NEW ANALYSIS from the New Economics Foundation (NEF) finds that the UK chancellor’s decision to freeze fuel duty this year could lead to an increase in emissions equivalent to putting an extra two million cars on the road.

The analysis suggests that this policy could lead to emissions from road vehicles rising by up to 3.9 million tonnes of CO2 over the next year (a 3.9 per cent increase to total road emissions).

The analysis also finds that the fuel duty freeze disproportionately benefits the richest households.. This year, almost two-thirds of savings from the freeze (64 per cent, £2.2 billion) will go to the richest half of households, and just over a third of savings (36 per cent, £1.2 billion) will go to the poorest half. While the chancellor announced that households would save around £100 from the policy, the analysis finds that this hides discrepancies between households: the bottom 10 per cent of earners will save just £55 a year, while the top 10 per cent will save £155 – almost triple the amount.

Yesterday’s budget announcement makes 2023 the 13th year in a row that fuel duty has been frozen. The decision to freeze fuel duty and maintain last year’s 5p cut will cost the government just over £6 billion in lost tax income, making the freeze one of the most expensive items in this year’s budget. The £6 billion cost of the policy is close to the amount that the government will raise this year in carbon taxes (£6.2 billion) which, the NEF says, indicates a government willingness to penalise carbon pollution with one hand, while encouraging it with the other.

NEF analysis has found that, over the 13-year period of the fuel duty freeze, bus fares have risen 76 per cent, rail fares have risen 50 per cent, while petrol costs are only up 23 per cent. NEF argues that instead of spending a large amount on a policy which will lead to excessive carbon emissions, the chancellor should have invested in public and active transport to tackle the climate crisis. This month, the government quietly announced that it was planning to halve funding for walking and cycling projects from £710 million to £330 million.

Alex Chapman, senior researcher at the NEF, said: Freezing fuel duty for the 13th year in a row is going to provide little to no help to households struggling to make ends meet – and instead continues to put our efforts to cut dangerous carbon emissions in jeopardy. Wealthier households, who tend to drive bigger cars, and drive them further, are the biggest winners of this policy, meaning it is an incredibly inefficient way to spend £6 billion. People should be supported to use less fuel and reduce their emissions and pollution, not to consume even more.”

* Source: New Economics Foundation