Infrastructure Bill [HL]

Viscount Hanworth Excerpts

Wednesday 18th June 2014 Lords Chamber

[Viscount Hanworth (Lab)]

My Lords, I wish to question the Minister about the intentions that underlie the parts of the Infrastructure Bill that relate to our highways. However, at the outset, I will discuss the opinions of economists regarding the rules that should govern our access to highways.

One of the first people to think systematically about the economics of highways was the 19th-century French engineer and economist, Jules Dupuit, who considered the effects of imposing a toll on travellers for their passage over a bridge. He observed that if the toll were fixed with the object of maximising revenues, it would be liable to discourage the use of the bridge, thereby reducing its utility. Therefore, in most cases, the passage should be free.

The manner in which tariffs and tolls can diminish the utility of a capital investment is well illustrated by British experience. The case in point is the M6 toll road, which skirts the Birmingham conurbation and is the one UK example of a tolled motorway. It was opened in 2003 and is operated by Midlands Expressway Ltd—owned by Macquarie—which holds the concession until 2054. By all accounts, the road is underused; as regards HGVs, it appears that the overwhelming majority have chosen to remain on the congested M6 road. As a result, the maintenance costs faced by the Highways Agency for the M6 are disproportionately high.

However, there is a lacuna in Dupuit’s analysis, which concerns the costs of congestion. When road traffic has been slowed through congestion, any vehicle that is added to the stream exacerbates the problem. Not only does it bear its own direct costs, it can also add greatly to the costs of others by worsening the congestion. Those are its externalised costs. If the vehicle could be made to bear its externalised costs as well as its own direct costs, it might be deterred from adding to the congestion. British experience also serves to illustrate that point. There are two other significant cases of direct charges for road use: the bridge at the Dartford crossing and the Severn Bridge, which carries the M4 motorway. The congestion on both bridges is often so severe that it has been argued that a heightened toll should be imposed at the times of day when the bridges become all but impassable.

It must be conceded that, far from being governed by economic logic, the building and the administration of trunk roads and major highways is greatly influenced by social and political ideology. Thus, the autobahns in Germany and the autostrade in Italy, which were built in the period between the two World Wars, were intended to be seen as expressions of the purposiveness of the respective fascist regimes. In Britain there was no such motive and the programme of motorway building began much later, in the late 1950s, when it was overseen by the Conservative Minister of Transport, Ernest Marples.

Very little has been done in recent years to extend or upgrade Britain’s system of trunk roads and highways. The UK road network is one of the most heavily congested among the OECD countries. An OECD report of 2011-12 placed the UK in 26th position for the quality of its roads, which was towards the bottom of the list of developed countries. It has been doubted whether, nowadays, the Department for Transport has the skills to oversee the major investment projects in roads that seem to be required.

In those circumstances, the Government are making their proposals in the Infrastructure Bill to reform the management of our strategic highways. They propose to transform the Highways Agency into a government-owned company that would operate independently of the Department for Transport. The Government propose that the planning horizon of the Highways Company should be lengthened, and have declared an earnest commitment to provide stable long-term funding to support a road investment strategy.

The provisions of the Infrastructure Bill are best described as enabling legislation that will provide the framework for subsequent developments. They give us few indications of what, if anything, might materialise from a new approach to the management of the strategic road network. For further enlightenment, one might look to the document Action for Roads, which was issued by the Department for Transport in July 2013 and is full of hopes and good intentions. However, it needs to be assessed also on what it fails to mention and its major lacunae.

The document extols the new technologies that should enable information on the state of the traffic to be provided to drivers and enable rapid responses to accidents and breakdowns. However, there is barely a mention of road charging and no mention of congestion charging, both of which have been enabled by recent technological advances. That is understandable in view of the unpopularity of such schemes. Indeed, the national road pricing schemes that were promoted by the Labour Government of 1997 to 2010 were abandoned due to public opposition.

Here, we can see the effects on the management of our road network of a deep-rooted social ideology. Many of our citizens regard it as their inalienable right to travel freely without let or hindrance on the Queen’s highways. They are barely mindful of the vast resources that are devoted to the maintenance of the highways, or of the great environmental cost that is associated with the exercise of their right to travel freely by road. Notwithstanding those deep-rooted attitudes, the Government should continue to pursue strategies of road pricing and congestion charging with a view to their eventual adoption in the appropriate circumstances. Such pricing mechanisms should be used primarily to ease congestion and with the secondary purpose of raising revenue to finance the development of the highways.

British attitudes to road pricing contrast markedly with those of the French. In France, there are numerous toll roads and those who wish to travel rapidly and for great distances have no alternative but to use them. The French seem to be wholly accepting of that. Another marked contrast between France and the UK is the French acceptance of a privatisation of the highways of a sort that I trust would not be acceptable in this country. Many of the French toll roads have been constructed by and are run by private companies, who have been granted long-term concessions. That is how the French have attempted to overcome the effects of the financial stringency of central Government, which might otherwise have inhibited the development of their national road network.

When faced with enabling legislation, one looks for hidden agendas and undeclared intentions. One can reasonably expect that there are plenty lying behind the Infrastructure Bill. It is remarkable, for example, as other noble Lords have mentioned, that whereas much of the accompanying documentation talks of a unique government-owned strategic highways company, the legislation talks of a plurality of such companies. Can the Minister say what, if anything, lies behind that legislative provision? I also seek an assurance that, notwithstanding the example of the M6 toll road, there is no intention to privatise large parts of our national road network, which would subject the roads to revenue-maximising tolls. In asking that, I observe that there are French consortia that are ready and waiting to take long-term concessions. I see grave disadvantages in ceding the ownership of yet more of our national infrastructure to foreign companies.