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Cyclist and Palace of Westminster (copyright Simon MacMichael)Is chancellor George Osborne set to axe the Cycle to Work scheme?
Is Chancellor of the Exchequer George Osborne about to axe the Cycle to Work scheme? That’s the worrying rumour hitting the UK’s bike industry ahead of tomorrow’s Comprehensive Spending Review, already expected to offer little, if anything, for cycling in England.
– Cycling likely to suffer in government spending review
Paul Lewis, presenter of BBC Radio 4’s Moneybox programme, tweeted this morning that salary sacrifice schemes, the model used by the Cycle to Work scheme which allows employees to acquire a bicycle tax-free by effectively leasing it from their employer, may be scrapped.
He wrote: "Salary sacrifice ... may be targeted by Chancellor." Trade publication BikeBiz asked him whether the tweet was based on guesswork or if he had a concrete source, to which he replied: “We’ll see tomorrow!!”
As BikeBiz notes, it is widely anticipated that cycling will miss out in tomorrow’s review, with a source within the sustainable transport sector warning it earlier this month that the industry needed to “prepare for the worst.”
The source said: “There are no indications that active travel modes will get anything out of the Comprehensive Spending Review.
“The government believes major infrastructure projects will generate economic growth, and our arguments about health, the environment, the economic potential of cycling and how building more roads leads to more congestion have fallen on deaf ears.”
“Patrick McLoughlin [secretary of state for transport] has persuaded himself that ‘further and faster’ projects are the only transport interventions that can deliver economic growth so everything else can, and will, be ignored.”
In July, Sam Jones of national cyclists’ charity CTC told road.cc that cycling in England was approaching a “funding cliff” which would see money for infrastructure and other initiatives dry up.
Today, British Cycling policy advisor Chris Boardman repeated his call for the government to continue to provide money for cycling.
Writing in the Guardian, he said: “The chancellor is a busy man. The day before the results of his Comprehensive Spending Review, I doubt he is giving too much thought to cycling but if he did he would see the real opportunity it offers to boost the economy and lighten the load on the public purse.
“I am a cyclist but I am also a motorist. My family runs two cars and I drive about 25,000 miles every year. I’m not a fanatical advocate, I’m a realist who champions the cause of the bicycle because I believe in evidence. In fact the issue here is not about cyclists or cycling at all: it is about transport, health, pollution and the economy.”
The former world and Olympic champion pointed out that according to figures compiled by the government, “physical inactivity costs Britain £47bn a year – nearly £1bn a week,” while air pollution claims nearly 30,000 lives a year and congestion costs businesses billions.
“Cycling alone cannot solve all of these problems, but it can make a significant contribution in a way that offers outstanding value for money,” added Boardman, who recounted his recent trip to Copenhagen with transport minister Robert Goodwill.
– Video: Chris Boardman's 3 cycling lessons UK can take from Denmark
“The prime minister is committed to a ‘cycling revolution’ and supports our call for £10 per person, backed up by manifesto commitments,” Boardman went on. “He has a parliamentary majority, not that he needs it because there is clear cross-party support. The legislation to underpin long term investment has already been passed. He has seen evidence in other European capitals that prove investment works.”
Highlighting that businesses and the general public want to see money invested in cycling, he added: “I haven’t spoken to a single person who didn’t want their children to be able to ride to school - which 50% of kids in the Netherlands do - or live in a place with less traffic and pollution. And it can all happen for a modest amount of money - from funds that already exist.
“The chancellor can fix this and the spending review is his opportunity,” he concluded. “We know where the prime minister and parliament stand, we know what business and the public wants. If the chancellor delivers there will still be work to do, but after years of empty gestures and unfulfilled commitments, at least we’ll know where he stands.”
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.
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15 comments
Yep. And, in the end, they didn't cut it. But they are looking at it as they are concerned about salary sacrifice schemes. They are looking at the evidence. Which they will. Then ignore it and cut it.
If he scrapped salary sacrifice schemes completely then that would also include pension contributions and childcare vouchers. This would seem even less popular than his rejected plans for cutting tax credits. It would certainly make a mockery of the government's claims to be the party of the working person, and would undermine two key government policies at a stroke.
