A Spring Statement for White, Wealthy Drivers

A Spring Statement for WHITE WEALTHY DRIVERS

The Chancellor Rishi Sunak’s spring statement offered tax breaks to motorists – who are more likely to be white and on higher incomes, Sian Norris reports

The Chancellor Rishi Sunak’s spring statement delivered on the long-trailed 5p cut to fuel duty, a move the Government promised as one of three measures to ease the cost of living crisis. 

The cut takes effect from 6 pm on 23 March and will be in place for 12 months. It is a tax cut worth £5 billion – far less than the targeted support offered to struggling households. 

While the cut is a boon to drivers, it will fail to relieve the pressure from Britain’s most deprived households and disproportionately benefit white voters over black and minority ethnic voters.

It also undermines efforts to promote a green agenda, with cars being a major driver of air pollution and carbon emissions. 

Research published by the Government Office for Science in 2019 found that 40% of the lowest-income households do not own a car, with female headed households, older people, disabled people and black and minority ethnic people concentrated in this quintile. 

Data from the Office for National Statistics put the number slightly higher – with 45% of people in the lowest real income level with no car or van.

In London, the UK region where car ownership is lowest, data from Transport for London found that people on higher incomes were more likely to own a car. 83% of people earning more than £100,000 in London owned a car. Of the poorest households in the capital – those with an income less than £10,000 – only 29% had a car. 

In the lower income category – those earning less than £25,000 – 32% of car owners were white, while only 21% were black. 

Car ownership rates are higher outside of London. In Yorkshire and the Humber, where Sunak’s constituency is located, 44% of households have at least one car or van, and 34% have two or more vehicles. Outside of London, the region with the lowest ownership rates is the North East, where 29% of households do not own a car or van. 

While car ownership in London is low in part due to the good public transport links, low ownership levels in the North East may correlate with deprivation levels – the region has seen the steepest rise in child poverty between 2014-15 and 2019-20, from 26% to 37%.

---

Driver Dangers

Despite being less likely to own cars, people living in poverty are more likely to be exposed to the hazards caused by cars, such as high levels of air pollution and road traffic accidents.

This is because people located in disadvantaged areas tend to live in more hazardous environments, with greater proximity to fast-moving traffic and high levels of on-street parking. Children aged 11-15 years living in deprived urban areas are more often involved in traffic injuries than their peers living in wealthier urban areas. 

Black and minority ethnic pedestrians in the poorest neighbourhoods are three times more likely to be injured or die in traffic-related incidents compared to white pedestrians in wealthier areas.

In England, the most deprived 20% of neighbourhoods had higher air pollution than the least deprived neighbourhoods. The worst air pollution levels are found in ethnically diverse neighbourhoods. 

This means people living in poverty, and black and minority ethnic people are more at risk of asthma, respiratory diseases and complications during pregnancy as a result of car-related air pollution than their white and wealthier counterparts – despite being less likely to own a vehicle.

---

Cuts for the Poorest

While wealthier, car-owning voters make the most of the fuel duty cut, households on benefits will see real-term cuts to their incomes due to rises in inflation, at a time when energy and food costs are going up. 

Although benefits will rise by 3.1% in April, this is far below the expected inflation rise. Inflation was at 6.2% in February and is expected to reach highs of 8% in the coming weeks. 

The spring statement included an announcement to raise National Insurance thresholds by £3,000. This offsets the 1% National Insurance rise for those on the lowest incomes. But analysis from the Women’s Budget Group found that increasing benefits in line with inflation is a more progressive move to help the poorest households.

According to figures from the Child Poverty Action Group, families subject to the benefit cap will see the real value of their benefits fall by £1,840 per year in London and £1,600 outside the capital. 

On average, households with children will lose £235 per month. But for some the loss of income will be much greater: 15% of capped families are set to lose out on over £400 a month.

Department for Work and Pensions (DWP) data from November shows that 100,000 households were subject to the cap, which means that the total benefits low-earning or non-working claimants can receive is £23,000 in London and £20,000 in the rest of the UK. 

The cap was initially linked to the average wage when it was introduced in 2013. However, the cap was later lowered and now bears no relation to average earnings. 

The below-inflation rise follows the Chancellor’s decision in autumn 2021 to cut the £20 Universal Credit uplift, a measure brought in for new claimants to help those who lost income during the first 18 months of the Coronavirus pandemic. 

The cut meant 5.5 million families losing £1,040 from their annual income and risked pushing a further 500,000 people into poverty. The Government has reduced the Universal Credit taper rate from 63% to 55% and increased work allowances by £500 per annum from late 2021 – a change that means 1.7 million households will on average keep around an extra £1,000 on an annual basis.

The Chancellor announced in the spring statement that he would double the household support fund to £1 billion: money distributed to councils to “directly hold those who need it most”.