Budget slammed for fuel duty freeze while rail fares rise
GOVERNMENT has been criticised for refusing to increase fuel duty in the March 3 Budget - just two days after a rail fares increase came into effect.
Chancellor of the Exchequer
Rishi Sunak confirmed in the
House of Commons that fuel duty was being frozen for the 11th straight year. But on the railway, regulated fares have risen by 2.6% (one percentage point above the Retail Price Index inflation measure).
“Freezing fuel duty for an 11th year, in the same week that rail fares went up, is a mistake and sends the wrong signals about transport choices,” said Campaign for Better Transport Chief Executive Paul Tuohy.
“These two policies put transport carbon emission targets even further out of reach and will worsen air pollution in our towns and cities.”
Tuohy said Government must look to reform what he called an old-fashioned and outdated vehicle taxation system and replace it with a road pricing scheme that was fairer to everyone.
“If Government is serious about a green recovery, it must also to do more to support public transport, including introducing flexible rail tickets as a matter of urgency to help people return to work when the time is right,” he said.
In a House of Commons Written Question to Sunak, Shadow Rail Minister Tan Dhesi highlighted the issue of freezing fuel duty while raising rail fares.
On March 10, Treasury & Equalities Minister Kemi Badenoch replied: “Households spend a significant amount of their total spending on transport fuels, and fuel costs are a factor in helping the competitiveness of British businesses.
“These are particularly important considerations in light of the ongoing COVID-19 pandemic, with households moving away from public transport towards using their own vehicles to avoid furthering the virus’ spread. As set out at the Budget, future fuel duty rates will be considered in the context of the UK’s commitment to reach net-zero emissions by 2050.
“Rail fares increased by 1% above inflation (2.6%) on March
1 - this is the lowest actual increase in four years. A small rise is necessary to ensure crucial investment in our railways. The Government temporarily froze fares, enabling passengers to purchase tickets at a lower price until February 28. Passenger demand has fallen dramatically over the last year and its recovery is uncertain.”
Badenoch said Government would continue working closely with the industry on initiatives to support demand and revenue recovery when the time is right. This will include working with operators to develop solutions around flexible ticketing for commuters, she added.
Rail Delivery Group Director General Andy Bagnall highlighted Sunak’s increase in the contactless payment limit from £45 to £100, adding: “We know passengers want an easier fares system and we want to work with Government to push forward reform.
“Raising the contactless payment limit will save people time when buying tickets. If introduced alongside retail reform with Pay As You Go introduced across more of the network, it has the potential to transform how passengers travel with the tap of their card - changing the game for longerdistance commuters, levelling up the regions, and helping to catalyse a truly national recovery.”
Meanwhile, Railway Industry
Association Chief Executive
Darren Caplan called for visibility of planned rail schemes: “The Chancellor himself said in his speech that ‘for business, certainty matters’.
“This is not about seeking more budget. Rail suppliers simply need the updated pipeline of rail upgrades to be published, along with the Integrated
Rail Plan and the Transport
Decarbonisation Plan, to help them build up capabilities and skills, and ultimately support jobs and investment at what is a very difficult time for everyone.”
While the creation of eight freeports was welcomed by the rail freight sector, GB Railfreight Managing Director John Smith called the Budget a “missed opportunity” due to a lack of support for modal shift.
Sunak mentioned there would be improvements for the transport links serving the eight locations (East Midlands Airport, Felixstowe and Harwich, Humberside, Liverpool City Region, Plymouth, Thames, Solent and Tees), but no additional details were confirmed.
Smith said: “Given the huge advantages that shifting freight from road to rail offers in terms of reduced emissions, this Budget is a missed opportunity to do more to support this shift through an increase in the current Mode Shift Revenue Support scheme.
“We eagerly await the Government’s Integrated Rail Plan, which we hope will be published shortly.”
Rail Freight Group Director General Maggie Simpson OBE said: “Rail freight plays a major role in sustainable distribution to and from ports all around the UK. Many of the new freeports announced by Government are already significant rail users, and this announcement paves the way for all eight locations to increase and grow their business on rail.”
Clemence Cheng, Executive Director at Hutchison Ports (which owns the Port of Felixstowe and Harwich International Port that will form Freeport East), said his company would help drive developments in green energy for use in the transport sector, but gave no more details. The branch to Felixstowe isn’t electrified, but the Harwich route is.
TSSA General Secretary Manuel Cortes said: “What we heard from the Despatch Box today was a lot of reheated announcements, coupled with showbiz and spin.”
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