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
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