2024 Budget impact on Rail

[12LDA28C]

I'm a motorist, I paid tax when I brought the car, I pay tax to use the roads, I pay tax on the fuel I put in it to get to work, where I pay tax on the money I earn...

You say you'd be happy to accept an increase, but where do we draw the line?

Seeing as I'm paying 60p a litre less than I was two years ago, I reckon I can afford to absorb a reasonable increase in fuel duty. There's no justification for the continued freeze whatsoever yet successive Chancellors seem to have been scared of motorists and don't want to upset them, whilst the Government simultaneously approves increases in regulated train fares every year. Does that seem fair to you?

 

[faltskog36abba]

Probably loosely related to the turn back sidings which are already committed.

Thank You.

 

[Grimsby town]

I can't say I'm happy about the freeze in fuel duty given the need to get moving on climate targets and encourage shifts to electric vehicles and other modes of transport. I get the inflation arguments but its not a given that the consumer would pay. When the 5p reduction in fuel duty was implemented a couple of years ago, very little savings were passed on to the fuel duty.

It now well over a decade of reducing car costs while public transport fares have continued to grow at above inflation levels. I just don't see that being sustainable long-term particularly when electric vehicles are going to steadily reduce the tax take. If a government can't tackle that issue at the start of a parliament with a huge majority, when can it tackle it?

 

[AndrewE]

I can't say I'm happy about the freeze in fuel duty given the need to get moving on climate targets and encourage shifts to electric vehicles and other modes of transport. I get the inflation arguments but its not a given that the consumer would pay. When the 5p reduction in fuel duty was implemented a couple of years ago, very little savings were passed on to the fuel duty.

It now well over a decade of reducing car costs while public transport fares have continued to grow at above inflation levels. I just don't see that being sustainable long-term particularly when electric vehicles are going to steadily reduce the tax take. If a government can't tackle that issue at the start of a parliament with a huge majority, when can it tackle it?

absolutely.
You would think they had never heard of Active Travel/Transport and the health (and other) benefits which follow on from people walking to the bus stop and then on to their destinations...
I wonder what the Health department think of the continuing feather-bedding of motorists?

 

[Grimsby town]

absolutely.
You would think they had never heard of Active Travel/Transport and the health (and other) benefits which follow on from people walking to the bus stop and then on to their destinations...
I wonder what the Health department think of the continuing feather-bedding of motorists?

Indeed at time when pressures need to be reduced on the NHS you'd think reducing air pollution, increasing physical activity, and reducing car related accidents would be a compeling argument.

I'm currently spending a lot of time in the US and Canada and the cost of public transport is so much cheaper than the UK despite the UK being a higher tax society, having a lower cost of living and lower wages, and the UK being far more suited to public transport. Unlimited travel by bus, metro, or tram in Porland, Oregon is 5 USD per day so less than £4. A bus or single zone metro fare in Vancouver, Canada is 2.60 CAD so less than £1.50.

 

[12LDA28C]

I'm currently spending a lot of time in the US and Canada and the cost of public transport is so much cheaper than the UK despite the UK being a higher tax society, having a lower cost of living and lower wages, and the UK being far more suited to public transport. Unlimited travel by bus, metro, or tram in Porland, Oregon is 5 USD per day so less than £4. A bus or single zone metro fare in Vancouver, Canada is 2.60 CAD so less than £1.50.

You fail to mention however that fuel is also considerably cheaper than the UK - I was in the US last week and paying less than $3 (£2.30) for a gallon of fuel which works out at around 60p per litre. Public transport would have to be pretty cheap to entice people out of their cars.

 

[Krokodil]

It is bad thing. Fuel duty has been frozen for years for no apparent reason other than increasing it is unpopular with motorists. I'm a motorist and would be perfectly happy to accept an increase in fuel duty if the money generated was spent wisely.

Not just frozen, it's been cut by 6p in nominal terms. It was 58.95p in 2011.

I'm a motorist, I paid tax when I brought the car, I pay tax to use the roads, I pay tax on the fuel I put in it to get to work, where I pay tax on the money I earn...

You say you'd be happy to accept an increase, but where do we draw the line?

You don't pay tax to use the roads, you pay tax to pollute them. Plenty of road users aren't liable for either VED or Fuel Duty.

Where to draw the line? Shall we start with reverting the various cuts in fuel duty which generally went straight into the pockets of the oil companies anyway? A token penny would have been something...

 

[Richard123]

We pay tax on almost everything, it is needed for our public services. Targetting it wisely supports government policy.

Taxing fuel is progressive; 50% of all fuel is used by the richest 10%, and road traffic brings environmental and social costs far exceeding tax and fuel price added together, because "externalities" are funded from general taxation. So even right wing economists generally support "polluter pays" taxation to achieve the most efficient outcome.

