Transport charity finds £20bn to plug Treasury blackhole

A green shake-up of transport priorities could save the country almost £20 billion, cutting the entire budget deficit by half, Campaign for Better Transport has revealed.

The transport charity has shown how:

• Cancelling just five road-building schemes could save £16 billion
• Taxing fuel for domestic flights, not including lifeline flights such as those to Scottish islands, could raise £0.6 billion
• Introducing a pay-as-you-drive scheme which charges electric vehicles a small amount per mile from 2025 could raise £0.6 billion
• Not renewing the temporary cut to fuel duty when it ends in March 2023 could save £2.4 billion.

Norman Baker from Campaign for Better Transport said: “The good news for the Chancellor is that by rethinking some outdated ideas about transport he can save nearly £20 billion. Do we really need massive, destructive road-building schemes? Or tax-free fuel for domestic flights when suitable rail options are available? The black hole in the budget says ‘no’, and so does the planet.

“It’s time for a green shake-up of transport priorities. Cutting road building and taxing domestic flights would mean vital levelling-up projects like Northern Powerhouse Rail could go ahead, lifeline bus routes could be saved, and many non-transport public services could also get a reprieve.”

With many drivers shifting from petrol and diesel to electric vehicles, which pay no VED or fuel duty, the charity is also highlighting the need to replace the current system of vehicle taxation with a pay-as-you-drive system, which charges electric vehicle drivers, albeit at a much lower rate than drivers of more polluting vehicles. Charging just 1p per kilometre for electric cars from 2025, with low charges also for electric vans and lorries, would raise £0.6 billion in the first year alone.

Mr Baker added: “Our research has shown that most people think vehicle taxation needs reforming, and almost three times as many people support the idea of a pay-as-you-drive scheme as oppose it. Pay-as-you-drive can be fair and popular and help to keep public finances afloat.”