Transport and the Economy - Transport Committee Contents


Written evidence from National Alliance Against Tolls (TE 24)

SUMMARY

  • A good system of roads is part of a successful economy.
  • Drivers are paying for such a system many times over, but the taxes are largely spent elsewhere.
  • Any expenditure on improvements to the system should not be at the expense of failing to maintain what we now have.
  • Drivers would be more likely to have smooth journeys if all main roads were the responsibility of the Highways Agency.
  • Any increase in taxes on roads use will be unfair and unpopular, but if they have to be increased then the best way is through fuel duty.
  • Any improvements to the existing roads should not require drivers having to pay some form of tolls.

INTRODUCTION

1.  The Committee are conducting an inquiry into transport and the economy, particularly in the context of spending cuts, and have invited interested parties to submit evidence.

2.  This is the submission of the National Alliance Against Tolls which is a loose alliance formed in 2004 by local groups protesting against tolls in England, Scotland and Wales. We don't have a formal organisation as a company, charity or anything else, and we do not seek funds from anyone or any organisation. Our opposition to tolls covers euphemisms such as "road user charges" and "congestion charges".

3.  Our submission includes an annex on the possibility that the Government may be considering cutting net spending by increasing taxes on roads users and/or using some form of tolls to pay for any new roads capacity.

THE UK'S ECONOMIC CONDITIONS AND THE RELATIONSHIP BETWEEN TRANSPORT SPENDING AND UK ECONOMIC GROWTH

4.  It is evident that the economic outlook is worse than before the banking crisis. It is also evident that the Government intends to make substantial reductions in net public spending. Individuals and organisations who use a public service, or receive a subsidy or who benefit from any tax allowance will be arguing that they are a special case and should be exempted from any action to reduce net spending.

5.  In our view, roads really are a special case as a good system of roads is essential for the movement of people, raw materials and goods. Other services and other forms of transport may be very important but most of the population could survive without them. Without any roads, the country would virtually be back in the Stone Age.

6.  Spending on maintenance and improvement of roads is already inadequate. Life goes on because traffic is a bit like water, in that if a particular route is inadequate it will try and take another course. Though a major problem with roads is that alternative courses are frequently blocked by the authorities, thus causing increased congestion on the allowed routes. And these allowed routes are themselves narrowing due to the effects of spending on measures which seem to be designed to discourage and slow traffic rather than to ease its flow.

7.  It seems that those who make the decisions to deter road traffic have no conception that this traffic is part of the economy and that if you stifle it, then you will eventually kill the goose that has been laying the golden eggs for you.

8.  There is already a vast difference between the taxes levied on roads users and the amount of money that is spent on roads. The NAAT submitted evidence on this to the Committee's Inquiry into "Taxes and charges on road users", the report of which was published in July 2009. Depending on what was included, our figure for taxes ranged from 40 to 57 billion pounds a year, whereas spending on roads was between 5 and 9 billion pounds. Any further widening of this gulf between roads taxes and roads spending will be counter productive. If drivers stop using the roads there will be less income from them and if they switch to public transport there will be a need for bigger public spending, particularly if capacity is increased.

THE TYPE OF TRANSPORT SPENDING WHICH BEST SUPPORTS ECONOMIC GROWTH

9.  The best type of transport spending from an economic point of view will be that which removes bottlenecks and eases congestion at the lowest cost. This is not necessarily spending on increased capacity to and within congested areas such as London. It might be better to improve infrastructure elsewhere in order to attract people and businesses to less congested locations. The spending, wherever it is, is not necessarily on transport infrastucture, you might for instance subsidise bus operators to lower their fares or increase frequency of services or you might reduce the need to travel at busy times.

10.  Another way of looking at this, particularly when there are financing difficulties, is to see which schemes have the shortest payback period. in terms of generating economic benefits for the country. Schemes which are more likely to have a short payback period are small road schemes designed to remove bottlenecks, rather than large scale schemes whether they be on roads or other parts of the transport infrastructure.

BALANCE BETWEEN REVENUE AND CAPITAL EXPENDITURE

11.  To a large extent the benefits that we all enjoy come from the countless generations that have preceded us. This is a completely free benefit for society as a whole, though there may be money transfers for some part of this. Arguably we owe a moral debt to previous generations not to squander our inheritance but to add to it. But adding to it does not mean letting what we already have decay while you build new roads or whatever. As a general rule it is bad housekeeping to fail to repair and maintain an asset, unless the intention is to scrap the asset in the near future.

12.  Expenditure is usually classed as capital where there is something tangible created whose benefits will be with you for a long period of time. "Capital" expenditure largely uses the same resources in terms of labour, plant and materials as does "revenue" expenditure. But in a capitalist economy, this capital expenditure may be financed by some form of loan which may be paid back over many years. A capital scheme does not necessarily result in an asset that will produce net benefits, as there could be a liability that results in ongoing costs which are greater than the benefits. An example of this could be a tram scheme, that might require an operating subsidy.

PLANNING IN THE ABSENCE OF REGIONAL BODIES

13.  Many people don't want traffic in the particular locality where they live. They want measures to restrict traffic, slow it down and ideally divert it to anywhere other than their own "back yard".

