Discussion Paper Details

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Title: Transport policy for a post-Covid UK

Author(s): David M G Newbery

Publication Date: August 2020

Keyword(s): fuel taxes, infrastructure investment, Road pricing and transport policy

Programme Area(s): Public Economics

Abstract: Transport policy needs reform. Future Government investment and fiscal policy needs re-orienting to stimulate the economy after the Covid-19 lock-down. Prices used in project appraisal must include all external effects, committing to proper social cost-benefit analysis. In consequence, fuel duty rates need to be more than doubled as a prelude to proper road pricing. Transport investment needs to be increased even with proper road pricing and more allocated to walking and cycling, guided by benefit-cost ratios, following Eddington's recommendations. The paper gives five reasons for raising fuel duty rates, more on diesel than petrol, and estimates the desired levels.

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Bibliographic Reference

Newbery, D. 2020. 'Transport policy for a post-Covid UK'. London, Centre for Economic Policy Research.