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Replacing fuel duty

Darren Shirley's picture
car being filled up with petrol

Despite widespread rumours to the contrary, the Chancellor took the decision to continue the fuel duty freeze in March's Budget. We were disappointed with this decision as we believe it sent the wrong signal. Since the fuel duty freeze was introduced in 2009, average bus fares increased by more than 60 per cent and rail fares by 50 per cent. 

This is one of the factors behind the decline in bus use over recent years and an increase of private car use: between 2013-2018, the average number of trips per person made every year across England as a car driver has increased by four per cent, while the trips made by public transport have fallen by 12 per cent. 

The UK has legally binding climate change and clean air commitments which require a major shift away from private car use, that’s why it is imperative that all communities have access to high quality, affordable, sustainable public transport, as well as safe and attractive infrastructure for walking and cycling. But investing in public transport infrastructure and service provision alone isn’t enough; the Government also needs to support people to make the right travel choices and send the right price signals by making public transport attractive compared to using the car. 

The Treasury should now look to replace fuel duty and Vehicle Excise Duty with a new road use charge that varies by distance travelled, time of day, and how polluting the vehicle is. The revenue raised by this charge should be kept at a local level and used to fund maintenance and renewals of the road network, along with investment in public transport.

If the Government really does intend that ‘public transport and active travel will be the natural first choice for our daily activities’ (Decarbonising Transport: Setting the Challenge), then it must recognise that investment in public transport alone will not be enough to shift the balance away from private car use. The Government should publish a trajectory for changes to road transport taxation to encourage modal shift, support the transition to a zero emission fleet, fund future local road upkeep costs and help reduce transport’s carbon emissions to net zero by the next Budget.