14.  But most people, including those who oppose traffic in their own area, have a different viewpoint when they are wearing the hat of a driver trying to get from A to B. In this case they want to have as smooth, safe, cheap and as fast as possible journey. They do not share the concerns of people in the area that they are merely passing through.

15.  It is the views of local residents that seem to dominate in local authorities. As the membership of regional bodies is usually dominated by representatives from local authorities, these bodies may give little importance to having an adequate roads system.

16.  To some extent the aims of both local residents and those passing through could be met by segregating traffic from the areas that it is passing through. This would cost a lot of money, but drivers are already paying far more than would be needed for a massive increase in the provision of facilities such as bypasses around towns and villages and tunnels under city centres. Unfortunately, that money is not being spent on the roads and it is unlikely that this will change.

17.  Whatever is spent on improving and maintaining the main road system, it would be better if the management of all roads that carried significant amounts of non local traffic was put under an expanded Highways Agency (which covers England). There would be a potential for economies of scale, even if part of the maintenance function was still carried out by local authorities or local firms. But more importantly what is spent could be spent on improving the highway system and reducing congestion.

OTHER ISSUE

18.   The elephant in the room is the possibility of the Government deciding to reduce net spending by increasing taxes on roads users and/or using some form of tolls to pay for any increase in roads capacity — building new roads or river crossings or adding lanes to existing roads. We have added an annex on this.

ANNEX to NAAT submission on Transport and the Economy —

Increasing taxes on roads users and / or using some form of tolls to pay for any increase in roads capacity

INCREASING TAXES ON ROADS USERS

19.  Taxes on roads use are already too high. But if it is decided that they will be increased anyway, we would remind the Committee that though most roads users feel that fuel duty is excessive they believe that it is the fairest method of charging for roads use. Fuel duty is also one of the cheapest taxes of all to collect as it is assessed at the refineries. Other taxes such as vehicle excise duty are expensive to collect and subject to wide evasion.

20.  Vehicle excise duty is also unfair as it takes no account of miles travelled and takes little account of the amount of fuel used, and thus of the amount of exhaust gases. Smaller engine cars do carry a lower rate of duty but as the Committee will realise a car with a big engine might travel a lot less miles in a year than one with a smaller engine and thus produce less exhaust gases. The Committee may also be aware that a car which is driven aggressively or in heavy traffic will consume a lot more fuel than a car which is driven more carefully and in light traffic. These variations in fuel used and exhaust gases can only be reflected through a duty on fuel and not on vehicles.

CHARGING FURTHER TOLLS TO TRAVEL ON EXISTING ROADS

21.  The Government may be considering adding some form of tolls on some existing roads. If this is in the context of reducing net spending, then the assumption is that either these tolls would be an additional tax, or that any reduction in other taxes would be less than the net income generated from the new tolls.

22.  Those who propose such systems usually turn a blind eye to the cost of setting up and administering the systems. Drivers are given the false impression that all the income would be used to offset other roads taxes or that if overall taxes did increase then this increase would all go to something like improvements in public transport.

23.  The reality is that tolls are very expensive to collect, and a massive amount would have to be collected just to break even.

24.  In 2003 Alistair Darling commissioned a "Feasibility study of road pricing in the UK" which was carried out by Deloitte and published in 2004. The study included an estimate of the costs, Deloitte said that it was very difficult to estimate, but that at 2004 prices, a national scheme would cost between 10 and 62 billion pounds to implement, with annual running costs of up to five billion pounds on top of that.

25.  Based on the experience of other Government IT based schemes it would be reasonable to assume that the higher Deloitte estimate is more realistic, but if a mid figure of 36 billion is taken and if that is spread over say ten years, then the amortised cost is about five billion pounds a year, when the running costs are added, this gives a total figure of 10 billion pounds a year at 2004 prices. UK road vehicles use about 47 billion litres of fuel a year, so this annual cost is about the same as adding another 21.3 pence tax a litre to the cost of fuel. At 2010 prices that is about 25 pence a litre tax just to break even, the Government would not net anything at all.

26.  We would also point out that not only are tolls so unpopular that other names for them have been invented, they also have the effect of reducing road capacity and increasing congestion and accidents at the points at which tolls are collected. Retrofitting any form of toll collection on roads would be somewhere between very difficult and impossible. There would be disruption to traffic during the construction phase and if there were traditional toll barriers, and if the system ever became operational, the resulting queues would be so bad that there could be total gridlock.

27.  There is currently some discussion about using a barrierless system at the Dartford crossing to reduce the congestion that has been suffered by drivers over many years because of the tolls. The Committee should be aware that barrierless systems require a massive backup system to try and enforce toll collection. The nearest example of such a system in Britain as the moment is the London "Congestion charge". The cost of collecting and enforcing that works out at about five pounds per vehicle day. Even if that cost was somehow halved, then the annual cost for Britain's vehicles would be about 20 billion pounds a year, which is even higher than the top estimate produced by Deloitte in 2004.

