Campaign for Better Transport response to the 2024 Budget

Wednesday, 6 March 2024 14:01

Responding to today's budget, Paul Tuohy CEO of charity Campaign for Better Transport, said: “By once again choosing to keep the 5p fuel duty cut and continue freezing fuel duty for another year, the Chancellor has committed to costing the Treasury a further £4.2 billion in lost revenue. Together this revenue would be enough to triple support for bus services across England and freeze rail fares for more than three years, positively impacting millions of public...Request free trial

Responding to today's budget, Paul Tuohy CEO of charity Campaign for Better Transport, said:

“By once again choosing to keep the 5p fuel duty cut and continue freezing fuel duty for another year, the Chancellor has committed to costing the Treasury a further £4.2 billion in lost revenue. Together this revenue would be enough to triple support for bus services across England and freeze rail fares for more than three years, positively impacting millions of public transport users and driving economic growth.

“Instead, the Government continues with retrograde measures that will do nothing to help those who have seen their bus services disappear, their rail fares rise and congestion blight their communities. It’s about time the Treasury reconsidered its priorities when it comes to transport.”

ENDS

Notes to Editors

All planned increases to fuel duty in line with RPI have been cancelled since 2011, with an additional 5p cut in place since Spring 2022. The additional 5p cut was meant to be temporary to help people with rising fuel prices but since its introduction, there have been significant reductions in fuel costs.
According to the Office for Budget Responsibility’s Policy Measures Database (November 2023), extending the 5p cut in fuel duty for 2024/25 will cost £2.6 billion (or more precisely £2,611,538,298), while extending the fuel duty freeze for 2024/25 will cost £1.6 billion (or £1,593,680,157).
All consecutive fare freezes and cuts so far (between 2011/12 and 2024/25) have cost HM Treasury a total of £133 billion in foregone revenue and over the next four years (2025/26 to 2028/29) are due to cost another £77.5 billion.
According to the Department for Transport’s annual bus statistics (Table BUS05bi), the net cost of public support for local bus services across England (including London) in 2022 (2023 figures not yet available) was £1.3 billion (£1,330,331,000). Adding the £2.6 billion foregone by the 5p cut in fuel duty being extended this year to this amount; could have tripled the amount of supported bus provision.
According to the Office of Rail and Road (ORR) rail industry finance data, fares income for 2022/23 was £8.6 billion. This is expected to have increased for this year, so averaging this with the 2019/20 (pre-pandemic) income of £10.4 billion gives an estimate of £9.5 billion of expected fares income. Fares increased by an average of 4.8% in the last three years (4.9% in 2024, 5.8% in 2023 and 3.8% in 2022). This increase would bring an additional £459 million. This means that the £1.6 billion forgone in extending the fuel duty freeze this year would have funded a rail fares freeze for three and a half years.