Transport and the economy

Memorandum from the Road Haulage Association (RHA)

Key points

· There has been little change since Eddington

· Britain is open for business but transport underinvestment is a barrier

· Every year of delay in investment wastes many billions of pounds

· Road condition is becoming a major issue

· M6 Toll must be better used

1. Thank you for the opportunity to respond to your inquiry into transport and the economy. The Road Haulage Association represents 8,000 professional transport companies, which depend on the transport infrastructure to run their businesses and to deliver the services on which the UK economy relies.

2. Little has changed since Eddington identified a pressing need to increase investment in transport and in particular road investment, even though the returns to the economy per pound spent would be high. Since the credit crunch the pressing need for investment to assist UK economic recovery and to increase the attractiveness of the country as a place for companies to invest and for skilled individuals to work has become even more apparent and losses to the economy have increased as time has passed.

3. The Coalition has said that Britain is open for business. Supporting this assertion does not simply require competitive tax levels and labour market flexibility, it also requires the maintenance and improvement of the transport network in order to facilitate trade. The vast majority of goods transported, move by road in the UK and so if Britain is open for business this requires that the road network is fit for purpose.

4. The cost of road congestion runs to tens of billions of pounds a year, which, to put into context, is far greater than the cost of the UK’s independent nuclear deterrent. Every year we delay making investments, we lose a substantial sum of money wasted on congestion that we could have invested productively elsewhere.

5. Without adequate investment in roads, the commercial vehicles on which the economy depends are unable to function efficiently – congestion is analogous to a fault with a manufacturing or processing plant, except that the industry is unable to rectify the fault on its own and must look to government.

6. Investment in road capacity is required at national and local level, as is investment to improve to improve road conditions.

7. We are concerned that the full impact of road conditions may not be fully appreciated in government. For example RHA members have advised us of significant increases in their maintenance costs after the deterioration caused by the severe weather in January 2010, particularly in suspensions on larger trucks and tyres on lighter vehicles. Truck repair and maintenance contracts are sometimes already structured to take account of poor road conditions.

8. Extrapolating that across all 34 million road users, if even £100 in average cost per vehicle were to be added – which seems a very conservative figure – the hidden cost to the economy of failing to maintain the roads in an adequate conditions is at least £3.4 billion a year, simply in terms of vehicle maintenance bills.

9. Our members have no doubt that roads in poor condition are also more dangerous than those that are well-maintained. Road safety is also a cost linked to poor infrastructure condition.

10. The road haulage industry and other road users pay substantial sums of tax for the roads they use; it is a reasonable demand that they be maintained in an acceptable condition. Clearly transport secretary Philip Hammond believes that is important for budget reasons. We welcome Mr Hammond’s recent evidence to the committee, to the effect that roads must not be allowed to deteriorate to the extent that the cost of essential maintenance soars. However, the uncomfortable view of members is that many of our roads have already reached that point and are in desperate need of repair. We largely exclude roads maintained by the Highways Agency, which generally are maintained to an acceptable standard.

Specific issues

11. Every area of the country has road projects that it would prioritise. We highlight only a few initiatives, which would have strong support from the haulage industry and, we believe, all road users on the Midlands M6. Many road haulage operators regard the M6 Toll as a continuing national scandal, to which a remedy should be found. Now in its eighth year of operation, the M6 Toll has failed the economy, the environment and road users. It is woefully under-used, which congestion remains a serious issue on the Highways Agency’s M6.

12. We attach no blame to the operator or its parent company – but in any case we are more interested in finding a solution than in allocating blame.

13. The challenge for responsible government is to engineer and implement a solution, by which the congestion on the M6 is relieved by a more balanced traffic flow on the two roads. It cannot make sense, or be environmentally responsible, to have the M6 congestion while the parallel M6 remains little-used.

14. We advocate an experiment – for say, two months – by which the M6 Toll road is free to use for truck operators, with the operator recompensed through shadow tolling. The benefits in terms of relieved congestion could then be assessed.

15. Where innovative means of attracting new finance can be found – such as tolling/shadow tolling for roads, to fund new capacity, third Dartford Crossing etc, these options should be pursued.

16. Our concern is mostly with roads. We support rail investment, not least because it increases the choice of mode for motorists. The performance of rail in making best use of the available track capacity appears to compare unfavourably with that of road, however. Much has been made over the past 15-to-20 years of the ability of signalling and modern trains to increase throughput of a range of passenger services but relatively little has been achieved in practice. Meanwhile, the RAC Foundation has argued persuasively the case for prioritising road investment, in terms of economic and other benefits.

October 2010