Petrol prices hit low earners

Even though the price of petrol has come down, the cost of filling the tank still has a significant impact the pockets of less well-off drivers. Access to a car and the benefits it can bring are becoming much more important in social policy according to Professor Stephen Glaister, Director of the Royal Automobile Club Foundation speaking at a conference on transport and social exclusion in Birmingham today (11).

Professor Glaister will explain that the poorest households have experienced the most rapid growth in car ownership over recent years. Just like everyone else, low-income earners need to get to health centres and hospitals, shops, schools and work. Public transport can be costly and time consuming and as cars have become cheaper they have become as attractive to low earners as the better off.

Whilst the price of road fuel remains an important factor for the majority of UK households, Glaister will state that poorer households are particularly hard hit because they travel just as much as their richer neighbours. This causes problems for social policy, particularly in rural locations where there are fewer public transport alternatives.

Professor Glaister will highlight that car travel is often considered to be the preserve of the wealthy, when in fact 60% of rail travel is completed by the top two income groups. He will also reveal that lower income groups spend a similar proportion of their weekly income as high earners on operating personal transport.

Glaister will describe how taxes on the use of cars have grown in relation to taxes on ownership and that this relationship maybe reversed in the future if further fuel duty increases become politically difficult. If there is instead a policy of increasing the Vehicle Excise Duty (VED) on larger cars, this could be socially regressive, as those on lower incomes are less able to purchase the newer vehicles with lower emissions.

Stephen Glaister, Director of the Royal Automobile Club Foundation says; 'Fuel should not be priced as a luxury as car travel is essential for accessibility regardless of income. All income groups rely on roads for over 92% of their travel. People travel more as they get wealthier, but cars are now the most important form of transport for each and every income group. Fuel prices are becoming much more important in social policy. It is important that overall motoring policy and tax rates are set with this in mind.'