The current political debate is largely centred around the balance between public spending cuts and tax rises. But the importance of economic growth in dealing with the crisis in public finances should not be forgotten. The congestion that clogs up the road network is a major impediment to economic recovery as British employees and companies labour under the huge hidden costs of a creaking transport infrastructure.
Road-building is costly, slow and unpopular, and modal shift will never be large enough to solve the congestion crisis, so we must make better use of the existing road network. Politicians must deal now with the challenge of congestion by making the road network more efficient through charging motorists for how much, when and where they use it.
To overcome the political objections to road user charging this report recommends a ‘voucher mutualisation’ of the Strategic Roads Network. This solution offers a politically acceptable transfer of ownership from public to private hands, giving every citizen in the UK a tradable share in their network for free. This shift will facilitate the introduction of road user charging and would be accompanied by the abolition of Vehicle Excise Duty. Any profits from operating the roads would then go to the shareholders: British citizens.
Under the SMF’s proposals, the average car owner would be better-off 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.