When the Chancellor delivers his Budget next month and it comes to the thorny issue of the cost of motoring in general and the rate of fuel duty in particular we hope he will have read the latest set of official statistics from the ONS.
A set of numbers – previously unpublished but requested by the RAC Foundation – collected as part of the Living Costs and Food Survey show once again just how much money the poorest households are spending on buying and running a car.
The data suggests around 800,000 car-owning households spent at least 31% of their disposable incomes on buying and running a vehicle in 2012, the latest year for which official data is available.
In the previous year they spent 27%.
These very poorest families (with the lowest tenth of household incomes in the country) had a maximum weekly expenditure of £167.
Of this £167, £51.40 (31%) went on the purchase and operation of a car.
Of the £51.40:
- £16.40 was spent on petrol and diesel
- £9.50 on insurance
- £6.10 on repairs and servicing
Whichever way you cut it this puts them deep into transport poverty.
These figures are about as definitive as you can get. They give the official picture of the financial sacrifices being made by the UK’s poorest families to remain mobile.
They aren’t estimates of what people are spending. They aren’t models. They are the real world experience of people in the UK, collected as part of an authoritative survey of household outgoings.
It is of course true that these numbers are historical, in the sense that they relate to 2012. And since then there has been some marginal relief at the pumps and reported falls in insurance prices. But if you are spending almost a third of your disposable income on staying mobile then seeing prices retreat slightly from their highs – welcome though this is – will not radically alter your world.
Before Christmas the RAC Foundation detailed how record numbers of people now commute by car, including more than half of workers in the most deprived areas of the country, this data shows the cost of transport is a big hurdle to taking up employment.
For the poorest car owners there is unlikely to be much opportunity to reduce their motoring costs further. They will already be driving as little as they can and will have cut back on things like maintenance. Nor are they likely to be able to afford to swap their car for a newer model with better fuel economy and reliability.
Before tax we have some of the cheapest petrol and diesel prices in Europe but when you add in fuel duty and VAT the picture changes dramatically.
The Chancellor rightly points out that he has frozen fuel duty since March 2011 yet almost 60% of the pump price still goes into his pocket.
The chart below shows how the cost of motoring has changed over the past decade. While the prices of new and used cars have actually fallen, running costs have increased far faster than inflation. (To see an interactive version of this chart, click here.)
The Budget is scheduled for Wednesday 19th March. Given the data we have highlighted today the Chancellor is going to come under a lot of pressure from politicans and campaigning groups (like FairFuelUK) to go further than freezing fuel duty and actually cut it again.