According to the Institute for Fiscal Studies, revenues from fuel duties totalled £27.2 billion in 2014-15. The freeze in fuel duties from 2010 under the coalition government and continued under the current Conservative government has resulted in a loss of £4 billion in revenue if duties had risen in line with inflation and £6.3 billion if the fuel escalator introduced by Labour had been kept. Thats a lot of money which would have provided funds to the government and also ensured that motorists paid more to the costs they impose on the wider community and environment.
The recent fall in fuel prices has drastically reduced the costs of motoring and increasing efficiencies mean that less fuel is now required per mile travelled.
The IFS state that while fuel duties are a good proxy for capturing the cost of carbon emissions – although over charging in this case – they do not capture the costs imposed by congestion for which congestion charges would be a better option.
Although we understand the concern over congestion and the need to cost it through some form of road pricing there are issues here. Do we want to reduce motoring costs in regions like Cornwall which are ‘less congested’ than say London? Should drivers be encouraged to travel at times when there is less traffic even though that would spread the impact of car use in terms of noise pollution and probably reduce the incentive to use other modes of travel or not travel at all?
We need to reduce car use and fuel duty as part of a range of policies including congestion charges and parking charges has a role to play.