In choosing to open Budget week with a major speech on the country's infrastructure, the Prime Minister was positioning himself as much in the political, as in the economic, arena. A speech replete with references to the UK's great civil engineering tradition and commitments to long-term projects will make it that much more difficult for Ed Miliband, when he stands up to respond to the Chancellor's Budget on Wednesday, to level accusations about the Government's lack of vision, neglect of job creation and disregard of growth. To this extent, it was a shrewd pre-emptive strike.
But in drawing attention, not before time, to the way in which successive governments have allowed our infrastructure to fall behind that of many other countries, David Cameron only underlined the distance that must be travelled between aspiration and achievement. Moving from a mindset of make-do and mend to one of long-term planning and investment will require an enormous change, and as much political will.
If, by focusing on roads and the congestion that costs an estimated £7bn a year, Mr Cameron hoped he was starting with one of the least controversial areas, he may have another think coming. The UK's motorists are among the most heavily taxed in the industrialised world, what with petrol duty and the requirement to buy an annual tax disc, and they will mount fierce opposition to anything that makes them contribute more to the Exchequer. Road tolls are particularly disliked, not just as an additional cost, but because they suggest decent roads could become the preserve of the rich.
To be fair, Mr Cameron went out of his way yesterday to stress that government plans to lease trunk roads and motorways to the private sector would not amount to "mass tolling". Private companies, he said, would be able to charge only for new, not improved, roads. And the dire state of the roads, combined with the dire state of the economy, means that new avenues do need to be explored. Inviting private concerns to bid for fixed-term leases has to be the best of the limited options. Britons who drive enviously along well-maintained French roads, and pay to use French motorways, must acknowledge that we have a successful example of how private money can be harnessed to road building practically on our doorstep.
At the same time, there must be caveats. Britain is not France. Charging tolls for motorways would risk diverting heavy traffic on to inadequate secondary roads. Charging is reasonable only when there is a viable alternative – which is why Mr Cameron's distinction between new roads (which could be charged for) and improved roads (which could not) needs to be maintained. And while as much freight as possible must be switched to rail, much will still have to travel by road, and any spread of charging could raise costs across the economy. It has also to be recognised that ponderous UK planning procedures are as much of a drag on road improvements in many parts of Britain as is any shortage of public funds.
In looking for new ways to fund roads, the Government has also to recognise the bad name that privatisation has acquired. Water – the example Mr Cameron cited most yesterday – may be more cost-effective than some. But in other privatised utilities, high tariffs and complex pricing structures have made it hard for consumers to save money, while the private finance initiative has left hospitals and schools with mortgage debts that will be a burden on their finances for years to come.
The Government should forge ahead with road leasing. The UK's motorists badly need better roads, as does the economy as a whole. If ministers are to convince a sceptical public, though, they must devise a regulatory regime that avoids perverse incentives and demonstrate that they have learnt from past governments' mistakes.Reuse content