Charges open rift with Lamont

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GOVERNMENT plans for motorway charges opened up a public split yesterday between Norman Lamont and John MacGregor, Secretary of State for Transport and one of the Cabinet ministers tipped to succeed him as Chancellor of the Exchequer.

Speaking at a Confederation of British Industry conference in London, Mr Lamont said the injection of private finance into roads and other capital projects could transform Britain in the Nineties in the way that privatisation had in the Eighties.

'If charges were introduced,' the Chancellor said, 'that could pave the way for what I regard as the end of the exercise; the privatisation of large parts of the motorway network.'

The prepared text of his remarks had stressed the qualification that no decisions had been taken, but the Chancellor believed there was a strong economic case for bringing market disciplines to bear more directly on road users by introducing charges at the point of use.

When Mr Lamont's views were put to Mr MacGregor on ITN's lunch-time news bulletin, he said: 'At the very end of the Green Paper, we talk about a possible ultimate solution, which could be having an agency which operates all the motorways, and financed by charges. But that's very much an ultimate solution, and it's only a possibility.'

The Green Paper, however, went further than that: discussing the possibility of franchising sections of the motorway network as with the plans for British Rail. But neither Next Steps Agencies nor franchising are described or regarded by the Government as privatisation - the much more radical option favoured by Mr Lamont.

In his speech, Mr Lamont said there was no reason why roads, bridges and tunnels should not be financed from user charges and operated in a market environment in the same way that other public-sector activities had been passed over to private operation.

He suggested that private finance for major projects may be a way of overcoming the constraints imposed by Britain's pounds 50bn deficit. Private finance, he said, had a major role to play in resolving the conflict between the need to keep tight control over public spending and the public's desire for more and better infrastructure.

Later, Howard Davies, the CBI's director general, warned ministers that the Government had to speed up the process of getting private finance into public-sector projects or its plans would lose momentum.

The financial returns to private investors also had to reflect the risks, he said. Referring to the Channel tunnel rail link, Crossrail and the Heathrow Express, he said: 'We need a few early successes to show what is possible and how partnerships will work.'

Only by establishing a track record quickly would the Government be able to capitalise on the private-sector enthusiasm which now exists, he said.

Mr Davies also urged the Government away from the 'superficially easy' option of cutting capital expenditure because of the squeeze on public spending.