The freeze on fuel duty since 2011 may well be welcome news to many car drivers but there are costs. The effect of the freeze has been to increase travel with consequent costs, including lower tax revenue for the Government, additional carbon emissions and more congestion. More affluent households benefit disproportionately from the freeze.
A report in 2018 by Begg and Haigh examined the issues. A summary from the report is set out below.
Traffic has grown by 4%, worsening both congestion and pollution • The increase in traffic has produced an additional 4.5 million tonnes of CO2, including 2.8 million from cars and taxis and 1.7 million from lorries and vans. • The increase in traffic has produced 12 thousand tonnes of NOx, and 816 tonnes of PM10s • The freeze on fuel duty cost the Treasury around £7 billion in lost tax revenue in 2017 . Since 2011 the freeze has cost the Treasury around £46 billion.. In addition, there had been less rail revenue and more rail subsidy. • Public transport usage has decreased by between 1.3% and 3.9% causing there to be up to 60 million fewer rail journeys and up to 200 million fewer bus journeys. |
The report suggests that long distance holiday trips were 10% higher than they would have been - an interesting point which is a factor in increasing traffic in Cornwall from tourism.
There is also a question of equity. Poorer households are less likely to own a car and travel less than on average."... between 2002-2019, the lowest income households had fewer drivers, made nearly 20% fewer trips and traveled 40% fewer miles in total than the average household." [Ruiz & Wiśniowski, 2021], while the National Travel Survey indicated that "... people in the highest household income group travel more than twice as far as those in the lowest group."
A policy change with higher fuel taxes would result in fewer trips, lower emissions and less congestion. Current policy is to accommodate the excessive demand!
Sources
Begg, D, and Haigh., C,The unintended consequences of freezing fuel duty,Greener Journeys, 1 st June 2018.
Department for Transport, National Travel Survey 2015.
Ruiz and Wiśniowski University of Manchester, Social Statistics Department. Foreword by James Blackham. By Miles The Low Income Penalty Report. Is the UK’s current car tax system hurting the poorest in society? August 2021.
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