Cycling and the economy

Cherry Allan's picture
Cycling in town
Cycling and cyclists make a significant contribution to the economy
Headline Messages: 
  • Our excessive dependence on motorised road transport imposes significant economic costs on society. These include: congestion; road casualties; physical inactivity and the ill health caused by it (e.g. obesity); pollution (and the associated damage to buildings, ecosystems, agriculture and health); as well as the geopolitical costs of maintaining fossil fuel supplies in an increasingly unstable global environment.
  • Cycling could substantially reduce these risks, while strengthening local economies in both urban and rural areas; supporting local businesses and property values; boosting the economic productivity of a healthy and satisfied workforce; and enabling disadvantaged groups to gain skills and access employment opportunities.
  • Local and national government, businesses and economic regeneration partnerships are therefore well advised to invest more heavily in promoting cycling; whilst the tax system should offer greater support.
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.
  • 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.
CTC View (formal statement of CTC's policy): 
  • 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;
    • Working with the European Union on changes to the VAT Directive that would encourage cycling (e.g. zero-rating 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.
Download full campaigns briefing: 
Publication Date: 
May 2015
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