Yet the road lobby's stranglehold on government since they blockaded roads more than a decade ago has seen tax on fuel drop around 50% in real terms.

 

[CFRAIL]

Talk of railcards (disabled persons excluded) increasing by around £5, hardly seems significant when the average saving is around £156 annually I believe. Plus, they've been £30 per year for a significant period of time now.

 

[Grimsby town]

You fail to mention however that fuel is also considerably cheaper than the UK - I was in the US last week and paying less than $3 (£2.30) for a gallon of fuel which works out at around 60p per litre. Public transport would have to be pretty cheap to entice people out of their cars.

Was pushed for time but so couldn't add that point but I definitely acknowledge that. They need to discourage driving less than we do in the UK thanks to the space they have.

Still I get the feeling, in Canada at least, that driving isn't cheaper than public transport. In the UK it often is. I'd get the train more if it was cheaper but on journeys like Manchester to Durham, 2 people in a small car is far cheaper than 2 trains fares even with a railcard.

 

[yorksrob]

Even the Labour Party are pushing the line that rail users need to meet more of the costs of their travel after the money that has been spent over the last five years. The rhetoric hasn't really changed other than saying that reform and public ownership will be the solution.

It's sounding a bit tired now. I'm sick of hearing about the money spent on trains when we weren't allowed to travel.

The passengers are back - people need to travel for all sorts of reasons and Government should be facilitating that.

If the treasury hasn't got anything new to say four years after the pandemic, perhaps its due a clearout.

I agree that rail fares need to be kept down, but 'the great fuel duty giveaway bonanza' is not a bad thing. Road is the main means of transport, whether rail enthusiasts like it or not. If that is taxed even more than it is already, everything else that needs to be transported, such as food, goes up too.

Unfortunately there is a loss of opportunity to raise revenue - which has to be raised elsewhere (potentially puting up inflation elsewhere). That's bad news for those of us relying on the services where the price has to be inflated to cover it (such as rail passengers).

 

[Nicholas Lewis]

We pay tax on almost everything, it is needed for our public services. Targetting it wisely supports government policy.

Taxing fuel is progressive; 50% of all fuel is used by the richest 10%, and road traffic brings environmental and social costs far exceeding tax and fuel price added together, because "externalities" are funded from general taxation. So even right wing economists generally support "polluter pays" taxation to achieve the most efficient outcome.

Yet the road lobby's stranglehold on government since they blockaded roads more than a decade ago has seen tax on fuel drop around 50% in real terms.

Indeed i expected something new of this govt especially as they going all out to decarbonise electricity yet that is already less than 20% of UK greehouse gas emissions and the low hanging fruit has been taken there.

 

[brad465]

Rail fares might be going up more, but despite repeated increases many services are still very crowded, particularly on the expensive in-demand routes, whether commuter or intercity (or both). In a classic supply and demand approach, while cheaper rail fares would be great there needs to be a much greater capacity on the network to accommodate subsequent demand.

Unfortunately, short-termism, NIMBYs and lobbyists in competing sectors like motoring keep getting in the way.

 

[Bald Rick]

Yes but no increase in fuel duty. I assume they did not want to contribute to inflation.

Can’t remember off the top of my head - is fuel duty included in inflation stats whereas train tickets aren’t?

Yes both are in CPI, albeit fuel dity is captured in the price of petrol and diesel, both of which are in the CPi basket, and have a much greater weighting than rail fares because the population spends much more on them (around 7-8 times more IIRC).

I too am surprised about there not being an immediate reversal of the ‘temporary’ cut. That would have been inflationary though, and counterintuitively, the inflationary effect would be greater now that fuel prices are low. Also the lifting of the minimum wage and raising the employers NI contributions will both have quite an inflationary effect, particualrly through food, leisure, and eating out which between them represent about a third of CPI. So I guess that the Chancellor decided to delay the reversal of the fuel duty cut by a year until all that has fallen out of CPI the other end.

 

[yorksrob]

At least the there seems to be a commitment to continuing the service, even though there isn't all we'd like to see. This is no 1964.

 

[Class 170101]

Yes but no increase in fuel duty. I assume they did not want to contribute to inflation.

Still needs doing, As others have said there are climate targets to meet and arguably more important our planet to save. See Spain (also on BBC News at 10 tonight) and whats happening there right now.

In any event whether it is a petrol / diesel acr or an electric car it still takes up road space.

Road is the main means of transport, but of the direct user charges (VED, fuel duty) fuel duty has been falling in real terms for over a decade. So the subsidy from general taxation to roads is increasing steadily and benefits the heaviest users the most, whereas to public transport it is falling. Is that equitable? Is it compatible with CO2 reduction?

And I'd say no it is not compatible with CO2 reduction nor traffic rfeduction come to that.

