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'''The Great Transport Cop-Out'''
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'''17-Jun-95'''
 
A sensible transport policy must include road-pricing
 
RATIONING by queue, rather than by price, is an economic absurdity that should have been buried with the Soviet Union. Yet that is the current basis of British transport policy; and it is not only the drivers fuming in the traffic jams who suffer its consequences, but also those who are condemned to breathe their fumes. Now that the government is signalling its readiness to change course, it should think about steering away from a transport policy that has proved inefficient and smelly.
 
'Transport policy' is too generous. Since 1979, Conservative governments have had no such thing. That was not by accident: transport policy implies planning, and planning, Tories suspect, is a socialist pastime which denies the efficacy of the market. This view has done the country a disservice. Transport, as the current transport secretary, Brian Mawhinney, seems to have recognised, is one of the areas in which planning is indispensible. Four months ago Mr Mawhinney launched what he called a Great Transport Debate, canvassing ideas from all quarters, and on June 12th he announced that the government would produce a Green Paper on transport strategy - the first since 1977.
 
Mr Mawhinney has a lot of ground to make up. His department had become known as the Ministry for Road Building: ten transport secretaries over the past 15 years had little chance of standing up to the prevailing Thatcherite beliefs that cars were a symbol of individualism, and that to invest in railways was to pour taxpayers' money into a union power-base. Spending on road-building rose from L sterling 1 billion in 1988-89 to L sterling 2 billion in 1993-94. The building contractors were delighted, the economists less so. Transport, they argued, was not properly costed. Railways were increasingly passing on to passengers the costs of maintaining the track, yet road-users were not bearing the full costs of roads. This failure to price road-use properly leads to an inefficient use of resources.
 
One of the costs not being taken into account was pollution - an instance of collective damage resulting from the sum of individual choices, demanding collective remedial action from the government. The government, according to the Royal Commission on Environmental Pollution, has shirked its responsibility: it has failed 'to provide the country with an effective and environmentally-sound transport policy'. Those who live in cities do not need the evidence of royal commissions. Their noses tell them what is happening.
 
While the air has got dirtier, the queues have grown longer. Between the early 1980s and the early 1990s, motorway traffic doubled. Some parts of the M25 London orbital motorway carry two-and-a-half-times the traffic they were designed to bear. According to the Confederation of British Industry, the resulting congestion costs around L sterling 15 billion a year.
 
'''Sink the stink'''
 
The reasoned arguments of economists have gained political weight from a terrifying anti-road alliance of sandalled environmentalists and county ladies. Together, they have had some impact on the road budget. Public-spending plans published at the end of last year earmarked roads as the biggest loser: the road-building budget has been cut by L sterling 2 billion over the next two years. But that will just mean more congestion, unless the government is prepared for a more radical solution.
 
Rationing by price would enable the government to make drivers pay for the environmental damage they cause. A heavy fuel tax would be an option; but fuel taxes, which penalise drivers on open country roads as much as those in city jams, fail to deal with congestion. Higher fuel taxes should be combined with road-pricing in towns and on motorways. A long-promised trial of the technology is still awaited.
 
There is little point in Mr Mawhinney bothering with a transport policy unless he is prepared to be just a little bit brave. If national road-pricing is too frightening to contemplate, he might allow cities the freedom to try it themselves. That would have two benefits: it would decentralise transport decisions, which are best made by those who have to suffer the consequences, and it would help to show the sceptical British how much nicer life would be if their towns did not smell.
 
© 1995 The Economist Newspaper Limited. All rights reserved

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