USING SOME FORM OF TOLLS TO PAY FOR ANYINCREASE IN ROADS CAPACITY

28.  Given the vast amount of other taxes on roads use there is no justification for existing tolls let alone adding to them. Yet that is what various groups have been proposing. The increased capacity that has been proposed for tolling includes new roads and river crossings and added lanes on existing roads.

TOLLING NEW ROADS

29.  The peak in motorway construction was around 1970. When the 27 miles of the M6 Toll opened at the end of 2003, it was the longest new road for nearly 18 years. Some people including the Prime Minister apparently think that this road has been a success and is a model for the way in which any new roads should now be built.

30.  The amount of traffic that the concessionaires, Midland Expressway Ltd (MEL), were expecting is not known but the road has failed to make the contribution that it could have made in relieving congestion not just on the old M6 but in the region.

31.  Traffic on the old M6 was running at about 175 thousand vehicles a day. At one stage the traffic on the new road reached about 55,000 vehicles a day, but is now at about 40 to 45,000 vehicles a day. That may seem a lot, but that volume means that a modern motorway appears to be empty. It is obvious that most of the traffic that could be using the road is avoiding it because of the tolls, and the class of vehicle that is avoiding it the most is HGVs who are still using the old M6 and various non motorway roads west of Birmingham.

32.  This under use of the new road is not only bad for the people who live in the West Midlands and the economy, it is also bad for the owners. MEL is part of Maquarie Atlas roads, but still publishes separate accounts in Britain. The last set of accounts available are those for the year up to 30 June 2009. At that point the company had negative capital of 13 million pounds and appears to be wholly reliant on financial support from a parent company.

33.  The M6Toll is not unique in having financial difficulties. Various other tolled operations have had difficulties due to drivers avoiding them, including the Southern Connector in South Carolina which filed for section 11 bankruptcy in June, the South Bay Expressway in California filed for section 11 bankruptcy in March, and the Lane Cove Tunnel at Sydney which went into receivership in January.

34.  It is most unlikely that a private company will build another tolled road in Britain unless it receives help from the authorities. That help could be in the form of loans or guarantees or subsidies or by making sure that drivers are given little choice on whether to use the road.

TOLLING NEW CROSSINGS

35.  There is one tolled new crossing which is already in the pipeline. This is a proposal for a new bridge over the Mersey. The scheme was the subject of a major public inquiry in 2009, but the inspector's report has not been published. The principal objector at the inquiry was an alliance of Friends of the Earth and the North West "Activists Roundtable" of the Campaign for Better Transport, who were opposed to the principle of a new crossing. Other objectors were mainly either concerned about the tolling or about the routing of the traffic.

36.  The plan is to not only toll the proposed crossing but to also toll the existing free crossing. On the opening day of the Inquiry, the Leader of the Council explained on the BBC that - "The two bridges will be so close together that to have one bridge free and the other bridge charged would be a waste of money as people would not use the new bridge and everyone would try and trundle across the present bridge".

37.  It has been claimed that the new crossing will be a major economic boost over a very wide area and create thousands of permanent jobs. As we told the Inquiry this is implausible. Improved infrastructure is usually an economic benefit but tolling will have a negative effect, as was reflected in the official traffic projections, which forecast that when the new bridge was opened and both bridges tolled, the traffic would actually fall below the current levels with only one bridge.

38.  As part of the economic case for the new bridge it was stated that Halton was the 77th worst out of 354 local authorities on the Indices of Social Deprivation. Down river from the new bridge are Liverpool and Wirral which are joined by the tolled Mersey Tunnels. Those authorities are the 2nd and 8th worst on the Employment indicator. We suggested to the Inquiry that this seemed to imply that tolled crossings were not a boost to an economy.

TOLLING LANES ADDED TO EXISTING ROADS

39.   The idea for such lanes seems to have started in America. Initially the lanes were "HOV" (High Occupancy Vehicle) intended for cars that were relatively full. As with other lanes that are reserved for a particular category, the HOV lanes were a waste of road space. So many of these lanes have become "HOT" (High Occupancy Toll) lanes, and allow drivers without passengers to use the lanes if they pay a toll. The most recent development of all is the building of lanes which were intended from the start to be toll lanes.

40.  Tolled lanes in America are sometimes referred to as "Lexus" lanes, as the users of them are mainly the relatively well off. Though some of those who have suggested similar schemes in Britain have implied that poorer drivers were more likely to use the lanes. The Times had pushed the idea of these tolls on 7 October, 2006. The then Tory Shadow Roads Minister told them that the poor would be more likely to use the tolls as "The rich have the time to rearrange their lives more easily whereas the poor are less able to get off work early and may have more time constraints on childcare."

41.  Whether the Shadow Roads Minister was correct or not in his prediction that the poor would be the main users of tolled lanes, the NAAT view is that it is unfair to charge any driver extra for something that they are already paying many times over for through fuel duty and other taxes.

42.  There are two other problems with tolled lanes. One is that as with the M6Toll it is probable that the added road capacity will be underused. The other problem is accidents. Having some lanes tolled and others not, adds to the problems of drivers changing lanes.

September 2010


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2011
Prepared 2 March 2011