Think-tank calls for road network share giveaway

12 April 2010

A leading UK think-tank has today published a new report, Roads to Recovery, arguing that each citizen should be given a free, tradable share in the road network, combined with the introduction of road user charges and the abolition of Vehicle Excise Duty (road tax)

As the economy crawls out of recession the challenge of restoring vibrant economic growth is made harder by the UK’s creaking transport infrastructure. It is predicted that congestion will cost businesses and households an additional £22bn a year by 2025. Congestion also damages the environment with vehicle emissions typically twice as high in slow-moving traffic as on free-flowing roads. Road user charging is the policy solution but is understandably unpopular with voters because politicians see it as a way to raise more tax.

To overcome political objections to charges citizens must retain ownership of their roads. Every British citizen should be given a tradable share in the roads worth over £1500. Any profits from road charging, or the sale of road shares, would then go to shareholders – the people – rather than into Treasury coffers. The report calculates that, as well as receiving the road share windfall, the average motorist would be better off, paying less in tolls than they currently do in tax

Commenting, Ian Mulheirn, co-author of the report and Director of the SMF said:

“Britain’s transport infrastructure is creaking under the pressure of more and more cars. Over the next decade there will be no money to build new roads and public transport cannot make a significant difference to capacity. Instead we must make better use of our existing infrastructure by pricing the roads so that drivers have an incentive to use them during less crowded periods.

But road charging shouldn’t benefit the government or big business. Instead every citizen should be made a shareholder of the roads so that they benefit from any profits from road charging. Combining this with the abolition of road tax would leave the average driver better off to the tune of a £1,500 asset and £75 per year”.

“Road charging is a fair system. It means that people pay for what they use, including foreign hauliers who currently pay nothing at all. Charges will help to change driver behaviour, and make the most efficient use of a shared resource that is crucial to future economic growth. Britain is gridlocked and this new proposal will help to solve congestion and support the economy”

Editors Notes   

“Roads to recovery: voucher mutualisation to reduce congestion” by Ian Mulheirn and David Furness is published by the Social Market Foundation

Under the SMF plan for ‘voucher mutualisation’ each citizen would benefit from a voucher representing their share of the national SRN worth over £1,500.

  • In addition to this, each vehicle owner would no longer have to pay VED, which is around £235 per year for a standard 2 litre petrol engine car, and £425 in the first year of owning a new car.
  • Any profits from the operation of the roads that are not reinvested in the motorway network in order to improve it - over and above the current level of maintenance - for drivers. Such profits could be up to £80 per year if no new investments were made.[1]
  • Foreign drivers would pay on toll roads where they currently do not contribute to VED. They would therefore pay a fair contribution that reflected their use of UK roads.

Taking everything into account, the average car owner would be better-off under SMF voucher mutualisation to the tune of a £1,500 asset and £75 per year. The average two-driver household with two children, would be better by around £6,000 in assets and some £150 per year. Even heavier users of motorways would benefit from the value of the voucher plus any profits generated by the operating company.



[1] Based on net revenues of £5bn per year, as calculated above.

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