It is showing a lack of joined up policy.

 

[Russel]

Seeing as I'm paying 60p a litre less than I was two years ago, I reckon I can afford to absorb a reasonable increase in fuel duty. There's no justification for the continued freeze whatsoever yet successive Chancellors seem to have been scared of motorists and don't want to upset them, whilst the Government simultaneously approves increases in regulated train fares every year. Does that seem fair to you?

No, it's not fare, but when 58% of journeys are made by car, compared to 2% by rail but with more public money being spent on rail, it's easy to see how the government have made the decisions they have.

Besides, even if fuel duty hasn't increased, other motoring expenses have certainly kept up with inflation.

 

[PGAT]

No, it's not fare, but when 58% of journeys are made by car, compared to 2% by rail but with more public money being spent on rail, it's easy to see how the government have made the decisions they have.

Besides, even if fuel duty hasn't increased, other motoring expenses have certainly kept up with inflation.

Exactly this. Also, from a political standpoint the “right move” is to freeze fuel duty because that fits in line with the rhetoric that working people will not have an increased tax burden

 

[12LDA28C]

No, it's not fare, but when 58% of journeys are made by car, compared to 2% by rail but with more public money being spent on rail, it's easy to see how the government have made the decisions they have.

Besides, even if fuel duty hasn't increased, other motoring expenses have certainly kept up with inflation.

In the light of the Government's alleged 'net zero' aspirations, it's not easy to see why they've made that decision at all. The only explanation is that they merely want to appease the motorist and care little about the average rail passenger. Again, there is no justification for not increasing fuel duty.

Exactly this. Also, from a political standpoint the “right move” is to freeze fuel duty because that fits in line with the rhetoric that working people will not have an increased tax burden

Is it the 'right move' to fit in with encouraging people to use their cars less in line with alleged 'net zero' aspirations?

 

[PGAT]

Is it the 'right move' to fit in with encouraging people to use their cars less in line with alleged 'net zero' aspirations?

It’s the “right move” regarding political brownie points. Let’s face it, people in general care more about the cost burden they face rather than the environment.

 

[mrmartin]

This thread thus far is massively missing the point taking about railcards. The entire transport capital funding budget has been cut by £300m in nominal terms in the budget. Given how badly rail and road construction costs are inflating (10%+ per year with no sign of slowing) this is game over for major improvements to the railway.

I suspect virtually no new rail projects will be approved over this parliament. Most of the capital budget will be spent by NR on major renewals and probably HS2/TRU/EWR overspends.

Combined with bringing TOCs into public ownership I suspect new rolling stock investment will massively slow down too.

This is actually a huge shock to me. I suspected with the fiscal rule changes they were going to invest heavily in transport but instead it is going to net zero for the most part.

 

[brad465]

This thread thus far is massively missing the point taking about railcards. The entire transport capital funding budget has been cut by £300m in nominal terms in the budget. Given how badly rail and road construction costs are inflating (10%+ per year with no sign of slowing) this is game over for major improvements to the railway.

I suspect virtually no new rail projects will be approved over this parliament. Most of the capital budget will be spent by NR on major renewals and probably HS2/TRU/EWR overspends.

Combined with bringing TOCs into public ownership I suspect new rolling stock investment will massively slow down too.

This is actually a huge shock to me. I suspected with the fiscal rule changes they were going to invest heavily in transport but instead it is going to net zero for the most part.

If they want to achieve even a quarter of their housebuilding target, they are going to have to invest in infrastructure, including rail and road (as well as other services), otherwise they are going to suffer politically from overstretched everything (including even more crowded trains and traffic jams).

If central government funding is tight, their best bet is probably going to be increasing partnership funding, i.e. getting property developers to contribute to the cost of certain projects where they will see a return (such as a new rail station/branch line opening providing access to the developments they're building). This is what happened with the Northern Line Battersea extension and appears to be a means to try and fund rebuilding Euston (correct me if I'm wrong here though).

 

[JonathanH]

Combined with bringing TOCs into public ownership I suspect new rolling stock investment will massively slow down too.

There was some lip service to a 'rolling stock strategy' in the press release.

 

[12LDA28C]

It’s the “right move” regarding political brownie points. Let’s face it, people in general care more about the cost burden they face rather than the environment.

Ah right of course, my mistake. Government policy is solely based on scoring 'brownie points' with the public, even if it appears to go against stated objectives and policies. Got it.

 

[mrmartin]

If they want to achieve even a quarter of their housebuilding target, they are going to have to invest in infrastructure, including rail and road (as well as other services), otherwise they are going to suffer politically from overstretched everything (including even more crowded trains and traffic jams).