If he really scraps all salary sacrifice schemes the people he's htting are the people that voted for him. Middle working classes. As said above they'll be a massive pay cut for millions and this would affect the economy for sure.
Always knew if the Tories had a majority we'd go back to the old days of selling everything off and hitting those who bother to work. Short sighted economics.
Evans and Halfords will survive but i think it coud be the last nail in the coffin for many IBD's.
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I'm not sure this is material compared to other items run through salary sacrifice schemes so not likely Osborne has got it in for cyclists.
It's quite easy to tweak the rules to disallow other items. Cycle scheme is well established with concrete rules. Ditto childcare.
There are other regional ramifications as well. Without checking, given that the Welsh Government has not yet matched the English childcare provision, removing salary sacrifice for childcare will lead to many less well of families seeing a pay cut. Now, it's possible for the WG to match England's childcare approach but that isn't currently funded.
I've used it a number of times. And I cycle to work, practically every day, 20 miles each way.
It's hard to know how succesful it's been. Some quick googling shows 160,000 odd being sold this way in 2013.
Remember, if the success of this scheme costs peanuts, don't scrap it. If it costs money, consider it. But before you do, consider, if the figures above are right, how the cost to the economy is balanced out by growing the economy, business and job creation.
Let's be clear, IF this comes off today, there will be serious ramifications for Evans and Halfords, to name but a few.
I'll be honest here, creating tax incentives for people to buy bikes never seemed to me the best use of public funds compared to, you know, schools and hospitals etc.
But, and it's a big one, there's no reason to consider cycling infrastructure as different from other infrastructure when it comes to economic growth. The proportion of construction spend that stays in the economy is the same as for other modes and in urban areas getting people to cycle rather than drive can reduce the congestion impacts of development and hence enable growth.
We'll see but I suspect George likes big bangs not small interventions.
Hmm, perhaps you ought to think about who uses hospitals...
It's like any other incentive - to get people to change habits in a way that's beneficial to them and/or others. (There used to be a similar scheme regarding computer equipment, tho' that was axed some years ago - the intention was to increase tech takeup but I've no idea how effective it was.)
But you're missing the point - getting people cycling (that aren't already doing so, whether to work or otherwise) is going to increase people's fitness and reduce dependancy on the NHS, so for a modest loss in tax revenue you can have potentially large gains for the health service - stuff like diabetes and heart trouble, once present, are a long-running expenditure.
Now I'm quite sure that some of those using the scheme were existing cyclists or using it for n+1, but in a proportion of cases it would have been benefitting new cyclists, and not all of them with that much money to spare for a bike and kit - for many the 1000 quid limit is a lot of bike and kit.
Of course, some would undoubtable argue that the scheme should be 'policed' to ensure bikes are being used as intended, but that then puts extra burden on the employer, 'cos no-one else is gonna do it. In my old company they wouldn't even consider the scheme because of the 'hassle' regarding end-of-tax-year asset valuation (since is is effectively owned by the company).
That's pretty much what I used it for, but another way to look at it is that I've put money back into the economy by buying a new bike.
Well Boris will be upset. I hear he was eyeing up a Genesis Croix de Fer....
This scheme may have assisted some but there are few people I can see on the streets of London that use it by the number of second hand bikes.
Osbourne and his ilk couldn't give a toss about cycling projects because they don't offer an opportunity to wander around impressive building sites in a box fresh tabard and hard hat pointing at things and mixing with the navvies. They love that crap.
You mean Gideon doesnt give a crap because there;s no opportunity to take a back hander and make himself and his mates rich
I believe youll find it is also Labour economic policy to fund big ticket building projectslike hospitals, schools,ships,roads,trains etc etc to boost the economy, because it creates more jobs and generates more tax revenues.
but none of this speculation is any use till the actual spending review is published, I mean since when did someone journalists tweets count as being factual,and Ive said it before but Ill repeat it, the government spends so little already on cycling, cutting and I mean really cutting, not just freezing the increase in relation to inflation or lowering the rate of increase in spending, but actual cutting the square root of next to nothing, leaves you with next to nothing saved. you dont save hundreds of millions of pounds of money, by not spending £10.
That's the only change that really wouldn't bother me that much. As a way to target money to create commuters and utility cyclists, I don't think it has worked very well and there are better ways to spend it.
Unfortunately it looks like everything will be cut.