Strategy for improvement, or busy fools syndrome? 06 January 2015

Whatever happened to winding down for Christmas? For much of transport, which, like retail, has its busiest time during the season, the question rarely arises. But for the vast majority of industry, commerce and government, it's traditionally time to ease off the accelerator and look forward (or not) to the office party and its associated merriment.

December, however, saw the coalition government still motoring, with not only the oddly named Autumn Statement delivered and the usual flack flicked away, but also major announcements on road building, to the tune of £15 billion, changes to the Highways Agency and the decision to revise speed limits for HGVs from April.

First things first, and George Osborne's decree that fuel duty would again be frozen was as warmly welcomed as his failure to cut it by 3p per litre was condemned. The near universal view: could have done so much better. As RHA (Road Haulage Association) chief executive Richard Burnett said: "Diesel represents more than a third of a haulier's costs and UK fuel duty is the highest in the EU." For this reason alone, European competitors still wield an unfair advantage.

Clearly, a 3p per litre duty cut would have gone some way to levelling the playing field. Arguably, it could even have been more effective than the government's much-vaunted Road User Levy, which, although exceeding its estimated annual revenue in the first six months, is widely believed to be penalising importers who are now forced to pay foreign recharges. Either way, at a domestic level, it would have meant a 3–4% reduction in average haulier costs. And from a bigger picture perspective, as the Treasury last year conceded, it would have been good for GDP (gross domestic product), jobs and inflation, too. Now that would have been worth celebrating.

What about that massive road-building programme, with more than 100 new schemes announced for this parliament and the next? It was hailed by transport secretary Patrick McLoughlin as the biggest upgrade to English roads in a generation. No doubt about that, if it happens. And no doubt, too, that this would assist all road users, including hauliers, in terms of both journey times and fuel costs, if its impact on congestion is as profound as seems likely. However, while the DfT's (Department for Transport) new Road Investment Strategy has the smack of certainty, nothing can be set in stone, particulary with the approaching election.

That's the niggling worry – even though the Highways Agency is to become a government-owned company (renamed Highways England) from April, following last month's second reading of the Infrastructure Bill. DfT believes this will cement in its proposals and save the taxpayer some £2.6 billion over the next 10 years. And roads minister John Hayes reckons that giving oversight of the road network to the Office of Rail Regulation will provide the right performance checks to ensure value for money. But time will very soon tell.

As for where all this leaves us: well, for the moment, nowhere. New and expanded roads, and a better maintained existing infrastructure are attractive propositions. However, operators are focused almost exclusively on costs. That's why fuel duty cuts, driver training support, incentives for dual-fuel conversion, etc, are what really matter. Those didn't happen. Happy New Year.

Author
Brian Tinham BSc CEng MInstMC FSOE FIPlantE FIRTE

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