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1996-07-15 DoT-001
Department of Transport


Sir George Young calls for realism in transport investment

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Department of Transport

Sir George Young calls for realism in transport investment

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15 July 1996
source Department of Transport
type Press release

note 224/96

Transport Secretary, Sir George Young, today welcomed the CBIs
report on transport investment (Winning Ways),but called for realism
in the discussion of future plans.

Speaking at the CBI seminar in London, Sir George said,

Maintaining tight control of public expenditure will remain a top
priority for this Government - a message which I believe will be
welcome to most business interests and one which reflects the CBIs
call for fiscal prudence and long term control of inflation.

Sir George said he believed two courses of action were necessary in
response to the need for restraint in public spending: we must make
better use of existing infrastructure and we must seek new sources of
finance for further investment.

Sir George said:

"A number of important initiatives are already underway in the search
for more efficient use of our existing roads. Developing route
strategies is one such approach, now being considered by the Highways
Agency. Under this proposal, agreed service standards could be set
for new routes with co-ordinated programmes for improving and
managing Other initiatives rest on the new possibilities offered by
developing technology. Electronic signals can be used to control
speeds, with variable message signs to inform drivers of alternative
routes. To make the best use of these relatively straightford
techniques, the Highways Agency is developing systems based on
sophisticated traffic modelling, designed to react to conditions at
local as well as at strategic levels.

Privatisation will lead to more efficient use of the rail network,
both for passenger and freight services.

"We are already seeing the fruits of this approach, in the plans of
the first passenger rail franchisees. South West Trains, for
example, are looking to reinstate a number of off-peak services, and
to double services between Southampton and Salisbury. National
Express Group, the franchisee on Midland Main Lin[[e]], will be running an
extra 22 services each week day from Leicester to St Pancras. And we
expect to see significant improvements in the punctuality and
reliability of services arising from the demanding performance
regimes which form a key part of contractual relationships in the
restructured industry.

Freight services are also set to benefit from liberalisation and
privatisation, which we believe will check and then reverse the
decline in rails share of the freight market. North and South
Railways, owned by Wisconsin Central Transportation, have already
announced plans for substantial new investment in rolling stock and
are examining the scope for services based around wagonloads of

Sir George acknowledged that efficiency improvements could not be
expected to meet all of industrys demands for improved transport, and
there was a need for targeted investment in new infrastructure.
However, it was not realistic simply to offer lists of desirable
projects without saying where the funding would come from.

"A number of recent proposals for increasing transport investment
rely heavily on changing the structure of public spending, without
identifying areas for corresponding cuts. This is simply unrealistic
- not to say irresponsible. There are no soft targets left in the
public sector. Proposals for new spending which are based simply on
an assessment of the amount currently paid in taxation by road users
do not offer genuine solutions, but simply suggest a different
division of the existing level of resources.

I would have liked to see this issue addressed more fully in the CBIs
Winning Ways. That report relied rather heavily on the assumed
possibility of making savings elsewhere in the public sector -
without saying exactly what should be cut. And in referring to new
revenue streams as a partial solution, the report did not identify
exactly who would end up paying more to finance higher investment.

There is no room for conjuring tricks: extra public spending on
transport on the scale proposed in the report can only come from
three possible sources:

less spending on other public sector programmes;

higher taxation on individuals or businesses; or

extra payments by transport users.

If the issue of funding is not squarely addressed, then we are only
hearing half the story.

On the search for new sources of finance, Sir George referred to the
success of the Private Finance Initiative in the transport sector,
and noted the Governments agreement with the major conclusions of the
CBIs separate report Private Skills in the Public Sector.

Looking ahead, Sir George outlined plans for a new study to examine
in greater depth the links between traffic growth, transport
investment and economic growth. The Standing Advisory Committee on
Trunk Road Assessment (SACTRA) will be taking this study as thier
next task.

Railhub Archive ::: 1996-07-15 DoT-001


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