CBI and Livingstone intensify transport pressure on Labour

20 Apr 00
The government has come under renewed attack over transport spending with the Confederation of British Industry demanding a £209bn package for improving roads, rail and airport systems.

21 April 2000

The employers' organisation, unveiling its ten-year spending proposals, said the government would have to more than double the £100bn investment package it is expected to launch in July if it is to salvage the UK's crisis-hit transport system.

The CBI's £209bn wish list includes £25bn for roads, £79.2bn for local transport, £62.2bn for rail and £9.3bn for aviation. It also calls for a major overhaul of financing for transport schemes, claiming that under-investment is damaging wealth creation and social inclusion.

'Twenty-five years ago the government spent almost as much on roads as it raised in road taxes,' said Digby Jones, the CBI director general. 'Now it spends half that amount – about £6bn annually – yet it raises some £36bn from road-users. Redressing that balance will be key to a successful programme.'

The government could also face a £70bn–£80bn funding shortfall even if it increases transport spending by £2bn a year over the next decade, the CBI predicts, which could only be made up by private investment and the use of more public-private partnerships.

Transport reform also dominated the launch of London mayoral candidate Ken Livingstone's manifesto. He pledged to continue his fight on the government's plans for a public-private partnership for the London Underground system, although he would have no powers to block it, and to freeze Tube fares. Livingstone said he would also consult on introducing a congestion-charging scheme for central London.

Deputy Prime Minister John Prescott immediately attacked Livingstone's plans. Speaking at an environment, transport and regional affairs select committee, he said: 'A freeze on fares for four years, that is an extra £100m that will have to be found either from investment or as a subsidy of one form or another.'

Prescott told the committee that he had never ruled out continuing to subsidise the Underground after the PPP, despite initial assurances that it would be self-financing. He also admitted that the government would be forced to pay out £45m in compensation if the PPP were cancelled, although this could turn out to be negligible compared to mounting fees to consultants on the scheme – more than £40m has been paid so far.


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