The government has promised that an extra £1 billion will be invested in major transport projects next year to stimulate the economy.
Chancellor Alistair Darling made the money available in his pre-budget statement which also included cut in VAT. However, the cut did not apply to fuel – Darling increased the duty to make up for the VAT cut.
Transport Secretary Geoff Hoon said the money earmarked for investment included £300m of new government funding to speed up the delivery of improved transport links to key UK airports and ports.
“I want people and business to be able to choose how and when they travel and to do so reliably, comfortably and safely. I therefore remain committed to tackling the problems of congestion and crowding, while at the same time reducing transport-related greenhouse gas emissions,” he said.
“Congestion, whether it is on our roads or railways, is not just a nuisance to travellers, it is also a tax on the productivity of our businesses, and if left unchecked could become a brake on growth. That is why I am today accelerating plans to make better use of Britain’s motorways and why I am also earmarking a further £300 million to remove bottlenecks and increase capacity on road links to key airports and ports.
“Our railways are more important than ever – more people are travelling on our trains and more freight is transported by rail. We have already pledged £10bn to increasing rail capacity, and as part of this promised to deliver 1,300 new carriages by March 2014. Today’s announcement will allow us to provide 200 of these earlier than previously planned.”
The £700m fiscal stimulus announced in the pre-budget report will deliver three key transport milestones, including:
The delivery of 200 new carriages earlier than originally expected for rail passengers in the Thames Valley, around Bristol and on longer distance inter-urban services in Northern England
The acceleration of work to make better use of motorways, following detailed examination earlier this year into the feasibility of introducing hard-shoulder running on around 500 lane miles of Britain’s motorways. In the New Year the government will announce on which motorways it will open the hard-shoulder to traffic.
Dualling of the A46 from Newark to Widmerpool could take place five years earlier than proposed as a result of an additional £174 million being made available for the scheme. Work could now start next year, two years early, on providing a new fast link between the A1 and M1. This could enable the scheme to open to traffic in late 2011 – rather than in 2016 as previously planned.
The £300m is designed to improve access routes to some key international gateways – airports and ports – subject to co-funding also being made available by regional and other partners.
These include:
Up to £165m dedicated to creating a new road link between Manchester Airport and the A6 to the east. This would provide better access to and from the UK’s fourth largest airport for the 21 million passengers who use it each year, and support the continued development of this key economic asset for the North of England
An extra £54m to help enhance the North London rail line to increase the long-term freight capacity of this vital cross-London rail route.
Up to £60m for new traffic management measures to improve safety, reduce delays and tackle congestion along 54 miles of the A12 – the main road link and a key freight route from London through Essex and Suffolk to the Felixstowe and Harwich Ports – some of the UK’s busiest ports.
Up to £30m to help improve access on the A160/A180 to Immingham Port on the River Humber. This will ensure that the right infrastructure is in place to ensure the long-term future of the UK’s largest freight port.
The Freight Transport Association condemned the Chancellor’s move to increase fuel duty to offset cuts in VAT. James Hookham, director of policy, said: “For a Chancellor who said he wanted to support British business through these troubled times, Alastair Darling has a cynical disregard for the cash flow problems of many small and medium sized commercial vehicle operators across the country. By offsetting the reduction in VAT with an increase in fuel duty, he has added thousands to the transport bills of companies across every sector. Not only does this hurt businesses directly, it also hurts the consumer, who will end up paying more to cover transport costs of items such as food, clothing and white goods. Christmas suddenly got even more expensive.”
The chancellor’s statement held few warm words for the logistics industry, but the ‘fuel duty snatch-back’ shows that the devil is in the detail. The chancellor confirmed a further increase in fuel duty of 1.84 pence per litre in April 2009 and remained silent on the planned reintroduction of the fuel duty escalator from April 2010. This led FTA to issue another warning to its members: beware of bear traps which could be in store for business.
The FTA welcomed Mr Darling’s announcement to invest in the motorway network, although it remained cautious until details of the proposed schemes are revealed.
It also pointed to a missed opportunity for the chancellor to bring much-needed funds into the Treasury coffers, and also to ensure overseas haulage vehicles pay their way. The Eurovignette, or ‘Britdisk’, was a Labour commitment in 2001, yet there has been little or no movement.
The British International Freight Association said the government seemed to be giving to its members with one hand, but taking back more with the other. The PBR is nothing more than a curate’s egg, said director general Peter Quantrill. “Partly good and partly bad, but quite probably entirely spoiled. “The bad bits are effectively unpalatable and are not entirely redeemed by the good bits,” he says.
BIFA has given a cautious welcome to the news that from next April, the government will increase the threshold for empty property rates relief to exempt those with a rateable value below £15,000.
However, Mr Quantrill said it would only provide short term benefits to some of BIFA’s member companies as the increased threshold was only temporary and didn’t take effect for almost six months. “We reiterate our demand that the Government reinstate empty property rates relief completely, he added.”
BIFA said the decision to increase fuel duty sent a very negative signal to freight forwarders and other businesses whose services were so highly dependent on fuel and played such an important role in the UK economy and international trade.
BIFA welcomed the decision to abandon per-plane tax aviation proposals, which Mr Quantrill said would have been a further blow to its members who offer airfreight services. He adds: “We also welcome the news that an extra £1billion will be invested in major transport projects next year including £300million of funding to speed up the delivery of improved transport links to key UK airports and ports.
