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Roads to Nowhere

Budget 'road fund' is anti-motorist - and anti-environment too

Stephen Joseph's picture
Driver in car

It must have seemed a good plan. Reform vehicle taxes so as to keep revenue coming in, and put that revenue (at least in England) into roads as a new "Road Fund". Motorists and Government backbenchers would welcome it as at last getting away from the supposed "war on the motorist". And motoring groups indeed initially rushed to welcome it - one tweeted that the Chancellor had "listened to motorists". Another thought that a new divide had opened up with cyclists, who won't pay "road tax" but will use the roads it pays for.

Read the small print - and with Budgets, the small print is what matters - and a different picture emerges. For a start, it's quite clear that the "Road Fund" will (in England anyway) only go to strategic roads - in other words, the 3% or so of English roads run by Highways England. The rest of the road network will have to rely as now on ordinary Government funding. 

This is part of a wider policy. In the last Parliament, there was a lot of work done on part privatising the motorways - but to make this work it was realised that a secure revenue stream would be needed. Lots of work was done on putting tolls on new roads, starting with the A14 Cambridge-Huntingdon upgrade, but the politics of that proved too toxic. With this new Road Fund, the job is done - and Highways England can be privatised, in whole or part, with a revenue stream against which the new private utility can borrow to build more roads. 

And building roads seems to be what the Chancellor is about. In his speech. he said that "four fifths of all journeys in this country are by road, yet we rank behind Puerto Rico and Namibia in the quality of our network. In the last 25 years, France has built more than two and a half thousand miles of motorway – and we’ve built just 300." He has pushed forward studies for a road tunnel under the Pennines and other new projects like an "Oxford-Cambridge expressway" ready for the Road Fund's start in 2021. 

However, the Chancellor's view is a minority one. All polls of motorists show that their overwhelming priority is to fix local roads, where there is a £12bn maintenance backlog. Big new motorways come way down the list, well below better public transport. 

And that's just with people identifying as "motorists". For the wider public, big new roads across the countryside are going to be deeply unpopular (see the protests against fracking in Lancashire, for example). If these come as local roads crumble, local bus services are cut and there's no money for local public transport, cycling or walking, the Chancellor's priorities are going to look even more out of line with those of the general public. "I pay road tax" could soon become a uniting cry for all local road users if the road tax doesn't help any of them. If the new roads are promoted by a privatised unaccountable Highways England, the politics will be even worse. 

There's also a devolution angle. Vehicle duty is being devolved to Wales, Scotland and Northern Ireland, and there's no requirement for them to spend it on strategic roads. With "Transport for the North" being placed on a statutory basis, should the North of England and other areas too have some say in where this money goes? Coming at a time when there's been a "pause" in electrifying and upgrading the rail lines across the Pennines, something of much higher priority to people in the North than trying to dig tunnels under the Peak District, this is going to be a big issue - and it's why we've launched a "pause roads not rail" campaign to get priorities changed. 

If the "Road Fund" side of this looks less economically and politically clever, the reforms to vehicle tax look clumsy and bad for UK plc. We initially welcomed them because they sounded like something we'd been pushing for - a "feebate scheme" where gas guzzlers would pay a high tax and subsidise low emission cars. But on inspection, the Chancellor's reforms achieve almost the opposite. Zero emission vehicles still pay nothing, but after the first year all cars except these  pay £140. Even once you factor in a £310 surcharge on cars worth over £40,000, high polluting cars will pay far less tax than at present. The UK motor industry has been vocal in saying that this will damage incentives to buy more fuel efficient cars, which it mostly produces.

All of this is before you get to the Chancellor's basic premise - that road building helps the economy. There are plenty of studies showing that this isn't the case - and that the wider costs of motoring and road building hurt the economy, society and the environment. Just for a start, when the cars on these new motorways get to the cities along the way, they'll simply run into bigger, wider traffic jams on crumbling local roads. That's hardly a way to help the economy. 

And then there's a bigger picture. The Government is at least nominally committed to meeting targets to cut greenhouse gas emissions and to contribute to EU targets to do this. The climate change conference in Paris in December is supposed to come to a worldwide agreement to cut emissions. At the same time, the Supreme Court is requiring the Government to come up by the end of the year with a strategy to cut air pollution. 

Taxation and spending could be used to help improve air quality in cities and tackle climate change. By cutting incentives for low emission vehicles and prioritising big roads (and other Budget measures like taxing renewable energy), the Chancellor is doing the opposite. He is signalling that he doesn't care about any of this, and that breathable air, liveable cities and the future of the planet are of no concern to him. That might win him points with some MPs in a future leadership election - it won't win him any friends among motorists, businesses or indeed anyone who happens to believe, along with the world's scientists, that global warming is real, serious, caused by human action and that Governments should do something to tackle the emissions that contribute to it.

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