Rebalancing transport costs: five good things in the Budget

28 November 2025  |  Ben Plowden  |  Aviation

The cost of different forms of transport, both on their own and relative to each other, has a critical influence on whether and how people travel. People on low incomes can’t use public transport if it’s too expensive. People with access to a car will use it more if it’s cheap relative to other choices.

That is why changing transport costs to support sustainable transport choices has always been a campaigning priority for Campaign for Better Transport.

What have been our specific concerns?

For more than a decade now, fuel duty for drivers has been frozen, while regulated rail fares have risen year-on-year. And in 2022, fuel duty was cut by 5p a litre, while rail fares rose by almost 4 per cent.

This has harmed the environment, harmed passengers, and failed to help those households struggling the most.

So, when the Chancellor announced her Budget this week, we were very glad that she heeded our calls to begin rebalancing transport costs towards more sustainable modes.

The Chancellor chose to freeze rail fares and phase out the fuel duty cut, as we had called for in our Budget submission and through our public campaigning.

She also chose to introduce a small per-mile charge for electric vehicles, increase tax on private jets, and invest in rail projects – also things we called for.

Here are five very welcome measures that were included in the Budget (and one not-so-welcome):

1. Rail fares frozen

Cost is the number one concern for people wanting to travel by train, so it is very welcome that fares will be frozen next year as we have long called for. As well as helping households with the cost of living, this will enable more people to choose rail, reducing traffic on our roads, benefitting the economy and helping the environment.

As plans for Great British Railways gather pace, this is a positive sign that affordability for passengers is being given the high priority it deserves. But this needs to be just the first step for a root-and-branch reform of fares, so the Government’s objective of an “affordable” railway becomes a reality.

2. Fuel duty to rise

We also welcome the gradual ending of the 5p fuel duty cut, and the ending (in 2027) of the freeze on fuel duty, which will help rebalance transport costs and recoup billions in lost revenue. With the price of fuel at its lowest since 2021, the impact on fuel bills for individuals will not be large, and the money raised can be used to benefit hard-pressed households and the country, rather than fuel retailers.

However, we will urge the Government to consider an exemption for buses and coaches, given the significance of fuel costs for bus operator overheads.

3. A small per-mile charge for electric vehicles

We have consistently made the case that electric vehicle drivers ought to pay a per-mile charge, set at a low rate so that EVs remain more affordable to drive than more polluting cars. So, we welcomed the new 3p-per-mile charge, which will help make up for the fall in fuel duty revenue as the transition to electric vehicles gathers pace. It will also help offset the ‘rebound effect’ we are seeing in Norway, where electric vehicle ownership is leading to a 10-20 per cent rise in car trips.

With a 3p per mile charge, EVs will still be more than £1,000 a year cheaper to run than petrol cars.

4. Private jets taxed more

Right now, most private jet passengers pay only the standard rate of Air Passenger Duty – the same as someone on a commercial flight – with only those on the most bloated private jets paying a higher level. But thanks to the Budget, from 2027, all private jets over 5.7 tonnes will pay APD at the higher level. That’s more than twice as many journeys affected.

Private jets are massively polluting, so this is a very welcome measure.

5. Funding for rail projects

Rail is great for the economy, communities and the environment, so we were very pleased that the Budget included a commitment to fund some key rail projects including:

• The Docklands Light Railway extension to Thamesmead
• Midlands Rail Hub
• Northern Powerhouse Rail
• The Transpennine Route Upgrade.

The results of projects like this often massively exceed expectations: half a million journeys were made on the reopened Northumberland Line in a matter of months, and one in every seven national rail journeys are now made on London’s Elizabeth Line!

A fly in the ointment: roads and airports

The fly in the ointment was support for the Lower Thames Crossing and expanding Heathrow Airport. More major roads and bigger airports will only create additional road trips and flights, when we should be encouraging a shift to more sustainable forms of travel. It is very disappointing that these schemes are being progressed when many people still don’t have the frequent and reliable buses and trains they need for everyday journeys.

We will keep campaigning for sustainable modes to be given higher priority. But in the meantime, we welcome this Budget, which contains so many of the things that we – and our supporters – have worked to achieve.