Monday, March 23, 2009
Getting figures for government tax receipts is like getting blood out of a stone. (I may be about to demonstrate a reason why this is so.) I just about managed to extract some rough figures for Vehicle Excise Duty, the funky new name for what we laughably used to call the Road Tax. In 2004-05, the tax raised £4.75bn (pdf); the trail goes dead after that. (Seriously: the documents switch from deprecated to current, and VED is not carried over into the new documents. Spooky, eh?)Okay, so the "road tax" cost us £4.75bn. How much do the roads cost? Local councils are responsible for local roads, and that out of locally-raised funds, so we can ignore those and focus on the national roads. The Highways Agency spent £5bn (pdf, p. 82), but that figure needs a little explanation. The Treasury charges departments and agencies a notional interest rate on their assets, which are "lent" to them by the Treasury: in the case of the Highways Agency, that is chiefly the road network they maintain, and the Treasury charged £2.8bn. That's a fictional accounting number, so in reality, the Highways Agency only cost us about £2.2bn (even the HA discounts only the cost of capital charge), which is easily less than half the "road tax" receipts. The rate the Treasury used implied a capital value of about £80bn, a figure borne out by the balance sheet, which records a fixed asset value of £81bn in the previous year, and an uplift to £85bn this year.To sum up, road tax raises perhaps £5bn or so; the Highways Agency has assets of about £80bn, and cost us about £2.2bn last year. Numbers, numbers, numbers. Where am I going with this?Think the unthinkable with me for a moment. Sell off the motorway network to private companies. If the Treasury's estimate is fair, we would achieve about £80bn for the taxpayer in a one-off hit. And we can cut road tax, since the actual cost of the Highways Agency (£2.2bn) no longer exists, and the £80bn sale proceeds can be used risk-free to save something like £3.4bn by paying off government debt (£30bn in interest covered £700bn in debt, so £80bn of debt costs £3.4bn). In other words, I can find about as much savings as necessary in order to fund a tax cut of about £5bn.And what about the roads? People will be tolled for using the motorways, that is certain: but tolls are pay-per-use charges, so you will only pay for the motorways when you use them. Tolls will vary at different times of the day, so prices will reflect congestion levels: in that sense, it will be an automatic congestion charge. New roads will only be built where there is an obvious demand for them, since it will be private companies doing the building. Toll roads work well already: the M6 toll in the UK, for example, and even the French have a proposed toll tunnel in Paris, the A86W. But if a toll road will work well across one stretch, there is no earthly reason to think that the principle cannot, and ought not, be extended across the network. It will be more efficient, certainly; more transparent, by design; and in all likelihood, cheaper for the vast majority of British motorway users.