The Budget and Transport


The second Budget of 2010 had surprisingly little to say about transport. The Chancellor made no changes to vehicle or fuel excise duties but will ask the Office for Budget Responsibility to undertake an assessment of the effect of oil price fluctuations on the public finances and then based on this examine options for the design of a fair fuel stabiliser whereby fuel excise duty would rise and fall to partly compensate for large fluctuations in market fuel prices.  He is also considering the case for introducing a fuel duty discount in remote rural areas, including possible pilot schemes in Scotland. The increase in VAT from 17.5% to 20% will however increase the price of fuel.

Road user charging for HGVs that had been floated as a possible revenue raiser was a dog that did not bark.

Whilst departmental budgets are to be cut by 25% capital spending is to be protected. Increasing the length of rail franchises will provide a major cost saving to DfT as this is where the bulk of its consultancy spending goes and this proposal is out to consulatation.

The government has already announced the sell off of High Speed 1 and in the Budget the sale of the remaining 49% it owns of the air traffic controllers NATS will also put forward. In terms of switching air passenger duty from a per person to a per plane basis this will be subject to review and further consultation.

So all in all a surprisingly quiet budget on the transport front.

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One thought on “The Budget and Transport

  1. There were only four major transport schemes announced in the budget:

    – The upgrade of the Tyne & Wear Metro;

    – The extension of the Manchester Metrolink;

    – The redevelopment of Birmingham New Street station;

    – And improvements to the rail lines to Sheffield and between Liverpool and Leeds.

    So the rest are all up for grabs…

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