3 thoughts on “Road pricing: to build the infrastructure we really need without government borrowing”

  1. Posted 31/10/2016 at 07:24 | Permalink

    Couldn’t agree more. Further, instead of the Government borrowing even more money to placate big business in the wake of the Brexit vote, it should seek to substitute the public subsidy given to certain industrial players, like Defence Contractors with Private Sector funding.

    This proposal is at the heart of a Defence Industrial Strategy that puts the National Interest first, not military equipment manufacturers’ interests. It comes in the form of written evidence published recently by the Business, Energy and Industrial Strategy Committee, which is conducting an inquiry into Industrial Strategy.

    The submission observes:

    “It is called the Private Sector for a reason – so that it can use Private Sector funds, not Public Sector subsidy to innovate, grow, create jobs and make a profit. It is the job of Government to foster an environment which causes this to happen, within the context of a modern Industrial Strategy.

    If the Government is going to intervene in the market with public funds to stimulate economic activity and boost export-led growth, then provision of this subsidy should be made conditional upon Private Sector players making an equivalent contribution of investment capital to increase the competitiveness of their own products and services, both in the domestic and export markets.

    As for the Ministry of Defence, there exists no evidence that its long-standing policy of securing input of Private Sector investment capital into defence equipment programmes is being applied, which means that they continue to be funded exclusively by the taxpayer – yet, the Intellectual Property Rights for the resultant fully engineered equipment, which rightly belong to the Exchequer, is simply handed over to the main Contractor for nothing in return!

    Accordingly, to avoid repeating mistakes of the past, a revamped Defence Industrial Strategy should have at its heart, a built-in mechanism which elicits Private Sector capital into defence equipment acquisition programmes, as its first and foremost priority.

    This submission shows how to go about doing exactly that.”

    And it concludes:

    “At a time when senior members of this Government are firmly behind the view that this country should put economic security first and balance its books at the earliest, there exists an excellent opportunity to introduce a Defence Industrial Strategy which gradually replaces the public subsidy given to Defence Contractors with Private Sector funds.

    Ask not what Government can do for Business, but what Business can do for Government.”

    The full submission can be downloaded via this link:
    http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/business-innovation-and-skills-committee/industrial-strategy/written/36606.pdf
    @JagPatel3 on twitter

  2. Posted 01/11/2016 at 10:00 | Permalink

    My challenge to those claiming to be neo-liberal is on why the road network is still run by the state but other infrastructures (rail, air, ports, pipes, cables…) are now private. Road pricing would be a step towards user-pays but doesn’t really deliver the market in road building and maintenance that free market theory suggests should benefit it.

    The uncomfortable truth is that many roads simply wouldn’t be profitable, especially in rural areas or, indeed, sparsely-populated commuter areas around the Home Counties. The cost-per-mile would leave these roads in a ruinous state. It would be unwise to treat the profitable motorway and highway network as being somehow separate. The M6 Toll is a bit of an aberration as it is.

    I also don’t agree about the comparison with the city, canal and railway building of the 18th and 19th centuries with the claim that the private sector can run these things today. These projects were this high-tech developments of the day. A modern equivalent would be the internet, the fibre-optic networks and mobile phone technology. Even the development of low-cost air travel. One day perhaps these will be in state hands.

    However I totally agree about HS2 and Heathrow. Where is the private money that backs up claims that these would be good for the economy? And which economy are we talking about? Neither will change my life here in Scotland. These are London projects most of all, like Crossrail and Eurotunnel, the latter being privately funded.

    Do major infrastructure projects require state sponsorship? I think in many ways they do. I don’t think we have a free market that facilitates players to come together and raise capital to fund the projects. That might suggest that the projects aren’t economic. Or it might suggest that a free market is good at the small things but not the big things. What would the UK look like if it never had a Department of Transport or the council equivalent? Would we still be a country of turnpikes and private estates? I don’t think so. Not as a democracy, where the nation would have insisted that roadbuilding was a collective responsibility. But perhaps, as your article states, we can put in some kind of road pricing. Some might say we have that already with fuel duty.

  3. Posted 03/11/2016 at 11:33 | Permalink

    I used to be against road pricing on grounds of cost. But perhaps a box that can monitor vehicle locations and a central computer to crunch the data can now be down cheaply enough.

    Which would also mean private infrastructure providers can either take a cut, or be taxed (as scarcity rents) if they charge directly themselves.

    Lots of possibilities.

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