Cycling and the economy
Briefing
Cycling and cyclists make a significant contribution to the economy
Thursday, 11 August 2016
Cycling and the economy
Policy Key Facts
- If cycle use increases from less than 2% of all journeys (current levels) to 10% by 2025 and 25% by 2050, the cumulative benefits would be worth £248bn between 2015 and 2050 for England - yielding annual benefits in 2050 worth £42bn in today’s money.
- In 2009, production losses due to mortality and morbidity associated with CVD (cardio vascular disease) cost the UK over £6bn, with around 21% of this due to death and 13% due to illness in those of working age. Physical activities, like cycling, help combat CVD.
- Occasional, regular and frequent cyclists contributed a ‘gross cycling product’ of c£3bn to the British economy in 2010. Around 3.6 million cycles (‘units’) are sold in GB each year.
- The average economic benefit-to-cost ratio of investing in cycling & walking schemes is 13:1.
- Academics who studied the cost benefit analysis used by Copenhagen to decide whether to build new cycling infrastructure, concluded that cars cost society and private individuals six times more than cycling.
- The Cycle to Work Scheme generates at least £72m a year in economic benefits for the UK economy and employers through improved physical fitness and associated health benefits.
- On average, cycle commuting employees take one less sick day p.a. than non-cyclists and save the UK economy almost £83m.
- Although cyclists may spend less than car-borne shoppers per trip, their total expenditure is on average greater because they tend to visit the shops more often.
- On 9th Avenue (Manhattan), where a high quality cycle lane was rebuilt in late 2008, retail sales increased by up to 49%, compared to 3% borough-wide.
- Together, mountain biking and leisure cycle tourism contribute between £236.2m and £358m p.a. to the Scottish economy, with a cumulative gross value added of £129m.
Cycling UK View
- The economic benefits of investing in small scale projects that typically benefit cycling are often underestimated. On the other hand, car-dependence is a significant cost for society and large scale transport projects (e.g. roads) are not the value-for-money they are often thought to be.
- Cycling makes a positive contribution to the national economy and it is a cost-effective investment. It can help:
- Reduce congestion;
- Improve public health and save NHS money;
- Create jobs;
- Save employers money and improve productivity;
- Inject money directly into the economy via the cycle trade;
- Boost the vitality of town centres;
- Deliver goods efficiently;
- Lift house prices.
- The Treasury should incentivise cycling through:
- Adhering to the principle that 'the polluter pays' as the basis of taxation of transport users;
- Maintaining a tax-free mileage rate that makes cycling on business financially worthwhile;
- Supporting cycle commuting schemes that save businesses and employees tax (e.g. the ‘salary sacrifice’ Cycle to Work scheme);
- Reducing VAT on cycle repairs and cycles;
- Maintaining its policy of not taxing cycles for the use of the roads.
- Both national and local authorities should dedicate sufficient resources to smarter choices, recognising that they rely on revenue rather than capital funding.
- Economics-focused bodies such as Local Enterprise Partnerships (LEPs), regeneration agencies, developers and retailers should recognise the value of cycling and take action to promote and encourage it.
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