The 2012 Budget: Motoring into Recovery

Posted on March 21, 2012

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All who read British newspapers will have noted fevered speculation over potential measures that may appear in today’s Budget. The suggestion that Britain’s road network of Britain be opened to private investment has attracted much interest. The idea that the Government might lease key routes, such as the M1, to private corporations. These would be liable for repairs, and proponents of the scheme hope that investment would be made in improvement, perhaps through innovative traffic-management technology such as is currently used on the M42 and M25 motorways. The companies who take up leases would have the right to charge motorists for use of the roads in question.

The Government might also agree to a contract whereby the private companies involved are paid for registered usage. The Prime Minister, in an speech on Monday, stated that UK road infrastructure does not have capacity even for present use and is limiting economic growth. Involvement by the private sector is thought by some to offer the best available solution.

 The second suggestion emulates in part the model of privatisation used for British Rail. Blog for all Seasons has commented in the past on rail privatisation: ‘Some things are not private, local, or even regional concerns, but are of concern to the entire nation, and are vital for the protection of the common good’. The road network fits this description. Free and effective movement, enabling people to visit family and travel for work, should not be treated merely as a commodity. 

One privately run motorway alreadly exists, namely the M6 toll which runs alongside an existing major road. If, however, as appears to be now envisaged, the method of private-sector involvement were merely to emulate that of the rail network the result would not generally be two side-by-side roads. Private companies would have monopoly control of what was, and should remain, a public good.

The Fair Fuel campaign has also obtained much press coverage of late. Drivers cannot but have noticed the high price of fuel. The cost of drilling and refinement is less per litre than the added tax. In modern society most people have little option but to drive. The Government should lower fuel duty which is stifling economic growth and  socially unjust. The cost of filling a car is the same for a low-paid care-home assistant and for a wealthy property developer. It is a tax that is not paid in proportion to income, so should not be set at a level punitive for low earners. The Government has no control over global oil prices, but in periods when these are high and the economy depressed fuel duty should be reduced for affordability.

High fuel costs have a knock-on effect on prices of consumer goods and therefore on consumer spending. The Government is rightly worried about the almost non-existent growth in the economy. The economic gain to be anticipated from lower prices and enhanced disposable income would help drive growth, and such a measure would also be socially just measure.

The Government can take action to get the economy motoring again while taking a socially progressive line.


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