Expert Blog

The big transport news came after the Budget

The theme of last week’s Budget? If anything, it was the same as December’s Autumn Statement, only with the volume turned down. As then, George Osborne clearly had one eye on what might be called the ‘White Van Vote’. But, this time, he didn’t have so much to give them. It was probably the most low-key Budget of his entire Chancellorship.

The policies that Mr Osborne did announce in favour of white van drivers (and other motorists) can be contained within a paragraph or two. He returned, as he has so often during this Parliament, to fuel duty: holding off a 0.54 pence-a-litre rise that was planned for September. And he also announced that the toll for crossing the Severn Bridge will be abolished from 2018. Both are policies that will benefit people’s pocketbooks.

Beyond that, the move to raise the tax-free personal allowance to £11,000 by 2017 will no doubt be welcomed by many, as will the overdue death of the tax return. But these are general policies for the general population. There was nothing at all like the £15 billion road-building scheme that Mr Osborne announced alongside the Autumn Statement. Motorists were looked after in this Budget, but not exactly doted upon.

It’s easy to understand why. For starters, it’s not every Budget that the Chancellor can push £15 billion towards Britain’s roads. He already did that in the Autumn Statement. He can’t easily do it again.

And, for seconds, Mr Osborne was trying to walk a difficult line ahead of the General Election. As we pointed out in our preview of the Budget, he faced a stark political choice. Would he stuff the Budget full of sweeteners and giveaways to appeal for our votes, but risk appearing opportunistic? Or would he stick to the cause of deficit reduction above all else, but risk seeming too sombre? In the end, as we predicted, he chose some of both – but more of the latter. Even some on the Chancellor’s own side were left saying that this was a ‘boring’ Budget. 

Mr Osborne was certainly in a sombre mood when he decided on the rates of taxation for company cars. We already knew that BIK rates for most cars would increase by 2 percentage points a year from 2016-17 to 2018-19, but now we know the figures for 2019-20 too – and, sadly, they are not pretty. The tax on most company cars will be hiked by 3 percentage points in that year. And while it was also revealed that BIK rates for low emission vehicles will increase at a slower rate than previously feared, they’re still increasing. As usual, the Chancellor appears to see company cars as a quick source of revenue.

But at least he’s spending some of that revenue wisely. The last of the Budget’s major motoring announcements was an extra £100 million for ‘enhancing the development of driverless car technology’. This sum may pale beside the £billions featured elsewhere in Mr Osborne’s Red Book, but it’s an encouraging sign that politicians are taking these developments in motoring seriously. They’d be stupid not too, given how much change could be wrought by autonomous cars.   

And… well, that was it for the Budget. But it’s not the end of this Government’s transport policy. In fact, the bigger news may have come at the end of last week, with the publication of a new strategy to improve roads and railways in the north of England. Among its proposals: new high-speed rail connections between the cities of the north; a new road tunnel through the Peak District; Oyster-style travel cards across the area; and so on. 

But more significant than these individual measures is the general sense of it all. The Coalition is keen to devolve power and responsibility away from Westminster and towards the regions. If individual areas do end up gaining more control over their individual transport policies, then we may see a greater variance of measures. Some may go for rail, whereas others go for road pricing. Some may choose to research driverless technology, whilst others cherish the bicycle. The future could be all a mix.

Provided we get to that future, of course. What’s strange about this Budget, and with anything that this Government now says, is that it’s all up in the air. With a General Election approaching, and with the potential for another round of coalition negotiations afterwards, these policies could all be rewritten in a matter of weeks. They say that nothing is certain but death and taxes – but even taxes aren’t totally certain right now.        

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