequer of some half a billion pounds annually from car drivers, on top of the amount given in the previous budgets by the Coalition. Adding on the amount from freight this comes to more like a billion pounds per annum.
My calculation – again very rough – is that this is the equivalent expenditure for the average car driver of some 40 miles of driving. It is the amount that could be easily saved by slightly more fuel efficient driving or cutting out about half a percent of the mileage driven. In other words, were the accelerator to have been kept in place there would be minimal effect on the average motorist, but we still have an additional handout of some £1.5 billion to car drivers since this Government came in.(N.B. April 16th 2014: These numbers may well be underestimates – see post here)
…as compared to other modes…?
By contrast there is plenty to complain about with regard to public transport. And then we have the spectre of increased spending on road building. And of course, we have the refusal of the Conservatives to specify a budget for cycling, with the Labour party unwilling to give a figure.of how much it might spend to support the recommendations of the Get Britain Cycling enquiry. I think it interesting that the cycling lobby fails to make a connection between the amount recommended (initially about £10 per head of the population rising to £20, to come close to Dutch levels of expenditure) which is some £600 million p.a. – or about the amount the Chancellor has just given to car drivers again.
…and how much should drivers pay?
While the Campaign for Better Transport correctly lambast the petrolheads and lorry operators who want even cheaper petrol, they don’t make a case for more expensive petrol. I believe these arguments should be made. Here are some:
1. A. Motoring has got cheaper while other costs have increased.
While fuel prices may have gone up, as the costs of cars has gone down, the cost of motoring as a whole over the last couple of decades has either declined or stayed the same (depending on when the precise benchmark is made). By contrast, real earnings have declined and disposable income has declined:
Average real earnings growth 1979-2013
In contrast, more important areas of expenditure such as housing have significantly increased. So, even if it is judged that the economic priority is to give members of the public a financial boost to increase their spending ability, there are far more worthy areas for state allocation of funds.