Road Wars, Part II – Roads for sale?

Another Tory proposal, prior the current policy (I shall summarise the last half a week as: fuel protests! Ahhhh! Fill up you’re cars quickly, buy Jerry cans….but don’t panic!…keep calm and carry on…wait you are panicking! Ahhh! everyone panic!) was the idea of privatising the UK’s road network, announced by the PM last week. This would see private companies owning, maintaining and potentially building new roads (or adding lanes to existing roads) within the UK.

While the Jeremy Clarkson mob will whinge and moan about high petrol prices (again, what I call the Kevin and Perry defence, “petrol’s too expensive, its so unfair, I hate you!”) any meaningful study has consistently shown that when you add up the costs of building (about £100-200 Billion just to build the A-roads and motorways), maintain them, policing and provide emergency cover, it all costs much more than what motorists actually pay in road tax and petrol duty. And this does not factor in the costs of dangerous climate change nor the environmental damage caused by tailpipe emissions, or the unhealthy lifestyles that come with a car based culture, nor the costs of maintaining access to foreign oil supplies. Further the true cost of motoring is currently falling, contrary to popular believe (although I suspect the source I’m referencing has not adjusted for recent rises in oil prices).

Either way, this idea of the taxpayer constantly being required to subsidise drivers to a truly excessive level is not to the liking of either environmentalists nor indeed many of the fiscal conservative wing of the Tory party. They both favour policies such as road pricing or that all new roads (and even a few existing ones) should be tolled in future, restoring the cost balance and making motorists pay something a little closer to the true costs of motoring. Of course, experts reckon that road pricing would bring up motoring costs to about 20-40p per mile in rural areas, and about £1 or so in urban areas, about 2 to 5 times more than what motorists currently pay (in terms of road tax and petrol duty, but not including other costs such as the fuel itself, insurance, depreciation, etc. as these are ones personal costs of running a car and nothing to do with the state). Thus while such a policy would allow for the ditching of petrol duty and road tax, motorists would be hit with a massive hike in their costs, which will not be to the liking of many car driving Tories.

Hence, Cameron is thus in a bit of bind here, stuck between two competing ideologies within his own party, nevermind the pressure from the the Lib dems. On the one hand some want motorists to pay a fair amount of what it costs the state to run the roads, and in particular they want no new money allocated for new major road building projects (i.e. such enterprises must be self financing with the money recovered directly in some way from the drivers who use it). And with the UK’s population expanding and rising railway costs forcing people back onto the roads, some pretty big road and bridge building projects are inevitably going to have to be taken forward soon. But on the other hand, the Tory’s know better than to tangle with the all powerful road lobby.

Indeed, take a look at the comments page to the beeb article I posted earlier. I noted that it hit 1,500 messages, mostly negative within a few hours. After the PM’s announcement you had members of the AA and RAC lining up to go onto the morning news programs warning of Armageddon (or is that carmageddon!). We even had a polemic piece by Robert Peston about China winding up owning Britain’s roads.

The recent flap over the petrol tanker strikes should hammer home to you the power of the motoring lobby. The Tories recently provoked mass panic buying of petrol through a combination of out-of-touch dithering, a desire to distract from the recent dinner 4 donors scandal, but also a desire to avoid a repeat of the year 2000 protests. This say Blair’s poll ratings fall to the level that if there had been election immediately afterwards, the Tories would have won a clear majority (something they failed to do in 2010).

So the government needs to tread carefully here. But is it the right policy they are pursuing? I would argue no. The privatisation of the UK’s railways, power and water companies, has clearly shown that all you end up doing is increasing the costs of such services, not decreasing them and decreasing reliability. And ultimately as it’s essential that the country has semi-decent public transport (or water, or power) many of these supposedly private companies quickly learn that they are essentially too important to fail and can rely on the government riding to the rescue with cash for this and that, eliminating the moral hazard that is essential to any “private” competitive industry. Consequently I suspect this Tory policy would likely just increase the costs of running the UK’s highway’s not decrease it.

Now, not being that keen on cars myself, I could be unkind and give this policy my whole hearted support, secretly hoping it would fail, cause the cost of motoring to soar forcing many more motorists out of their cars (cutting carbon emissions) and onto public transport (increasing the viability of public transport by pushing up usage rates) but that wouldn’t be very honest. No, we need a road’s policy that is fit for purpose and currently, as Nick Robinson points out here, privatisation is not something the UK public seem keen on these days.

Firstly, the initial pilot plan by the Tories is for the roads to be leased to private companies with any revenue raised coming directly from taxpayers (i.e. for the interim no new tolls) and loans to finance the improvements coming from banks. And how will that improve anything? Already most road building in the UK is handled by private building contractors, the only bit of the process that is “socialised” is the issue of paying off these companies (i.e. via taxation), which the very bit the government proposes to keep! Also I doubt any corporation can get a loan off of a bank for a lower rate of interest that the Treasury can….unless there’s some really bad news in the pipeline the Tories are trying to hid from us!

Also a system mixing publicly owned motorways and private toll roads won’t work, people will just drive around them. Casing point, take the M6 toll bypass around Birmingham. How many reading this have actually used it? rather than taking the extra time to drive through Brommie and save yourself 6 quid. It defeats the purpose of building a bypass if it sits underused while its bumper to bumper in the city centre.

Solutions?
I would throw in my two cents by arguing that firstly the roads should remain in public ownership. If privatised, it would have to be all or nothing, or some sort of hybrid (like the Autoroutes in France) with all the motorways tolled, no exceptions.

A better idea would be some accounting. In this letter we’re supposed to be getting from Osborne setting out what our taxes are spent on, how about a column which totals the true cost of motoring (i.e. road building, maintenance and finance costs by both parliament and councils, the policing costs, NHS costs, emergency cover costs, economic costs of road accidents, etc). This would shut most of the road lobby up and soften them up for the next step.

I’ve long argued for a carbon tax, as this would link consumption of many things (including petrol) directly to what the smarmy wee Bullingdon boy in No. 11 takes you for. The polluter pays, as the expression goes. It would also allow the relaxation of petrol duty, while at the same time encourage the deployment of electric cars and alternative fuelled vehicles.

I would also advocate a policy of road pricing over road tax. Again, this links usage of the roads to what one pays. However, I would include a sliding price scale set on the basis of individual income. This would link ones ability to pay to what it costs you to drive. Consequently a tradesman of limited means who has to drive (because it’s a little inconvenient to carry all his tools on public transport) will not pay an excessive amount, while a millionaire who chooses to drive into London each day in his Chelsea tractor because he doesn’t want to rub shoulders with commoners, will pay through the nose for the privilege.

Even environmentalists need to accept that the road network is an important part of the national infrastructure. But equally, those on the right need to accept that somebody has to pay for it. And increasingly, whichever party you support, that’s going to have to be those who use the roads.

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