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Raising speed limit to 80mph a stealth tax on drivers that will damage the environment

1 October 2011
Figures released today by Campaign for Better Transport show that motorway drivers could be be hit hard, paying an extra £500 million a year to the Treasury, if a new 80mph speed limit on motorways is brought in.

As Transport Secretary Philip Hammond prepares to address the Conservative Party conference this afternoon, his claim that a higher speed limit will bring "benefits of hundreds of millions of pounds through shorter journey times” was discredited by research conducted by transport consultants MTRU, commissioned by Campaign for Better Transport.

The research shows that the Government's cost-benefit calculation is flawed and that time savings will be outweighed by drivers paying an extra £640 million on fuel, while the Treasury will gain nearly £500 million. A realistic cost-benefit analysis of time savings versus fuel costs would show the overall cost to car users will be the equivalent of around £200 million a year.

Stephen Joseph, Campaign for Better Transport's cheif executive, said: “These findings put paid to the claim by Philip Hammond that an 80mph limit will benefit motorists and boost the economy. What it will actually boost are the Government's coffers at the expense of drivers, road safety and the environment.

"In cash terms alone, this study shows that drivers will pay dearly for this policy, while the Government will make an extra half a billion pounds in taxes. When the costs of air pollution, noise, crashes and the effects of climate change are included, this policy would be expensive for everyone except the Treasury.”

The study modelled and compared two situations. The first calculates the costs and revenues from cars driving above 70mph under the current regime, the second estimates the likely effect on these figures of increasing the limit to 80mph. In the first case, the Government was found to gain more than £300 million a year in fuel duty and VAT from speeding on motorways. Increasing the speed limit added a further £492 million, solely due to the effect of increased fuel consumption.

The MTRU research did not consider air pollution, noise, carbon emissions or the extra cost of collisions, but the extra cost to the economy of all of these problems from raising the motorway speed limit to 80mph are also likely to be considerable.


Notes to Editors

1. Philip Hammond will take part in a Conservative conference plenary ‘Rebalancing the Economy’ at 14.30 today – see http://www.conservatives.com/Get_involved/Conference.aspx

2. Research:  Relative impact on fuel duty and time savings with speed limits of 70mph and 80mph.

3. The Government’s own figures are likely to claim that the Treasury will benefit by less than the study calculates, and that drivers will benefit overall, because models used by the Department of Ttransport to calculate fuel consumption at higher speeds are flawed. The Government’s standard ‘WebTAG’ model for fuel consumption is designed for a wide range of traffic modelling tasks, and does not work well at the high, steady speeds seen on the UK’s motorways. Instead, most transport experts prefer to use calculations based on fuel consumption at a steady speed in these situations, as these better reflect motorway driving. These 'steady state' models result in much higher fuel consumption being found at speeds above 70mph.