Our reaction to the 2024 budget
It’s been another thrilling budget day at Campaign for Better Transport HQ. Despite our very reasonable list of budget suggestions that could have saved the Treasury billions, Jeremy Hunt went ahead and announced yet another freeze on fuel duty. So, what, if anything, was in the budget for transport?
‘Temporary’ cut and freeze in fuel duty remain
Disappointed but not entirely surprised. It was rumoured that the Chancellor would once again freeze fuel duty in a ‘boost’ to drivers, and the rumours were true. Well, sort of. The Chancellor did indeed continue the freeze in fuel duty since 2011 and the 5p additional cut introduced in 2021 as a ‘temporary’ relief for high fuel costs – despite prices at the pumps long since returning to normal. But is this really a boost to drivers?
By the government’s own admission, this would save the average driver only £50 across the year. However, put it all together, and maintaining the 5p cut and continuing the freeze on fuel duty will cost the Treasury a further £4.2 billion in lost revenue over the next year.
We’ve calculated that this lost revenue would be enough to triple support for bus services in England and freeze rail fares for three and a half years. These are measures that would have an enormous impact on millions of public transport users and would also help drive the economic growth the Chancellor is so clearly desperate for, in addition to reducing congestion and improving quality of life.
And yet still, Mr Hunt delivered this unsurprising announcement with a slice of ‘war on motorists’ rhetoric. But is losing £4.2 billion a year really a win for drivers? Back in November we surveyed drivers on attitudes to public transport, and the results showed that an overwhelming majority want to see more investment in public transport:
- 74 per cent of drivers surveyed want more options to get around than relying on driving
- 90 per cent want to see a bigger rail network
- 97 per cent want cheaper rail fares
- 94 per cent want more and improved bus routes.
Similarly, when conducting research for our report Pay-as-you-drive: The British public’s views on vehicle taxation reform, one of the main concerns to emerge from focus group discussions was the impact of lost revenue from fuel duty on funding for public services.
The 5p cut was originally introduced to address rising fuel costs, but as the prices at the pump have normalised, this vast loss of revenue is hardly a ‘boost’ for drivers who also want to see improvements across our public transport networks.
APD raised on business class flights
Not the rise in Air Passenger Duty (APD) we were after, but a rise in APD none the less. The Chancellor has announced a ‘one-off adjustment’ to the level of APD on non-economy tickets in line with forecast RPI. This will apply to premium economy, business and first class, and private jet passengers.
We do want to see higher taxes on the most polluting forms of transport, but the Treasury could have raised a lot more money, £275 million over four years to be exact, by reversing the recent cut to APD on domestic flights.
We can also glean from this announcement that private jet passengers will continue to pay the same rate of APD as first-class passengers on scheduled flights, despite the fact that private jets are between five and 14 times more polluting than commercial flights. And let’s not forget that private jets are generally exempt from VAT.
Our proposal for a ‘super’ rate of APD for private jets could save around £1.4 billion each year which we, naturally, think should be invested in rail and buses.
Anything else?
Not really! As part of the creation of the Cambridge future development corporation, the Chancellor announced £10 million for ‘crucial local transport and health infrastructure’, but aside from that, not much else.
We continually set out how a re-prioritisation of transport funding could not only save the Treasury billions, but actually generate growth across the county. Instead, this Government continues with retrograde measures that do nothing to help those who have seen their bus services disappear, their rail fares rise, and congestion blight their communities. We’ll continue to call for a re-allocation of funds away from our most polluting forms of transport and towards giving communities access to sustainable public transport, and maybe one day, we’ll be listened to.
