Road selloffs and pricing

[LE Greys]

The Government has started to consider ideas for generating money to invest in the road network. One of these seems to be road privatisation. Various ideas have been floated, including shadow tolls paid by (presumably) the Highways Agency to road-owning companies. Others include tolling some roads and using that to cut fuel duty ( bad idea, put fuel duty up and abolish VED).

Not sure if privatisation is a good idea or not, but if it gives us continuous A1(M) from London to Newcastle or fixes the A14 problem, then I won't complain. Still, I'd rather see money from the roads pay for rail improvements, since the best way to deal with congestion is to get cars off the roads rather than building more. Demand will rise to meet capacity, just as it always does.

http://www.bbc.co.uk/news/uk-politics-17423693

<EDIT> They've said that there won't be any tolls on existing roads, but one MP went on the BBC lunchtime news and disagreed. That would almost certainly dump traffic from motorways onto parallel A-roads, what fun! :roll:

 

[Smethwickian]

Well, privatisation given us such a fabulous railway service, they could privatise the roads along similar lines.

Then drivers could enjoy the benefits of roads which compete and don't connect with each other, and tolls of byzantine complexity and eye-watering cost (unless you're prepared to book three months in advance to drive along a particular road within a precise five-minute window, of course.....)

If the roads are closed for maintenance, would the operator provide a road-replacement rail service, I wonder?

Seriously, if I understood comments about it on the radio, it seems to be more akin to giving some kind of long-term maintenance contract and freedom to carry out certain improvements or alterations, in return for an income from road and fuel taxes, against which the private firms can seek loan finance.

 

[jon0844]

Given how much money is needed to simply repair roads to an acceptable level, it's possibly a good thing.

As someone (I think from the RAC) said - at least it will mean some level of consistency going forward, rather than successive MPs or parties going from being pro-road to anti-road.

We all need roads, directly or indirectly, so I hope this is a positive move. As for taking money from the roads to fund rail, isn't that already the case? Motorists pay loads of money to central Government, so they're paying for rail, hospitals and - well - everything.

 

[Schnellzug]

Given how much money is needed to simply repair roads to an acceptable level, it's possibly a good thing.

As someone (I think from the RAC) said - at least it will mean some level of consistency going forward, rather than successive MPs or parties going from being pro-road to anti-road.

We all need roads, directly or indirectly, so I hope this is a positive move. As for taking money from the roads to fund rail, isn't that already the case? Motorists pay loads of money to central Government, so they're paying for rail, hospitals and - well - everything.

That's the thing. As with everything in the Uk, it's just disorganised. If what is still popularly known as the Road Fund Licence (although, I find, not officially so since 1936) went into a big pot labelled "reserved for road maintenance", same as revenue from the railways went back into paying for upkeep of the railways, rather than everything just being seen as a revenue earner for the Treasury (i.e. meaning, currently and for the foreseeable future, going towards this insatiable Deficit*), i think the world would be a better place.

*See, i never even mentioned the Olympics.

 

[BestWestern]

I guess the obvious question here would be how would the motorist be compensated if existing roads were tolled? Would VED be reduced or scrapped all together, or fuel duty lowered? Or would the cost of motoring just take another leap skyward as drivers had to pay again every time they used a M-way?!

Just building new roads and tolling them wouldn't seem a particularly profitable move for the Government, unless they paid the construction costs and then 'leased' them out I suppose. But then why not just keep them public and have the tolls collected by the state, as the income would clearly have to be enough to pay the Government and then make a profit on top if they stayed private. I suppose the state could simply demand a cut of toll payments from private road builders/operators, but that sounds a rather desperate way of raising income to me!

 

[LE Greys]

I guess the obvious question here would be how would the motorist be compensated if existing roads were tolled? Would VED be reduced or scrapped all together, or fuel duty lowered? Or would the cost of motoring just take another leap skyward as drivers had to pay again every time they used a M-way?!

Just building new roads and tolling them wouldn't seem a particularly profitable move for the Government, unless they paid the construction costs and then 'leased' them out I suppose. But then why not just keep them public and have the tolls collected by the state, as the income would clearly have to be enough to pay the Government and then make a profit on top if they stayed private. I suppose the state could simply demand a cut of toll payments from private road builders/operators, but that sounds a rather desperate way of raising income to me!

Nobody seems to know yet, possibly a cut in fuel duty. It seems that they've announced a half-formed (half-baked) policy before sorting it out. Tolls are unlikely to be a success if there is any way to avoid them, the M6(T) proves that. Possibly they want to announce something else and this is a bit of scaremongering beforehand.

 

[HSTEd]

I'm not sure how this works out cheaper for the taxpayer.

PRivate finance always costs more, and with gilt rates at long time lows this is just ideologically motivated stupidity.

 

[SS4]

I'm not sure how this works out cheaper for the taxpayer.

PRivate finance always costs more, and with gilt rates at long time lows this is just ideologically motivated stupidity.

Pretty much. But say that and you'll be labelled a deficit denier :roll:

 

[HSTEd]

Pretty much. But say that and you'll be labelled a deficit denier :roll:

And yet since the institutional investors, not being idiots, will see PFIs for road building as what they are...... government borrowing at inflated interest rates.
This weakens our fiscal position and pushes up bond rates.