Railwatch 069 - October 1996

Taken for £100bn ride

By Steve Rackett

If the real costs of motor vehicle travel were not subsidised, car drivers would pay £15 per gallon, reveals a new report published by the RDS Parliamentary Committee.

The Great Road Transport Subsidy, by Norman Bradbury and Graham Nalty, is the first time roads have been properly costed. The paper shows that if hidden subsidies are considered, road users enjoy 40 times the subsidy paid to rail, yet carry only 15 times the quantity of passengers and freight.

Costs which are not normally taken into account by the Department of Transport include external road congestion, accidents and breakdowns, car parking, police and court time, environment and health, return on the asset value of roads, company car tax and National Insurance shortfall, and the business mileage subsidy.

The Department of Transport has always portrayed road spending as "investment" while denigrating rail spending as a "subsidy" which was a problem to be dealt with. The authors say that this has led to a situation where road transport costs have been kept artificially low while rail costs have been increased. The unfortunate result is that people are given a financial incentive to use the most socially unacceptable form of transport.

"Many responsible environmental organisations have carried out a more thorough analysis of the costs of road transport, and this work totally discredits the road lobby claim that roads are profitable," says Graham Nalty, chairman of the RDS North Midlands branch. "Our report draws on previous research but goes a stage further, by revealing ALL the costs of providing roads by motor transport."

Taking into account taxes on fuel, excise duty and on vehicles, as well as car parking, insurance premiums and other taxes, the total direct and indirect payments are nearly £29 billion a year but the real costs are around £100 billion.

The total costs include road construction, maintenance, licensing and highway administration (£5 billion per year), car parking (£6.7 billion), subsidy to company car drivers (£4 billion), business mileage (£300 million), congestion (£2 billion), accidents and breakdowns (£17 billion), environmental including pollution, noise and global emission economic damage (£24 billion), and police and court time (£3 billion).

Railtrack is required by the Government to raise charges equivalent to an 8% return on the estimated value of the rail network. Using the same pricing system for roads, the Government should expect to raise £32.4 billion a year, as a financial return from road users for its investments in roads. But it does not.

The charge cannot logically be applied to rail transport without being applied to roads.

"Why should motorists, bus companies and road hauliers be virtually the only section of the community to enjoy personal use of or make money from a very expensive asset without providing a return?" asks RDS. This view is bound to stimulate debate among those involved in the transport profession and in the environmental movement.

The report is being launched by RDS to lobby politicians and bring public attention to the unfair, unbalanced and counter-productive nature of transport funding in the UK.

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