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News - 2 December 2006

Road charging must come with better alternatives

Road charging has been one of the hottest topics under the microscope this week. Some small businesses are worried that the charges could put them out of business; villagers are worried that their country lanes will become rat runs for articulated lorries; many people fear it will be just another tax and no one has any confidence that the money collected will be used to improve the transport infrastructure.

Following Sir Rod Eddington’s endorsement of a road charging system (see story in Knowledgebase entitled Pay and Drive ) the nation has been dissecting the problem and offering up solutions to ease congestion in the UK.

The Forum of Private Business (FPB) has called for genuine transport alternatives to be funded by any system of road charging introduced to the country’s busiest routes.

The FPB, which represents around 25,000 small and medium-sized businesses across the UK, fears that without workable alternatives to road travel, the proposed system will turn into just another tax on small firms and their employees.

Nick Goulding, Chief Executive of the FPB, says at the moment there is no viable alternative to our overcrowded roads, "Business must be able to put significant amounts of freight onto an efficient and cost-effective railway. Employees must have access to quick and cheap public transport."

The Federation of Small Businesses (FSB) has been more vehement in its response to the Eddington Review stating that it is disappointed. FSB research among members shows that most businesses have no choice about their travel patterns. Therefore, road charging will not reduce congestion but will simply increase business costs and harm the economy.

The FSB argues that businesses need to be able to get their goods and services to market easily, reliably and cheaply. A transport system that does not allow this severely restricts the economy.

Steve Collie, FSB National Transport Chairman, said, "Any road charging measures must target non-essential journeys only. A blanket charge will simply be another tax on the already hard-pressed road user.

"Businesses need access to the road network at all times to service the needs of their customers. Tackling congestion would be welcome but charging them for this access would hit firms very hard - costing the Government more revenue in lost taxes than they would raise through road charging.

"A tradesman going to a customer's house cannot take his tools and equipment on the bus. Therefore, the Government must recognise that essential business journeys on the roads would only be taxed at the expense of the UK economy.

"Business also needs an efficient and reliable public transport network so that staff can arrive at work on time. The average business loses nearly seven hours a week of staff time because of transport problems. That directly hits the UK economy and must be a Government priority for urgent action. More funding is needed for transport - but road taxes already provide it. Money raised from transport use should be spent on transport projects, not siphoned off to other areas of Government spending," says Collie.

However, the CBI has been very supportive of the proposals. Deputy Director-General John Cridland said, "Improving the UK's domestic and international transport network is a vital economic imperative, as Sir Rod recognises in his report. At least £300 billion of projects should be started over the next decade, which would generate savings and returns worth many times as much.

“Sir Rod's support for a national road pricing scheme to cut congestion and its potential benefits, and his route map to implementing a system in ten years, is absolutely right. There is a lot of work to do, though, to ensure the design of any scheme is right and that any revenue raised benefits road users -by funding an integrated programme of improvements in our transport system, for example.

"We're pleased the report also recognises the problems created by an overly-bureaucratic and unwieldy planning system. Sir Rod has set out a number of interesting ideas to improve it and help deliver the major infrastructure investment required to support future economic growth."

Mr Cridland added, "The development of the transport system will not only play an important role in future economic growth in the UK but also in how the country tackles environmental issues. The CBI will now look for firm policies and commitment to developing and implementing Sir Rod's proposals in the Government's forthcoming Comprehensive Spending Review."

Read related items on:
National policy
Federation of Small Businesses
Forum of Private Business
Collie, Steve
Cridland, John
Eddington, Rod
Goulding, Nick

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