28 August 2009

Call to privatise UK motorways

Yes, the RAC Foundation has suggested that the English Highways Agency be privatised, which would raise as much as £85 billion, as a way of both improving road management and providing a hefty injection of funds to help repay public debt.

I wouldn't care whether individual motorways are sold, or the whole network, but it could make an enormous difference. The key though, is how it would be paid for.

You see British motorists pay fuel tax and annual vehicle ownership taxes (road tax), and none of the money is dedicated to roads. Of that revenue raised, only a quarter of that amount is spent on roads, almost as much as railways. So a key first step would be to dedicate a portion of that tax to the privatised road companies, who would get money on a per vehicle km basis. Then the company could raise tolls to replace such taxes, moving people towards user pays.

Of course it still leaves local authority roads, but they could be the next step.

Professor Stephen Glaister made this presentation about how poorly transport policy in the UK responds to the road sector.

Sadly most respondents to this issue on the Daily Telegraph website are more friends of Marx than the market. Whinging about the roads and how they are managed, but terrified of the market providing solutions.

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