Budget 2014: The chancellor’s misguided belief in the economic power of road building has not gone away

While statistics show economic growth, people’s day to day experience is of cuts to services, fare increases and deteriorating infrastructure.

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By Andrew Allen of the Campaign for Better Transport

The pressure was on the chancellor yesterday to craft a Budget showing austerity is paying dividends while offering much needed help with squeezed living standards. As one of the biggest outgoings for most households, transport is a touchstone issues is this regard.

However, the Budget offered little to reduce the day to day costs, focusing instead on expensive and ineffective road schemes that will take years to deliver. With people in general and motorists in particular overwhelmingly saying they want money spent on fixing local roads and investing in better public transport, the chancellor may have some way to go before he connects with public sentiment on this key issue.

Transport costs are high. Predictably, outlandish demands for a three pence per litre reduction in fuel duty costing £1.5bn did not feature in the chancellor’s statement. But nor did more affordable and effective measures to end the spiral of cuts to buses or make peak time train fares less expensive.

Buses have been hit hard by reductions in local authority budgets in recent years. Nearly half of local authorities reduced funding for buses last year, with many planning further steep cuts from April. Large authorities such as Worcestershire are planning to stop supporting buses altogether, something that would have a profound effect on vulnerable groups and those in low-paid professions who are significantly more likely to rely on buses.

The £30m tax break the chancellor is giving to bingo halls would surely have been better spent reversing all the planned cuts to bus services this year and beginning the process of divising a more sustainable model of funding for future years.

Trains did not warrant a mention in the Budget Statement, either.

This year, train users are benefiting from a one-year holiday from above inflation increases on the most popular fares. But even this measure leaves fares well-ahead of average wage rises and there is so far no sign that inflation busting fares won’t be back come January 2015. With large numbers of rail commuters in marginal constituencies around London, there is pressure on all the main parties to signal a fairer approach to ticketing in time for the next election.

The chancellor’s misguided belief in the economic power of road building has not gone away and big announcements on infrastructure are planned for this autumn. There should also be a special mention for the Mersey Gateway Bridge. The project has now been announced and re-announced in every Budget this Parliament. This time the controversial scheme turned up in order for the chancellor to confirm the project’s costs would need to be underwritten by the taxpayer.

There was a similar re-announcement of another damaging and wasteful project in the form of the M4 in South Wales. Here, the chancellor re-confirmed he is handing the power to raise the money for the environmentally damaging road building scheme to the Welsh Assembly.

There are more welcome initiatives in the Budget, too. Road users will benefit from an additional £200m that Local Authorities can bid to to tackle potholes. It should be noted that this is a drop in the ocean beside the £10bn backlog in local road repairs reported before this winter’s bad weather has even been taken into account.

Changes to the tax on business jets and company cars will help encourage moves toward more sustainable modes of transport. Air Passenger Duty on luxury business jets will rise to six times the standard rate of APD from April next year. The amount of tax employees pay on company cars used for personal use is also going up, although not until 2017-18.

In some ways, transport is symptomatic of the problems the chancellor, and more broadly the coalition, faces. While statistics show economic growth, people’s day to day experience is of cuts to services, fares increasing faster than wages and deteriorating infrastructure. Spending big on new roads will do nothing to change this image.

With just over a year to go until the next election, voters are looking for politicians to prioritise the things that matter to them. Never mind what big schemes are promised – if what people see in a year’s time is worse local roads and disappearing buses they will be tempted to punish the government at the polls.

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