The Budget held bitter blows for public transport users
This week, Chancellor Rachel Reeves announced the Government’s first Budget. While it included some welcome measures, they will be little comfort to people who rely on public transport, for whom the Budget contained some bitter blows.
There’s no getting around the stark facts. For bus users, the Budget increased the cap on fares for single journeys outside London by 50 per cent. For rail passengers, it hiked the cost of railcards and increased rail fares above inflation. And at the same time, for drivers, it froze fuel duty for the 15th year running and kept in place the so-called temporary 5p cut.
While it is some relief that the bus fare cap was not scrapped entirely, the jump from £2 to £3 is significant, and will likely hit passenger numbers. Increasing rail fares above inflation for only the second time in more than a decade is a further kick in the teeth. As for increasing the cost of railcards for families, young people, veterans and seniors, this is a harmful step in the wrong direction.
By failing to end the fuel duty freeze and the 5p-per-litre cut, the Chancellor committed to costing the Treasury £4.2 billion in lost revenue. This failure is even more marked when you consider the Government’s professed commitment to helping hard-pressed working people, because freezing fuel duty disproportionately helps the richest households. With wealthier people driving more and in bigger cars, almost two-thirds of savings from the fuel duty freeze go to the richest half of households, while only just over a third go to the poorest half.
Her failure to end the 5p fuel duty cut, in particular, represents a massive missed opportunity. The cut was introduced ‘temporarily’ more than two years ago, when fuel costs were much higher than they are now – and the savings have not been passed on to motorists. The Chancellor could have ended it, and indeed was widely expected to do so.
Of course, the stark contrast between the treatment of public transport users and car drivers is hugely concerning from an environmental perspective. To tackle climate change, air pollution and congestion, we need to make public transport the attractive, affordable choice. When it first came to power, the Government promised that making transport greener was one of its priorities, but it has undermined that promise by failing to adequately tax our most polluting forms of transport and support the most sustainable.
I mentioned that there were some welcome measures in the Budget. We were pleased that the Chancellor listened to our calls to raise Air Passenger Duty for private jet passengers, something we have been consistently calling for. We also welcomed the decision to increase Air Passenger Duty on domestic flights; we hope the money raised will go towards improving rail alternatives.
The announcement that HS2 will run to Euston station was a victory for common sense – ending it at Old Oak Common would have been deeply illogical. And the funding announced for buses – our most-used form of public transport – was important and welcome.
But the overall message from the Budget was that the Chancellor could have chosen to raise much-needed funds while helping passengers and encouraging sustainable travel, but she failed to do so. She – and the Treasury – must reconsider their priorities when it comes to transport.
