RAC Foundation: The Chancellor's Budget

It all happens in November. While the Club’s annual London Motor Week and bonfire night have both come and gone, the Chancellor’s Budget still lies ahead.

In only a matter of days, Philip Hammond will set out from No. 11 Downing Street with the famous red box containing his tax and spending plans for the year ahead.

The RAC Foundation has been putting the concerns of motorists to the Chancellor and other Treasury ministers (including Andrew Jones, Exchequer Secretary and one of the early arrivals in Brighton on this year’s Emancipation Run).

We make it our business to remind the folks who decide on motoring taxes and roads spending that our economy depends on having a reliable, affordable, safe, environmentally-friendly transport system, not least an adequate road network given that the latest Department for Transport figures reveal that over half of commuting trips are made by people driving a car or van. And let’s not forget that our roads also carry 76% of domestic freight by weight.

That’s why we made the following arguments:

- The first Road Investment Strategy, the package of business objectives and funding pledges for Highways England, has been widely regarded as a success. But it needs sustained funding. With planning already well under way for the period beyond 2020, it would send out a strong message to road users and contractors if the proposal to feed income from Vehicle Excise Duty into a Roads Fund was now put into law.

- For several years there has been a stubbornly high local road maintenance backlog estimated by local authorities to be in the region of £12 billion-worth of work. Consider guaranteeing a sizeable one-off boost in 2019-20 or 2020-21 with conditions applying such that the allocation of funds could be linked to innovation in contracting, multi-authority procurement, and the use of advanced design and material techniques. As with Highways England’s strategic roads, such a move would give both councils and their contractors the confidence to plan ahead.

- Sustain the programmes that support the development and take-up of ultra-low and zero emission vehicles. The market for these vehicles is still fragile and while more and more models are being offered in the showrooms they have yet to sell in great numbers – to the end of September 2017, 122,000 claims had been made under the plug-in car grant scheme since it started in 2011, while there is a total of 32 million cars in the UK.

- Resist the temptation to increase motoring taxes. The cost of motoring disproportionately hits low-income households and the cost of fuel is a burden for the still largely road-based logistics sector.

We made the point that many of the people who bought diesel cars did so because they were doing the ‘environmentally-friendly thing’, so penalising them for their choice by selectively increasing the duty on diesel would be harsh treatment. At the same time, inflating showroom taxes on new diesels would surely be a disincentive for someone thinking of trading in for a newer, cleaner car.

Motoring might not be front-of-mind for a Chancellor with all the challenges of Brexit before him, but let’s hope he had an ear open for these arguments – we’ll soon know.

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