Labour Finance & Industry Group

Submission to Partnership in Power

‘Towards a new Labour Transport Strategy’

Summary: The success of the Labour Government since 1997 in creating 1.6 million new jobs has
put increasing demands upon the transport infrastructure after years of under-investment. Therefore
future policies must correct under-investment, combat increasing road congestion and the decline of
rail, whilst addressing the wider environmental, social and economic issues driven by transport policy.
Building on Alastair Darling’s recent statement ‘Managing Our Roads’ we suggest a radical new
approach. We propose that much more of transport fund-raising and decision-making are devolved to
regional and local levels within a broader national strategy, with an associated drive to secure wider
public support for the tough choices involved. The paper deals only with road and rail because these
are the most urgent political issues.

1. Why does transport matter?

Transport connects to everything else
1. The effect of transport policy reach into nearly every aspect of the nation’s life. Specifically, the
availability and quality of transport affects:
(a) National productivity: not just access to markets and suppliers, but supporting the intensity
of economic interaction central to cluster formation in knowledge-based industries;
(b) Where people choose to live, and what choices they then have of where to work, shop,
enjoy their leisure and access services like health and education;
(c) The social make-up of neighbourhoods and the ease and quality of social interactions
(locally and over longer distances);
(d) Health and quality of life (directly through noise, danger, pollution, severance and visual
intrusion of traffic, and indirectly by inhibiting exercise and global warming);
(e) The rate of depletion of critical natural resources (and our dependence on oil imports).

Transport matters to voters

2. People do not automatically connect these issues with transport, but the fact is that they are
connected and they are amongst the most important issues facing both Government and voters.
Transport is also a potent political issue in its own right: more and more people are directly
experiencing late and cancelled trains and congested roads. Some of these problems are the result
of the growth we have achieved, but unfortunately people do not always think of this when they
are waiting for a train or bus that does not arrive.
3. Opinion research shows that the botched dismemberment and privatisation of British Rail remains
a major part of the Tories continuing eclipse1. However, responsibility now rests with Labour.

2. Where are we now?

1. The dominance of roads in transport provision since WW2 has had crucial effects on patterns of
behaviour, with effects well beyond the transport system itself:
(a) Roads offer almost universal accessibility to those with a car, making the car one of our
society’s most desired possessions;
1
According to Andrew Cooper, a marketing consultancy director writing in a conservative think-tank publication
(‘The Blue Book on Transport’, Politico’s Publishing, 2002)

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 (b) People take advantage of additional road capacity to drive further in pursuit of a wider
choice of homes, work, leisure and services (half the growth in travel over the last 30 years
has simply been people travelling further for the same purposes);
(c) Where people live is increasingly a balance of cost and lifestyle, on the assumption of being
able to drive to a wide range of jobs, retail or leisure opportunities. Similarly, businesses
and public services increasingly locate where road access and parking is easiest;
(d) Public transport, which depends on collective provision, is not well-suited to meeting the
diffuse pattern of demand that results. Services to the weaker centres decline, the advantage
of out-of-town location increases – and so does car-dependency;
(e) People without the use of a car (because too old, too young, too poor, disabled or simply
disqualified) are significantly disadvantaged in terms of access opportunities that the car-
borne majority2 take for granted: they suffer ‘transport poverty’;
(f) The real cost of car ownership continues to fall and the relative cost of public transport use
continues to rise;
(g) The development of commercial sites along motorway routes without adequate public
transport access continues to encourage car usage.
2. These adverse changes to patterns of demand are reinforced by the way we pay for transport: price
signals favour the use of cars over public transport where there is a choice:
(a) With the car we pay a large amount to get access to the system (the cost of the car itself,
insurance and road tax). After that, roads are free and the other costs of use (fuel and
maintenance) are relatively low and not strongly associated with any particular trip. The
‘pay once’ price signal means that having acquired a car, the logic is to maximise its use;
(b) With public transport on the other hand we pay for each use we make. The ‘pay per’ price
signal means the logic is to avoid this cost by using the car if this is at all feasible.

Why aren’t present policies enough?

