£100 Billion Motorway Sell-Off Can Kick-Start the Faltering Economy
Privatisation of the motorways with the funds raised used to scrap fuel duty and road tax should be at the heart of an ambitious and radical agenda to kick-start the economy, according to a new report from independent think-tank Civitas.
The report by Glyn Gaskarth recommends the motorway be sold off and tolls introduced to raise up to £100 billion for the Treasury – money that should be used to slash the nation’s growing debt mountain as well as eliminating the need for motoring taxes.
The report says: “Our motorway network should be privatised and a toll system should be introduced.
his should not be used to increase taxes on motorists but to make them more transparent and effective. Road tax and fuel duty should be abolished to compensate motorists with oil distributors legally required to pass on the reductions.”
Other key proposals are an end to green energy surcharges on domestic and industrial bills and the merger of income tax, national insurance, and employers’ national insurance into a flat tax rate for all workers under 65 to simplify the complex and expensive personal tax system.
‘Government efforts to stimulate growth have failed’
In a 15-point blueprint for growth, Gaskarth advocates a cap on welfare increases at 2.5 per cent, cash windfalls to encourage people to back development projects and the creation of a British Business Bank charged with lending to small and medium-sized firms.
The report argues that Government efforts to stimulate growth have failed.
Some measures backed by Ministers, such as allowing poor countries to protect their local markets, pushing up the cost to business of fossil fuels, and applying anti-bribery laws to the developing world are actually hampering the UK economy.
“The Government gives the impression that deficit reduction alone will solve the UK’s problems. It will not.
“Britain needs to develop a clear plan which does not affect the rate of reduction in UK public expenditure but does increase the long-term growth rate of the UK economy.”
Gaskarth draws on recommendations from 14 groups from across the political spectrum, ranging from the CBI and the unions UNITE and UNISON to think-tanks and research institutes such as the Centre for Policy Studies, Policy Exchange and the Institute for Public Policy Research.
The 10 key steps back to growth recommended in the report are:
1. The UK should not exceed international regulatory standards unless the enhanced UK regulation can be shown not to damage UK economic growth. This rule should apply not merely to the scope of the regulation but also to whether competitor nations are effectively enforcing the rules they have signed up to. Areas requiring immediate reform include:
- The Bribery Laws which should be amended to exclude application to countries not in the OECD.
- Bank capital requirements which should be reduced to the internationally agreed standards to allow more lending.
- The Carbon Price Floor which should not be introduced.
2. Cease UK diplomatic support for trade protectionism against UK goods by Less Developed Countries and push for full market access as a condition of opening the EU market to these countries.
3. Cease the subsidy for green industry and develop a comprehensive energy policy to exploit UK potential in shale gas.
4. A British Business Bank should be launched using the funds from the Green Investment Bank, which should be abolished, and the sale of shares in UK state-owned banks. This new entity should be given the explicit function of providing funds to small and medium-sized enterprises denied access to private bank finance with private institutions being given the right of first refusal.
5. Reform the planning system to provide cash incentives to households affected by development to back construction, increase the thresholds those wishing to block planning applications must exceed and introduce reviews of the planning burdens imposed by each local authority with financial penalties for those which do not reduce regulatory costs.
6. Spending targeting should be adopted in addition to targets relating to the debt to GDP ratio and the elimination of the structural deficit to enhance the government’s deficit cutting credentials and ensure the UK government deficit is reduced on schedule.
7. The one-in-one-out rule should be increased to a one-in-two-out rule and extended to cover all UK regulation with no exemptions. Enforcement of the rule by all departments should be subject to an annual statement before Parliament with a new system of fines being applied to departments which do not implement the policy in full.
8. Cancel High Speed Rail and divert a proportion of this funding to improve the existing rail commuter links into our major cities, widen platforms, increase the number of carriages and cap fare increases and a proportion to make up the funding for a UK infrastructure bank taken from the Green Investment Bank which itself was raised by the sale of High Speed rail licences.
9. Privatise the existing UK Motorway Network and introduce a toll-based system combined with the elimination of fuel duty and road tax. Use the funds raised through privatisation to further reduce UK indebtedness and the income raised from taxing the new private entity to allow for the maintenance of the local road network.
10. Review the UK’s association with the European Union and negotiate the repatriation of powers to decide UK employment and social policies or withdraw from the EU.