9 March 2016
On Wednesday 16 March George Osborne will deliver his Budget. Here, Campaign for Better Transport outlines what are likely to be the key transport issues.
Road building and air pollution
Infrastructure spending continues to define George Osborne's tenure as Chancellor. However, this is set against growing concern about air pollution, which is now implicated in 40,000 premature deaths in the UK every year, with transport a main contributor. The Supreme Court ruled in April 2015 that the Government was in breach of EU air pollution limits and needed to take immediate action to comply. Despite the Department for Environment, Food & Rural Affairs’ subsequent Air Quality Plan, environmental lawyers ClientEarth announced their intention to consider further legal action because of its limited progress in enabling compliance with legal pollution limits. Meanwhile, the cost of driving is now at its lowest level since 1997.
What to expect
The roads network has been one of the main recipients of infrastructure spending and with planning of a second Road Investment Strategy underway, and the interim findings of the new National Infrastructure Commission due to be announced alongside the Budget, the flow of big projects looks set to continue.
To tackle this there are a range of fiscal tools open to the Chancellor which would reduce air pollution and fund more sustainable alternatives. These include:
- Increasing fuel duty, specifically on diesel
- Raising company car tax to promote green vehicles and raise money to support public transport, walking and cycling.
Management of the rail network
The Chancellor has overseen major investment in the rail network, but this has been dogged by problems of cost overruns and delays to major projects resulting in three reviews of Network Rail's operations and planning, the last of which (the Shaw Review) will report alongside the Budget.
What to expect
It is likely the Chancellor will use the Budget to announce changes to the network operator, including moves to remove at least part of its £25 billion debts from the public balance sheet. The Shaw Review will suggest options for doing this, including:
- Franchise-based working alliances between Network Rail and train operators
- Integrating management of the tracks with train services
- Establish a new rail industry planning body to oversee infrastructure projects, with Network Rail remaining as the system operator and retaining functions like timetable planning.
Other rail announcements which may form part of the Budget include:
- Sale of rail assets potentially including the major mainline stations currently owned by Network Rail along with other assets such as rail depots
- Measures to increase on-track competition with more 'open access' operators (like Grand Central and Hull Trains) allowed to run services, in line with recommendations made by the Competition and Markets Authority (CMA).
Campaign for Better Transport continues to oppose the break up and privatisation of Network Rail. Such a move would further fragment the railways, be controversial and unpopular with passengers, and weaken accountability. Instead, the railways need closer working alliances between train operators, Network Rail and new devolved structures with the shared aim of growing passenger numbers and improving satisfaction.
English devolution and transport
The recently published Northern Transport Strategy recognised that 'efficient and affordable public transport' is the key to economic growth in the north of England, but the strategy also contains potential conflict by continuing to support major road building, with initial studies of the A66 and A69, rather than public transport investment and making better use of existing roads.
What to expect
The devolution of more powers from Whitehall to city regions and combined authorities is likely to be one of the Chancellor's 'good news' stories. With the Cities and Devolution Act having received Royal Ascent, Osborne is likely to announce progress with 'devo deals', potentially including Liverpool City Region, North East, Tees Valley, Sheffield City Region, West Midlands, Derbyshire-Nottinghamshire (North Midlands), Cornwall and the Eastern Powerhouse (Cambridge, Norfolk and Suffolk).
Campaign for Better Transport strongly supports devolution of transport powers. Advantages include multi-year budgets to improve planning and the option of de facto re-regulation of buses in the forthcoming Buses Bill, something already identified as an opportunity by rural areas, such as Cornwall, as well as in cities. There will also be options for revenue raising powers such as control of business rates, road congestion charging, work place parking levies (as already used in Nottingham) and a tourism tax. These would offer long term funding to support investment in services.
Campaign for Better Transport has spokespeople available for comment, for further information please contact James MacColl on 020 7566 6493 / 07984 773 468 or firstname.lastname@example.org
Notes to Editors
1. Campaign for Better Transport is the UK's leading authority on sustainable transport. We champion transport solutions that improve people's lives and reduce environmental damage. Our campaigns push innovative, practical policies at local and national levels. Campaign for Better Transport Charitable Trust is a registered charity (1101929).
2. The National Infrastructure Commission is chaired by former Labour Transport Minister Andrew Adonis and will make initial recommendations concerning Thames crossings in London and transport priorities for the North of England, including the highly controversial trans-Pennine road tunnel.
3. Air pollution death rate from the Royal Colleges of Physicians and of Paediatrics and Child Health report, Every breath we take: The lifelong impact of air pollution. You can read the full report here.