3. The immediate symptoms of transport failure are obvious enough: chaotic railways, congested
roads and urban sprawl – all reinforcing each other. This is not the fault of present policies, but
has longstanding and deep-seated causes (see Appendix 1). For the last 50 years UK governments
of all parties have tried to keep up with burgeoning travel demands by concentrating on improving
and adding to the part of the transport system for which demand is highest – roads.
4. ‘Predict and provide’ (which describes this approach) was abandoned by Labour in the 1998
Transport White Paper3, in favour of a more integrated strategy, more like the best practice in
some continental European countries. But undoing the results of decades of underinvestment in
urban public transport and rail is not easy or quick, and making such a radical shift involves taking
on an entrenched roads lobby (including officials and professionals) and short-term crises (like the
September 2000 fuel protests).
5. There have been revisions on other aspects of transport: three examples give the flavour:
(a) The creation of Network Rail has been widely welcomed, but has not in itself stopped the
haemorrhage of money into the black hole of Railtrack’s neglected maintenance. Most the
investment in rail improvements is planned to come from the private sector4, but the
heightened perception of risk will make this more expensive and difficult.
(b) 21 Multi-modal Studies (MMSs) were started between 1999 and 2001 to examine ways of
solving the worst problems of congestion on the national road network. These have
produced hugely expensive ‘wish lists’ of schemes, which in practical terms look very like
the roads programme that the Tories gave up on in 1995. As then, it is becoming clear that
these proposals are unaffordable – and would not work without road user charges;

2
depending on the region and urban or rural setting, 20-30% of households have no car; plus of course there will
also be individuals in car-owning households for whom the car(s) are not available.
3
DETR (1998) ‘A new deal for transport: better for everyone’
4
£34.3bn (70%) of £49.0bn that the Transport 10 Year Plan proposed should be invested in national railways

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 (c) The ODPM’s ‘Sustainable Communities’ plan proposes four large-scale housing growth
areas in the South East. Each of these gives rise to major transport requirements (not
allowed for in either the Transport 10 Year Plan or the MMSs), and would worsen regional
economic disparities if funded from an unchanged national pot.

3. What should we do about it?

A new vision for transport
1. Several of our continental European neighbours have better-performing transport systems, and the
fundamental reason is a different vision of the role of transport. Transport is an integral part of
their vision of the future of their cities and regions (see Appendix 2), their quality of life and
national economic competitiveness – and transport consequently takes a higher proportion of
national GDP5. British practice (for at least the last 50 years) has been to treat transport as a
separate, somehow more technical issue6.
2. The first step is to reiterate the importance of transport – both as a key part of Labour’s whole
political project and as a crucial voters’ test. The vision for transport must start at national level:
how does the kind of country we want inform our aspirations for the transport system?. The
answers are the obverse of the major transport impacts listed at the start (paragraph 1.2), and
include such public objectives as:
(a) Supporting an urban renaissance, recognising the role of urban concentration and intensity
in knowledge based industriesand increasing national productivity;
(b) Reducing the economic disparities that are shifting the balance of population from North to
South, causing disproportionate transport costs, overheating and congestion in the south;
(c) Securing and protecting urban and rural quality of life in terms of accessibility of
opportunities, environmental quality, social inclusion and a strong social fabric;
(d) Achieving the urban/rural balance necessary to secure urban renaissance and protect
countryside from excessive development;
(e) Reducing the transport sector’s vulnerability to shortages of scarce natural resources, and
ensuring that it is sustainable in the long-run.

A new strategy
3. A strategy to achieve these aims must bring together three key elements: a fairer approach to
transport pricing; improving transport integration by devolution to regional and local levels; and
engaging wider public support to counter the influence of single-interest lobbies.

Fairer pricing, creating real choices

4. How we pay for transport is the crucial component of a truly integrated transport strategy.
Alastair Darling’s announcement of a major study of road user charging is highly significant,
because it has the potential to change the imbalance of price structures (paragraph 2.2). We
believe this to be the foundation for a more effective approach.
5. The key principles are (a) that the way that users pay should not introduce an artificial bias into
the choices that they make, and (b) where public money is spent, it should be furthering public
objectives such as those in paragraph 3.2. In more detail:
(a) while public benefits should be supported (where necessary) with public money, there is no
‘pot of gold’. Health and education rate higher and in general we should expect transport
users to pay their own way, including compensating for the disbenefits that their travel
imposes on others. Government and LA contributions should be for buying public benefits;
(b) we must shift users’ costs to towards ‘pay per’ for all modes (and payment must include
externalities). For car-users this means less on car tax and road tax and more on tolls,
5
capital spending runs at 1.0-1.2% of GDP compared with 0.6-0.8% in the UK, and revenue at nearly double
6
eg appraisal of transport schemes for public expenditure relies almost exclusively on effects within or very close to
the transport system. The broader questions of social polarisation and urban and regional change play no part.

