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Lord Birt, the Labour government’s transport adviser apparently thinks
that we should build more roads, not just any old roads, but a new network of
toll motorways. Could he be right?
The usual anti-car groups
don’t think so. They say enough
of the country is already covered with tarmac, that roads encourage more people
to drive cars, that people should use bikes or trains instead, and anyway they
don’t want them in their back yard.
All the usual objections. Popular
sentiment is difficult to judge, but those people who talk to pollsters or join focus
groups generally claim to want to use buses, trains and bicycles more, and they
certainly think others should travel those ways. The chattering classes in the BBC and Guardian seem to be in
the grip of an anti-road mania, an almost religious belief that the masses
should not be driving. Most
importantly the government seems to be ignoring Lord Birt.
According to some experts it plans three times more investment in rail
than on roads. Even such
calculations fail to take into account local authority road expenditure this is
nowhere near the proportion of people and freight the two systems actually
carry. The problem is that whatever
people say they want, and that champagne socialists say is good for them, we
actually use roads far more than all the alternatives.
In 2000, roads carried 666 billion passenger km (93% of the total) and
158 billion tonne-km of freight (90%). Rail carried only 7% of passengers and
10% freight. Roads are also
getting more crowded. Not only does
Britain already have the most congested roads in Europe, but if you believe the
government’s own Commission for Integrated Transport things are set to get
much worse. The Transport Research
Laboratory suggests that if we go on as we are, journey times will increase by
85% by 2015. So how much spending is needed?
The Royal Automobile Club says that, just to keep congestion at today's
levels, investment will have to be increased five-fold and sustained at that
level for the next 30 years. Increasing
fuel duties sharply could do this. The
RAC says 6% a year over a 30-year period, which would eventually increase
motoring taxes fivefold, would do the trick.
David
Newbery, professor of economics at Cambridge, agrees about the need for
increased spending and has some interesting cost benefit calculations to support
his ideas. For example, the
M1, which has a current government investment value of £2.1 billion, generates
£1 billion a year in tax revenues. Even
ignoring benefits to the country as a whole, that’s a 40% annual return. Road
improvements also do well on cost-benefit analysis. Improvements to the M1 would
apparently generate benefits around 15 times the cost. Most road projects have
benefit-cost ratios of between two and four. The benefit-cost ratios of rail
upgrades do not come close. Even
the fantastically popular East Coast main line upgrade will only generate
benefits between one and two times the cost.
We can only speculate why the Strategic Rail Authority has kept quiet
about the cost-benefit figures of other major upgrades.
The West Coast main-line upgrade’s projected costs have tripled to more
than £7.5 billion over the past five years.
The £4.2 billion Channel Tunnel rail link, whose tangible benefits fall
so far short of its costs that the National Audit Office suggested that the
government must be rescuing it for reasons of national pride not economics. Nor is this imbalance just a
matter of money. Poor roads kill.
While seven people died in the rail crash at Potters Bar, ten people die
on the roads on an average day. The
latest rail safety proposals for advanced signalling are projected to save 83
lives over the next 40 years at a cost of £45m per life saved. That is l00
times the level at which road-safety improvements are implemented.
Nor is railway investment
likely to shift enough people to rail to make the lives saved that way economic.
The percentage of passengers carried by rail increased after
privatisation, but is unlikely to go on increasing dramatically, especially now
the government has effectively renationalised Railtrack.
Gradual decline has been the universal experience of nationalized
industries in the past, and the attempt by the government to avoid properly
compensating Railtrack shareholders will hardly encourage private investment.
Some argue that road users do
not pay the full marginal cost of their activities. Although all such figures are disputed, a recent study for
the Department of Transport “Surface Transport Costs and Charges” found that
revenues raised from roads amounted to only 36-50% of the marginal costs of road
use. Revenues from passenger
and freight rail services were pretty close to marginal costs.
A European Commission report “Revenues from Efficient Pricing”
calculated that the efficient price for cars and trucks in greater London was
three time current ones at peak periods and twice in off peak ones.
Rail prices were about right.
Choosing the right balance
between road and rail investment is hard, but allowing it to be driven by
short-term political considerations is clearly wrong. Ideally, we would never have nationalized the railways and
never covered the country in taxpayer-funded free-at-the-point-of-use roads.
But we did, and we have to start from here.
Lord Birt is showing us the
way. We should have more road
investment but the extra money should come from tolls.
Toll roads have two great advantages.
If properly priced they curb road use at peak times and in peak places,
and they demonstrate what people are prepared to pay.
Ideally we should introduce tolls on existing roads.
If that is politically impossible, introducing them on new roads to
counter government under-investment is surely the next best thing. Jim Thornton. 9 June 2002 David Newbery, professor of economics at Cambridge
click here Department of Transport
“Surface Transport Costs and Charges” Click here. European Commission report
“Revenues from Efficient Pricing” Click here. Commission for Integrated
Transport. Click here. The effect of rail
privatisation. Click here. |
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