The Budget- the time to act and make public transport a priority is now
In two weeks’ time, the Chancellor will be announcing the spring budget for 2023, against a backdrop of record high inflation, public sector pay disputes, and the still rising cost of living. This fiscal fiasco might indicate that the usual ‘difficult decisions’ could be made, but the Government still has binding environmental targets to meet, with deadlines inching ever closer.
These ambitious targets should be met with actual ambition, as well as creative thinking; we’ve previously found the Chancellor £20bn, enough to halve the deficit, by simply shaking up the government’s transport priorities. Achieving Net Zero and levelling-up the country shouldn’t be mutually exclusive, and a green economic recovery is possible with transport playing a vital role. This is why we’re asking the Chancellor to prioritise transport in the upcoming spring statement.
Buses
The recently announced three-month extension to the Bus Recovery Grant is welcome but extensions only go so far, with many bus routes being deemed financially unviable and cut before funding runs out. To break this cycle of funding cliff-edges, a long-term funding strategy for buses is needed. A well-serviced bus network is good news for passengers, the environment and the economy. Analysis shows that investing £10 billion in buses over the next five years would increase the number of bus services by seven per cent, improving services for an additional 20 million people, and generating £3.68 of economic benefits for every £1 invested.
What we want to see for buses:
- The £2 bus fare cap widely marketed to attract new customers on board. There’s evidence that non-bus users aren’t even aware of the £2 scheme; to boost bus passenger numbers to pre-pandemic level, new passengers must be brought on board.
- A proportion of local authority block grants ringfenced for local bus funding. This would ensure that funding for buses is spent on buses, and not other public services.
- The current competitive system of funding replaced with a single, long-term funding framework for buses.
Roads
Improving public transport can be done at zero cost by reprioritising investment away from carbon intensive road building. Congestion is a proven drag on economic productivity, estimated to cost the UK economy at least £13 billion a year; but as has been proven time and time again, building roads does not solve congestion, but rather creates more traffic. The Government should follow the Welsh Government’s example and review all planned road schemes which have not progressed to significant delivery stages. Cancelling just five planned road building schemes would save the Treasury £16 billion. Imagine what that could do if invested in better public transport!
What we want to see for roads:
- Traffic reduction targets set for England
- Halt and review all planned road schemes which have not progressed to significant delivery stages.
Rail
The UK railway sector is a vital enabler of economic growth, but the pandemic has meant more home working, more off-peak travel and much lower season ticket sales. Rail services and fares now need to adjust to reflect new travel patterns. Capital spending on the railway should also be protected. A 10 per cent increase in rail infrastructure investment could boost the number of jobs in the UK rail supply sector by nearly 21,000 in 2025-29. If that extra investment were focused outside of London, it would contribute substantially to levelling-up.
What we want to see for rail:
- Rail fares reform, with an end to ‘split ticketing’ and the introduction of single leg pricing across the network.
- An expansion of pay-as-you-go ticketing across the country outside of London.
Fuel duty
Since 2011, all planned increases to fuel duty have been cancelled, this has meant a 12-year real terms cuts to fuel tax for motorists. The additional 5p cut announced in the 2022 Spring Budget, was meant to be temporary to help people with the cost-of-living crisis. Since then, fuel costs have fallen and while the cost of living is still a worry for many, against these significant price drops, not continuing the 5p cut in fuel duty would barely be felt at the pumps. By contrast, rail fares are set to increase by 5.9 per cent from 5 March. While fuel duty has been frozen for 12 years, over the last 10 years rail fares have risen by 33 per cent, and bus and coach fares by a staggering 90 per cent. Making driving cheaper discourages people from choosing sustainable public transport, putting our climate goals further out of reach.
What we want to see happen to fuel duty:
- An end to the temporary cut to fuel duty when it ends in March 2023. This would save £2.4 billion, which we want to see invested in public transport.
Pay-as-you-drive
With the switch to electric vehicles, tax revenue from fuel duty will plummet, so in the long term, vehicle taxation needs reform. While extending Vehicle Excise Duty to electric vehicles from 2025 is a sensible first step, the main revenue gap comes from EVs not paying fuel duty. Distance-based road pricing, or pay-as-you-drive, is the logical solution for this. It could be paid by all drivers, instead of fuel duty and vehicle excise duty, with EVs charged less than more polluting vehicles.
We want to see for vehicle taxation:
- A cross-party mechanism to secure an agreement on the need to reform vehicle taxation, to meet net zero targets
- An independent commission established to examine options for reform
Prioritising transport means prioritising growth as well as the environment. It means prioritising communities and health. Government should learn to think creatively and build the transport system we need for the future.