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 congestion charges, parking charges/levy, fuel tax and road user charges, the mix depending
on efficiency/impacts and available charging technologies. This money needs to be
earmarked for transport at both local and national levels;
(c) we must get contributions to providing infrastructure (road and rail) from more of the other,
non-user, beneficiaries (eg land-owners, employers, developers, residents), as well as from
users and public funds. The current provisions (under the Transport Act 2000) for local
charges would need to be extended and additionality secured. Innovative money raising
linked to the increases in property values crreated by transport should be explored;
(d) in rich regions and areas we should expect more of the money for investment in transport
infrastructure (road and rail) to be raised locally. The quid pro quo politically is that there
must be greater regional and local autonomy about how it is spent. Central and local
government should share costs according to the balance of local/national public benefits.

Devolving responsibility and creating real integration

6. Transport planning needs to be done in a different way from at present. Within clear principles of
subsidiarity, there should be (a) delegation of more decision-making and resourcing to regional
and local levels, (b) greater flexibility than at present to consider a wider range of transport
improvements, including management and service measures as well as infrastructure provision:
(a) The key elements of national road and rail networks and nodes should be defined by
Government in terms of their functions in supporting the national objectives set out above.
The Government should state its strategic intentions for improvements on a 10-15 year
timescale, the price framework for road and rail use and the resources it intends to apply
from central funds over the next 5 years (including resources for the purpose of correcting
regional imbalances);
(b) Regional Spatial Strategies should be within national policy guidelines on issues such as the
distribution of population between regions and the balance between urban renaissance and
greenfield development. The RSS would include a broad transport strategy, integral with
regional strategies for economic and physical development. It would establish the regional
strategic transport networks and nodes (including the interface with the national networks),
the framework for road and rail user charges, local public transport accessibility standards
and car parking policies. The RSS should have ‘teeth’: money for Local Transport Plans
would depend on accepting the regional strategy as a discipline on competition between
local authorities for development;
(c) Transport improvements put forward by Regional Assemblies, local authorities or transport
operators (public and private) would have to be consistent with the national and regional
framework, and would need to secure funding from a mix of user charges, public funding
and contributions from other beneficiaries. Provided they were prepared to raise the money
from local sources, both local authorities and Regional Assemblies would be free to
negotiate contributions to bring forward or upgrade schemes proposed at a higher level.

Engaging public support

7. The central messages to the voter of the strategic approach described above are simple:
(a) You will increasingly have to pay for road space each time you take your car out; but
(b) Traffic will not grow as fast, so there will be less congestion when you need to use roads;
(c) The money will be put back into transport, so there will be real improvements in roads and
public transport alternatives;
(d) More of the money will be under local control, so you will have more say on how it is
spent.
8. This is a tough and unfamiliar message, and the detail and implementation will be difficult. It is
going to take a long time to sort transport out, and things will get worse before they get better.
People know it is not going to be easy, and we must level with them. The story must be credible
and clarity about values – especially fairness – will be crucial.

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9. Two key elements will be understanding, first, where public opinion stands and second, how far it
can be moved forward through discussion and understanding. Two processes will help in this:
(a) Opinion research can be used to explore the matters that the public are ‘experts’ on – their
values, what they experience as problems and (most importantly) what trade-offs they might
be prepared to make. Although essentially passive, opinion research is the starting point for
the active task of exploring value as perceived by different sections of the community.
(b) Public participation allows active public engagement where a need to resolve differences
has been demonstrated. The key techniques are about using the two-way flow of
information and opinion to explore the possibility of mutual adjustment of initial positions
through dialogue, and include focus groups, citizens’ juries, open forums, etc. The output is
a clear picture of how different groups value the different outcomes, and what compromises
they might be prepared to accept – all critically important to political decision-makers.
10. Because these techniques use a sample (ideally representative, but sometimes self-chosen), they
only show what people can be persuaded of. Any actual persuasion applies only to those involved
– the rest of the population will still hold their original views. Rolling out the conclusions is a task
for public relations and political leadership.

Appendix 1: Why isn’t present policy working?

