Discussion paper

DP15153 Transport policy for a post-Covid UK

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.


Newbery, D (2020), ‘DP15153 Transport policy for a post-Covid UK‘, CEPR Discussion Paper No. 15153. CEPR Press, Paris & London. https://cepr.org/publications/dp15153