By Jaimie Kaffash
12 April 2010
The government should hand over responsibility for the road network to citizens through shares that would generate money through road tolls, according to a think-tank report.
The Social Market Foundation’s study, Roads to recovery, published today suggests that every citizen in the UK should be given a tradeable share in the road network worth £1,500. It recommends replacing the Vehicle Excise Duty with road user charges on the motorways, money that ‘would go to the shareholders – the people – rather than into Treasury coffers’.
It claims that this would reduce road congestion, which it calculates would save £22bn a year by 2025. The upkeep of the roads would be the responsibility of private companies, appointed by the government.
David Furness, co-author of the report, told Public Finance that this proposal would overcome the public’s opposition to road pricing. ‘We think the problem is that road charging is never going to fly politically because people see it as a way of raising money. Motorists say “we are highly taxed, we pay road tax, fuel duty, we don’t want to pay toll duties too”.
‘There is a massive amount of economic productivity you can release by reducing congestion.’
He added that this would not cost the public finances, even in the short term. ‘It would not be an expense to government at all,’ he said. ‘They would be tradable shares on the stock market. There is no upfront cost to government. The money they lose from abolishing the Vehicle Excise Duty is made back from the fact they are no longer responsible for the strategic road network. You are liquidising an asset that is held by the government and you are giving it to citizens on a mutual basis.’
The process for administering the shares would be ‘similar to the “Tell Sid” campaign by British Gas about buying discounted shares, but would be easier as you would be giving a share to everyone’, he said.
Paul Watters, head of roads and transport policy at the AA, said the plans were unworkable, however. He told PF that ‘giving citizens shares in something drivers have already paid for over generations is a little perverse’. He added that road pricing remains unpopular ‘however you dress it up’ and that the only profits that could be made would be from road users themselves.
12 April 2010
The government should hand over responsibility for the road network to citizens through shares that would generate money through road tolls, according to a think-tank report.
The Social Market Foundation’s study, Roads to recovery, published today suggests that every citizen in the UK should be given a tradeable share in the road network worth £1,500. It recommends replacing the Vehicle Excise Duty with road user charges on the motorways, money that ‘would go to the shareholders – the people – rather than into Treasury coffers’.
It claims that this would reduce road congestion, which it calculates would save £22bn a year by 2025. The upkeep of the roads would be the responsibility of private companies, appointed by the government.
David Furness, co-author of the report, told Public Finance that this proposal would overcome the public’s opposition to road pricing. ‘We think the problem is that road charging is never going to fly politically because people see it as a way of raising money. Motorists say “we are highly taxed, we pay road tax, fuel duty, we don’t want to pay toll duties too”.
‘There is a massive amount of economic productivity you can release by reducing congestion.’
He added that this would not cost the public finances, even in the short term. ‘It would not be an expense to government at all,’ he said. ‘They would be tradable shares on the stock market. There is no upfront cost to government. The money they lose from abolishing the Vehicle Excise Duty is made back from the fact they are no longer responsible for the strategic road network. You are liquidising an asset that is held by the government and you are giving it to citizens on a mutual basis.’
The process for administering the shares would be ‘similar to the “Tell Sid” campaign by British Gas about buying discounted shares, but would be easier as you would be giving a share to everyone’, he said.
Paul Watters, head of roads and transport policy at the AA, said the plans were unworkable, however. He told PF that ‘giving citizens shares in something drivers have already paid for over generations is a little perverse’. He added that road pricing remains unpopular ‘however you dress it up’ and that the only profits that could be made would be from road users themselves.