1. The 1998 Transport White Paper proposed a new era of ‘integrated transport policy’, by which it
meant a better balance between the car and public transport and locating new development so as the
minimise the need for travel. The main innovation was to propose local authority powers to raise
money from local transport charges and to earmark these for local transport provision – a significant
victory over Treasury dislike of earmarked resources. Although widely welcomed for its broad
policy stance, the White Paper did not become legislation until 2000. At the same time the
expenditure moratorium (1997-9) meant that very little progress was made on public transport
improvements.
2. The powers given to local authorities to under the Transport Act 2000, to levy local transport charges
have so far only been taken up in London. This is not surprising since other cities lack an adequate
public transport alternative and risk diversion of development to neighbouring settlements;
moreover, there is no guarantee of ‘additionality’7. Similar disincentives apply to tough policies for
parking supply and pricing.
3. The Transport 10 Year Plan (July 2000) proposed £180bn of transport expenditure, but while roads
were overwhelmingly (84%) to be funded from public money, rail investment depended to almost
the same degree (70%) on private money. Since Hatfield private funding for rail has become highly
problematic, while the public funding for roads remains in place. Therefore the investment in rail
and roads are no longer in balance as proposed by the White Paper.
4. Transport funding has been oriented towards capital investment to the detriment of relatively low
cost schemes requiring continuing revenue finding. This disadvantages the kinds of bus service
improvements which are particularly relevant to excluded groups8 and is linked to the competition
rules consequential to the deregulation of bus services (outside London) in 1985.
5. The remaining plank of the integrated transport policy is using planning policy to reduce the need to
travel by locating new houses, jobs, shops and services near each other. But as we have seen,
locational choices and travel behaviour are driven by choice, not need: – people can and do drive
past the nearest opportunity to the one further away that they marginally prefer. In any case
businesses and households choose from the whole of the existing stock of homes, offices, shops and
factories, not just from the new9. The influence of this kind of planning policy on travel demand is
therefore minimal, and whether or not the growth is ‘balanced’ makes little difference. New
settlements are no more likely to have ‘sustainable’ travel behaviour than existing ones.
7
An LA raising money through local transport charges has no guarantee against losing conventional funding
8
See Social Exclusion Unit (2003) ‘Making the Connections: final report on Transport and Social Exclusion’
9
Change in the occupancy of existing property (‘churn’) is at least 10 times the volume of new development.

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6. There is a strong consensus amongst transport planning professionals that the problem of ever-
increasing demand for roads cannot be dealt with by any of the means currently being employed
within the framework of the Transport White Paper and the Transport 10 Year Plan:
• Increasing the supply of roads will merely fuel further dispersion and more travel demand;
• The benefits of local transport charges to LAs are not clear enough to outweigh the risks;
• The demands generated by the increasingly diffuse pattern of demand are not easily met by
public transport;
• Deregulation of buses inhibits low-cost solutions to the transport neds of many excluded groups;
• Co-location of new development has little effect on actual travel behaviour.

Appendix 2: Continental transport strategies – a different

approach
The extract below shows the different approach of continental transport planning10. Other studies show
how this is followed through in terms of institutional structures and responsibilities, and planning and
appraisal processes11
“A common thread through all the case studies was the degree of co-ordination in planning and funding
transport, particularly public transport, which is an important ‘background’ contributor to achieving
integrated transport policy outcomes, as well as being good practice in its own right.
The key essential features of the overseas approach are:
(a) Regional planning and coordination – to better integrate land-use and transport planning
and co-ordinate transport policies at the regional and sub-regional levels;
(b) A single public transport authority – responsibility for planning, co-ordination, tariff
setting and promotion of services;
(c) Funding – public sector investment in new infrastructure to encourage sustainable
transport and to provide revenue support for public transport.
(d) The key outcomes of this approach have been:
• Greater emphasis on transport in all regional and local policy making, particularly
on the location of development, leading to ‘compact city’ strategies;
• Higher density development located adjacent to public transport, or constructed in
parallel with new rail infrastructure (as in Munich);
• Mixed-use developments to reduce the need for motorised travel (all case study
areas, especially Barcelona); and
• Higher levels of use and satisfaction with public transport – through closer co-
ordination and integration of services and more modern infrastructure.”

10
Commission for Integrated Transport (2001), ‘European Best Practice in the Delivery of Integrated Transport –
Report on Stage 3: transferability’, report for CfIT by W S Atkins Transport Planning
11
Commission for Integrated Transport (2002), ‘Organisation, planning and delivery of transport at the regional
level’, report for CfIT by Faber Maunsell

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