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Faculty of Economics

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Newbery, D.

Transport policy for a post-Covid UK

CWPE2081

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.

Keywords: Transport policy, fuel taxes, road pricing, road investment

JEL Codes: D62 H23 R41 R48

Author links: David Newbery  

PDF: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe2081.pdf

EPRG Paper Link: 2024

Open Access Link: https://doi.org/10.17863/CAM.61842