Smart Transport

Budget 2021: Fuel duty freeze 'sends the wrong signal about transport choices'

Petrol and diesel fuel pumps

Smart Transport member Campaign for Better Transport has criticised Chancellor Rishi Sunak’s decision in the Budget to continue freezing fuel duty as it “sends the wrong signal about transport choices”.

Chief executive Paul Tuohy said: “Freezing fuel duty for an eleventh year, in the same week that rail fares went up, is a mistake and sends the wrong signals about transport choices.

“These two policies put transport carbon emission targets even further out of reach and will worsen air pollution in our towns and cities.

“The Government cannot continue to avoid the inevitable, it must look to reform the old fashioned and outdated vehicle taxation system and replace it with a road pricing scheme that is fairer to everyone and better supports the Government's green ambitions.”

Katy Taylor, chief strategy and customer officer at The Go-Ahead Group, agreed: “In the long term, rather than adjusting rates of fuel duty, it is surely time to consider a broader road pricing scheme which will encourage people to think harder about the social and environmental cost of private car usage.”

Although there was no mention of road pricing as a potential replacement for fuel duty and VED in the Budget, it has been the subject of a Transport Select Committee inquiry and the Government has said it will launch a number of tax policy consultations on March 23. 

Some did welcome the Chancellor’s decision to freeze fuel duty.

Sir Mike Penning MP, chair of the All Party Parliamentary Group (APPG) on Road Freight and Logistics and former roads minister, said: “Freezing fuel duty will be a real boost to Britain’s hauliers who have been the unsung heroes of the pandemic, but the Chancellor must go further and investigate the need for an essential user rebate for UK hauliers. 

“Our haulage industry will be vital to our economic recovery and the Chancellor must ensure that they are not held back by paying highest rate of fuel duty in Europe.”

Ashley Barnett, head of fleet consultancy at Lex Autolease, suggested it was not yet the right time to increase fuel duty but future rise would be “inevitable”.

“An alternatively-fuelled future simply can’t happen overnight,” he said.

“The affordability of electric vehicles is a key barrier towards mass adoption and for some people, an ICE (internal combustion engine) vehicle remains their only option.

“Against the backdrop of the pandemic, many people are still using cars as a safer mode of transport and any rises would feel counterproductive at this moment in time. 

"As momentum continues to shift away from petrol and diesel, a future rise in the 10-year fuel duty freeze feels inevitable and will help fund investment in greener alternatives.”

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