Britain should lower speed limits for drivers as part of emergency measures to protect households from the impact of a new Iran war-driven energy shock, a leading thinktank has said.
“The UK cannot afford to sit back and let another energy shock drive up inflation and damage the economy,” said William Ellis, senior economist at the Institute for Public Policy Research (IPPR).
A newly released IPPR study argues that reducing fuel demand should be a central part of the UK’s response to volatile oil and gas prices.
The paper says around three-quarters of UK oil consumption is used in transport. It suggests that lower speed limits, alongside behavioural changes such as reduced car use, carpooling and increased home working, could help ease fuel demand and reduce inflationary pressure linked to energy costs.
What has been proposed?
Separately, the Green Party has proposed limiting all motorways to just 55mph and introducing 20mph speed limits in towns, similar to those suggested by the IPPR.
Other measures being considered include higher fuel duty and requiring drivers to retake their driving tests every five years.
Interesting questions remain about what measures the UK could take to cut down on fuel consumption to manage energy shocks, rising fuel costs and inflation.
The Bank of England has warned in its worst case scenario could peak at six per cent at the start of 2027.
Petrol prices have risen 16 per cent and diesel by 30 per cent since the start of the Iran war, which has threatened the UK’s oil supply, as well as putting pressure on motorists’ pockets.
The proposals came from a Green Party policy document, seen by the Daily Mail. Here is what it suggested:
Cutting speed limits to 55mph: This would apply on “major roads outside of built-up areas”, such as motorways, to “maximise the efficiency of fuel use as well as improving safety”. For urban areas, it proposed 20mph and on residential streets, it suggested: “speed reducing measures… effectively limiting speeds of vehicles to 10mph”.
Gradually increasing fuel duty: The document said increasing the tax on fuel would discourage car use and that the money raised could be put towards “redressing the negative environmental, social and health consequences of transport”.
Retaking driving tests every five years: As well as requiring regular testing, the document also proposed making the exam “more comprehensive and stricter” to ensure that drivers remained competent. It justified such measures by saying that “car driving is not a right but a privilege”.
Reducing car parking: The document suggested reducing car parking spots in urban areas and requiring people to pay to park outside their own homes, as “car parking is not a right that any driver has on the road”.
Key IPPR recommendations
Alongside behavioural changes such as lower speeds and reduced driving, the IPPR paper also sets out broader policy responses to energy shocks, including:
- Temporary price intervention mechanisms in extreme scenarios to limit inflation spikes
- Coordinated fiscal measures to reduce the economic impact of volatile energy prices
- Greater emphasis on demand reduction policies, particularly in transport
- Targeted support for households and businesses most exposed to energy price rises
- A recognition that monetary policy alone may be insufficient to manage supply-driven inflation shocks
The report argues that combining demand reduction with targeted fiscal tools could help reduce the need for higher interest rates and limit damage to growth.
What’s the argument for it?
Reducing your speed really can save money at the pump. The Driver and Vehicle Standards Agency (DVSA) suggests that driving at 70 mph uses about 15 per cent more fuel than at 50 mph over the same distance.
The AA recently advised drivers to cut down their speed to improve fuel efficiency in the wake of the Iranian oil crisis, which has caused the cost of petrol and diesel to spike.
AA President, Edmund King, said last week: “It is well worth drivers adapting their driving style and speed both to save money and enhance safety. We estimate that diesel drivers can save £10 per tank by changing their driving style.”
He also urged motorists to use fuel price comparison applications, warning that prices can vary by as much as 19p per litre between nearby forecourts.
The International Energy Agency has also called on governments worldwide to introduce lower speed limits as part of emergency measures.
Its executive director, Fatih Birol, described the current situation as “the greatest global energy security threat in history” and said governments needed to become “more vocal” about citizens cutting down on energy usage.
How much could you save?
Exactly how much you would save by driving slightly slower would depend heavily on the car you drive.
The DVSA estimates that cutting your speed from 70mph to 50mph saves you 15 per cent in fuel. That suggests that driving at 55mph would improve fuel efficiency by around 12 per cent.
If we take a typical UK hatchback, such as a Ford Focus or VW Golf, that achieves 45 miles per gallon (mpg) at a steady 55 mph, that efficiency likely drops to around 40 mpg at 70 mph.
At current UK petrol prices of around 157p per litre, this means you are spending roughly £2 extra for every 100 miles just to maintain the higher speed.
While slowing to 55 mph adds about 16 minutes to every hour of driving, it could potentially save a regular motorway commuter up to £160 a year in fuel costs.
The savings increase slightly for diesel cars. Because diesel currently costs significantly more than petrol – around 189p per litre at current prices.
For a diesel hatchback achieving 55 mpg at the slower speed, the same 12 per cent drop in efficiency would result in an extra £2.30 spent per 100 miles.
For a long-distance commuter covering 12,000 motorway miles annually, this adjustment would keep up to £280 more a year in their bank account.
What’s the catch?
Critics say the Green proposals go well beyond emergency fuel-saving and amount to a deliberate attempt to price people off the roads altogether.
Richard Holden, the shadow Transport Secretary, accused the Greens of an “outrageous, ideological assault on Britain’s motorists” that would “cripple commuters, damage the economy and make everyday journeys a misery.”
“This is a full-blown war on motorists,” he told The Daily Telegraph.
There are also questions about how seriously to take the document itself.
The Green Party’s own deputy leader, Rachel Millward, told BBC Radio 4’sToday programme she was unaware of the 55mph proposal, saying it was “certainly not one of our leading policies.”
A spokesperson for the party also told The Daily Telegraph that the policy document was now out of date and needed updating.
Is any of this likely to happen?
The Green Party is not currently expected to form government, which they would need to do to bring in the policies, but the party has risen in popularity in the last year.
A recent YouGov poll put the Greens on 19 per cent of the vote, putting them neck-and-neck with the Conservatives and just one point ahead of Labour. That poll put Reform in the lead on 23 per cent.
But, while the proposals are unlikely to become reality, they could increase pressure on the Government to do more to reduce fuel consumption as the Middle East conflict hits supply.
Government ministers have repeatedly rejected calls for motorists to conserve their fuel usage. Last month, Energy minister Michael Shanks urged people to “go about their business as normal,” stressing there is no shortage of fuel in the UK.
Chancellor Rachel Reeves also insisted last week that there was “no problem with supply” in the UK, telling ITV News that “the impact at the moment is a price impact”.