Travel costs: Are motorists better off than in 1997?

While Full Fact has tackled some of the myths around speed cameras here, here and here, what about the figures for the cost of driving for those who keep to the rules of the road?
Making a pitch for rail nationalisation this weekend, Labour leadership hopeful Diane Abbott argued that far from being under attack, motorists were getting away lightly in terms of costs.
Looking at the cost of driving compared to public transport, the Hackney MP used figures suggesting that recent years have seen plenty of love-bombing in the war on the motorist.
The Claim
In a piece for the Sunday Express, Ms Abbott claimed: “Since 1997 train fares have gone up by seven per cent but the cost of motoring has dropped by 13 per cent and the cost of domestic air fares has halved.”
After an inconclusive investigation into earlier claims by the left-wing MP, we took a closer look at the numbers…
Analysis
This time around there is far less doubt over the figures, and indeed they were reported in the Independent in May 2009. The numbers quoted in the paper are the same as those used by Ms Abbott.
Though the newspaper report talks vaguely of the ‘official figures’, the statistics come from the Department for Transport’s ‘Trends in Travel’ statistical series.
The most recent data available shows that the divergence is even more pronounced than that quoted by Diane Abbott.
The graph on page 10 of the report shows changes in the estimated cost of different modes of transport since the baseline year of 1997.
Rail fares were recorded as on average 13 per cent higher while bus fares were 24 per cent higher than they were in 1997. Motoring costs on the other hand nearly halved from their 1997 level.
With a car costing half as much to run as it did in 1997, the war on the motorist seems, in this sense at least, benign.
But this fall is almost completely accounted for by the declining cost of actually purchasing a vehicle. When this upfront cost is taken out of the picture, the day-to-day costs are actually up 25 per cent, since 1997 far more than the rise in rail fares.
A further breakdown of the data suggests that the only aspect of motoring costs to have fallen in real terms since 1998 is the purchase of a vehicle.
The picture is echoed by longer term data produced by the RAC, which in 2008 estimated that since 1988, the overall cost of running a car, including fuel costs, had fallen in real terms.
While there have been above inflation rises in the cost of petrol, the cost of purchasing and running a car both fell when increases in the Retail Price Index were taken into account.
Rail and bus fares, on the other hand, saw increases well above rises in inflation.
While not directly comparable with the official data, the twenty year comparison suggests rising fuel prices have led to the perception of increased costs for motorists.
Such rises have been caused by higher oil prices, exchange rate changes, and by significant increases in the rate of fuel duty.
Because of the proportion of running costs accounted for by petrol, and the visibility of such a cost, high pump prices have fuelled the perhaps erroneous impression of rising motoring costs, as an RAC spokesman explained.
“The cost of petrol is the main cost involved in running a car – it’s something in the region of 50 per cent of the overall cost, so spiralling fuel costs will have a big impact year on year,” he said.
We were told that because drivers see pump prices going up, sometimes a great deal in a short space of time, increases are much more tangible than savings from lower car prices, more reliable cars, greater fuel efficiency and so on.
“It’s a hard story to sell to people. They generally just see what they pay when they go and fill their car up,” he said.
Conclusion
While the figures used by Diane Abbott appear to be slightly out of date, the point made with them still checks out given that more recent data suggests, if anything, a greater divergence in costs.
Although rising fuel costs have seen the day-to-day cost of running a car increase by 25 per cent since 1997, the overall cost of car use has come down significantly.
As the RAC research shows, this is part of a wider trend, whereby purchase costs, and non-fuel running costs fell in real terms. However, due to tax hikes and oil price rises, the cost of petrol more than doubled in real terms.
So it seems that once the initial hit of buying a car is taken, car drivers have actually seen their costs rise as much, if not more, than public transport users.
But given that, for most people, purchasing a car is prerequisite to using it the comparisons made by Diane Abbot are valid.
Patrick Casey
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