If central government funding is tight, their best bet is probably going to be increasing partnership funding, i.e. getting property developers to contribute to the cost of certain projects where they will see a return (such as a new rail station/branch line opening providing access to the developments they're building). This is what happened with the Northern Line Battersea extension and appears to be a means to try and fund rebuilding Euston (correct me if I'm wrong here though).

Clearly they don't agree. A lot of government capital spending is going up - NHS going up 12% for example, but transport is being cut. I think fuel duty freeze, but rail and bus fares going up also points towards this government not really caring about public transport. It's a complete political decision to raise capital spending significantly in nearly all depts but give transport a cut. They definitely could have found some more money for transport given the fiscal rule changes (which tbh I thought would result in a very significant transport uplift!)

I suspect this government is going to be very similar to Tony Blair's labour on transport in his first couple of terms. Say a lot of stuff but not really fund/do that much. I think labour at their heart think of national infrastructure being really more about the NHS and education, not physical infrastructure of road and railways.

The bigger problem is road projects. We've already had A303 cut and now A1 dualling in Northumberland has also been cut today (they had completed all land acquisition for this!)

 

[yorksrob]

Exactly this. Also, from a political standpoint the “right move” is to freeze fuel duty because that fits in line with the rhetoric that working people will not have an increased tax burden

I'm sure I remember reading that we live in the era of "nudge" politics whereby small adjustments to policy result in people adjusting their way of life accordingly. In that context, one would expect some increases in fuel duty to encourage people to use fuel more efficiently. Instead, the state has effectively been telling people to "fill her up" for the past fifteen years.

It’s the “right move” regarding political brownie points. Let’s face it, people in general care more about the cost burden they face rather than the environment.

I certainly care about the cost burden, not that anyone in power takes any notice of my costs as a passenger.

There was some lip service to a 'rolling stock strategy' in the press release.

I don't see it amounting to much, all the while we're stuck paying exorbitant leasing fees for clapped out rolling stock. This will probably be the most destructive legacy of the privatisation experiment.

This thread thus far is massively missing the point taking about railcards. The entire transport capital funding budget has been cut by £300m in nominal terms in the budget. Given how badly rail and road construction costs are inflating (10%+ per year with no sign of slowing) this is game over for major improvements to the railway.

I suspect virtually no new rail projects will be approved over this parliament. Most of the capital budget will be spent by NR on major renewals and probably HS2/TRU/EWR overspends.

Combined with bringing TOCs into public ownership I suspect new rolling stock investment will massively slow down too.

This is actually a huge shock to me. I suspected with the fiscal rule changes they were going to invest heavily in transport but instead it is going to net zero for the most part.

I must admit, I'd pretty much given up on rail infrastructure spend during the last government.

It is a disappointment that some intention of rolling electrification wasn't announced - given recent climate events. I take your point though. In terms of transport, we seem to be back to Blairite mediocrity.

My main hope from this Government is that the proposed passenger watchdog is given some teeth, but we shall see what we shall see.

 

[Dave W]

There is no segment of society more mollycoddled than the private car owner. Taxes and duties suppressed whilst they fly up everywhere else. If you so much as try and introduce moderate increases in cost there rains down a storm of vitriol like no other. And woe betide you if you try and make life easier for others to their minor detriment. It's almost cult like.

Back to the rail (well light rail)... The news editor of Rail tweeted that the government has pledged to complete the Metro extension to Brierley Hill, but I couldn't see that in any of the documents - can someone point me in the right direction?

 

[deltic]

I must admit, I'd pretty much given up on rail infrastructure spend during the last government.

You mean the one that spent billions on HS2, EWR and Transpennine upgrade.

Given the horrendous cost and overruns of major rail infrastructure projects it's not surprising governments shy away from new projects.

 

[Adrian1980uk]

There is no segment of society more mollycoddled than the private car owner. Taxes and duties suppressed whilst they fly up everywhere else. If you so much as try and introduce moderate increases in cost there rains down a storm of vitriol like no other. And woe betide you if you try and make life easier for others to their minor detriment. It's almost cult like.

Back to the rail (well light rail)... The news editor of Rail tweeted that the government has pledged to complete the Metro extension to Brierley Hill, but I couldn't see that in any of the documents - can someone point me in the right direction?

Personally I think the motorist was over taxed up to 2005 ish but it's been brought back into line and perhaps over done now, we don't seem to be able to have a balance there.

Hopefully over coming years given the strong growth in passengers, we'll get to the point where rail won't be seen as a bottomless pit to poor money into, if current growth is maintained its probably £1 billion less subsidy every year. Good news for the government to say look what we're saving and hopefully it'll allow upgrades to existing infrastructure to enable continued growth.

 

[yorksrob]

You mean the one that spent billions on HS2, EWR and Transpennine upgrade.

Given the horrendous cost and overruns of major rail infrastructure projects it's not surprising governments shy away from new projects.

I thought they'd cut most of HS2.