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What does the Brexit vote mean for transport?

James MacColl's picture

The fall-out from the referendum is almost boundless. For transport, as most other policy areas, it will take years for the dust to properly settle. Here is our initial assessment of the scope of change and some of the questions we have about the future.

First, the immediate fall-out

A new Conservative leader is due to be selected by the beginning of September. Whoever that is, it will mean a Cabinet reshuffle with all the changes of priority and personnel that this entails. And a fresh General Election is mooted, at which point the entirety of government policy will be again open to debate and change pending the result.

The Chancellor has taken a direct interest in infrastructure planning. Were he to leave the role, what would it mean for the massive planned spending on the Strategic Roads Network, already under scrutiny because of its cost and huge individual and cumulative environmental impact, and other big projects such as HS2, which rely heavily on his support?

The Prime Minister indicated that the current legislative programme will as yet be unchanged. At least for now therefore the Bus Services Bill, which aims to give local authorities much more control over bus services, is unaffected. The hope was that the Bill could be passed in good time before the 2017 mayoral elections. It remains to be seen whether the turmoil at Westminster will slow this up.

And the decision on a new runway in the south-east of England, due in July, will surely be delayed again. Advocates of Heathrow expansion might fear a Boris Johnson-led Government as he opposed this when mayor of London, but could see withdrawal from the EU as a precursor to lower or selectively applied air quality rules, with currently law a serious impediment to not just airport expansion but some road building schemes too.

Most presently, however, with oil traded in US dollars, the fall in the value of the pound will push up the cost of petrol at the pump. In the short term, a price increase of 2-5p a litre has been suggested

If fuel prices stay at a higher level, a corresponding decrease in demand would hit the Government’s road building plans, which the Chancellor intends to fund through ring-fenced road taxation. However this would be a relatively small effect compared with the overall impact of an economic downturn that some analysts are predicting. The recession which started in 2007 showed how readily motoring is affected by the overall performance of the economy. That might be good news for the environment and public transport, as people cut out unnecessary journeys and look for better value alternatives to driving. It would not be good news for schemes and projects dependent on public investment. 

So what about the longer term?

With so much uncertainty, it is tempting to lose oneself in wild speculation. It is likely that upcoming political developments will put many policies and plans into flux. However there are a number of potential consequences of a changing relationship with the EU that we should consider.

Transport is an important beneficiary of the European Regional Development Fund (ERDF), which invests billions of pounds into local projects including those targeting reduced pollution and cleaner, more sustainable public transport. What now for projects like the £4 billion South Wales Metro and countless excellent smaller projects if one of their major funders is about to disappear? Brexit campaigners pledged they would fill the gap, but policy direction is at best in limbo. In the event of leaving the EU, we need a short-term policy of matching expected ERDF spending together with a revised funding model for the longer term to promote local sustainable transport.

The European Commission is currently pushing for much-needed CO2 emissions standards for Heavy Goods Vehicles, and is also committed to adopting distance-based lorry road user charging. Would these moves (which would help reduce emissions and result in HGVs paying for a larger share of their external costs) now be implemented here?

Also affecting transport would be whether the UK is involved in the Single Market in future, and to what level we abide by its rules. For example, how would passenger rail franchises work in the future? Would we adopt the Fourth Railway Package, which goes a long way to standardising how the franchising market should work? If we reject that, will the UK arms of German, French and Dutch state railways begin to withdraw from the UK railway, focusing instead on their operations within the EU?

For at least the next two years though, the UK will remain in the EU and party to existing legal commitments. The Client Earth court case challenging the UK's air quality plan, due in October, will be an early test of this.

Air quality is just one area of EU environmental legislation up for grabs over the coming years, with many green groups fearing a race to the bottom as 40 years of progress across land-use planning, habitats and species protection, air and water quality all comes under reconsideration. 

We must expect and demand that leaving the EU should result in environmental standards and protection at least as good as, if not better than, those we now have in the EU. We will make it clear that the referendum vote is not a mandate for reducing environmental standards and commitment to tackling climate change. Fortunately, there is agreement among a variety of civil society organisations to work to ensure these safeguards are protected and enhanced, so we will not be alone in advocating this message.

Whoever replaces David Cameron and the current Cabinet, a political narrative around addressing an economic and socially divided country will feature strongly in the months ahead. The vote for ‘leave’ was strong in communities which have seen fewer benefits from recent economic growth, and where decision making takes place more distantly. Transport is a part of this - many of these communities have seen cuts and fares rises on their bus services, and little investment in local transport generally. 

Giving local people more control is certainly part of the solution here, and commitment to it needs to be re-affirmed. It would be both tragic and ironic if the loss of their senior government advocates meant the energy and imagination devolution deals are beginning to foster was lost.

It will be years before we can hazard an answer at some of the questions raised by Brexit. At the moment, the implications of the referendum result seem by turns bewildering and concerning, but there are opportunities in the shifting politics too. Amid the economic uncertainty, refocusing transport strategy towards revenue funding, smaller local projects and improving everyday transport, like buses, walking and cycling, rather than big national capital projects would save money and help tackle social and economic divides. The challenge is to make this happen while ensuring that hard-won environmental safeguards are not lost or watered down but strengthened, and that burgeoning devolution grows as a central part of transport planning and delivery in the future.

Please support Campaign for Better Transport to help us work through these turbulent developments.

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