Former minister issues five transport challenges for the next Government

Stephen MP
28 September 2014

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Former transport minister Stephen Hammond says George Osborne’s recognition of the importance of investment in infrastructure, particularly transport, will raise UK GDP for years to come. But for the full effect the next Government has to continue the campaign.

Transport and infrastructure are largely unsung when one discusses our Government’s achievements. Yet when history is written I suggest it will be seen as a policy area of achievement and success. This is partly due to attitude, partly vision and partly commitment.

"Under this Government, the DfT is rightly regarded as a key economic ministry."

Why attitude? Well if one is candid, the Department for Transport is usually seen as a departmental backwater. However it will be to George Osborne’s credit that he recognises the importance of infrastructure and its maintenance, its enhancement and its expansion as key determinants of economic prosperity.

So, unlike previous governments who took the easy option to cut spending on both infrastructure maintenance and new capital expenditure during difficult economic times, Osborne’s rejection of this easy option will raise the GDP potential of the UK economy for many years to come. Moreover under this Government, the DfT is rightly regarded as a key economic ministry.

Since 2010, the Government has provided two spending settlements for rail, monies for road maintenance and expansion and support for local public transport systems. New projects such as Thameslink, Crossrail, the Northern Hub, electrification of Great Western and London Midland, the new A14, fifty other road enhancement schemes, six major new road projects, the Green Bus fund and the Local Sustainable Transport Fund have all been either finished , started , in development or committed to.

In addition, the vision of High Speed 2 is becoming reality, the roads industry will be transformed by the Highways Agency becoming a GovCo and given a longer term funding settlement; and progress is being made on new airport capacity.

However in nine months time, the Coalition of 2010-15 will indeed be history. A newly elected Conservative government will face a number of infrastructure and transport challenges.

I have identified a few of the key ones

1 Reject the “British “disease;

The usual British response to finishing a major infrastructure project is to breathe a sigh of relief and do nothing for the next five years. Equally the usual response to maintenance and capital spending is either short term funding rounds or a stop/go mentality.

To secure all the benefits of 2010-2015 is to recognise as soon as one major project is finished, we should move to the next. Key tests will be can we move seamlessly from Crossrail 1 to Crossrail 2? Will the new Highways Agency Gov Co be guaranteed a four year funding settlement with all its attendant supply chain benefits? So reject the “British” disease and continue to invest, plan and expand.

2 The era of the customer

The failure to maintain our infrastructure for so much of the last 70 years has meant that much of the 2010-15 expenditure has been been driven by engineering priority.  If continued expenditure is to be supported by the public then the next few years must put the consumer at the forefront of the decision making process.

For example in the railways, ensuring Network Rail delivers more for lower unit cost will allow the cost to the consumer to be contained. Equally there are many small projects such as station improvements and there will be rolling stock decisions to be taken; which will drive the quality and comfort of the journey. There are other examples across other modes of transport.

3 The financing challenge

At the outset of this article I rightly praised maintained transport spending during difficult economic times. The next five years will also require some difficult fiscal decisions to be taken. Therefore we must make use of the private sector to realise our ambitions.

It is clear that there is much institutional interest in UK infrastructure projects and it will be fairly simple to structure projects and financing structures to meet their requirements.

However there are a number of other possibilities. For example, allowing the private sector to compete with Network Rail or the greater use of bond financing both project and municipal. Finally  there is the thorny issue of road pricing. But so many of us now live in the “ Sky” world not the “BBC” world where we decide what we subscribe to or buy, not a world where we pay and someone else decides, I believe this must be tackled and a politically and financially acceptable solution can be found.

4 The technology challenge

Technology is continually providing solutions to problems we thought insoluble a few years ago. A digital railway will allow more capacity and greater speed in the future. Driverless technology will allow lorry trains and ensure a better environmental performance from all motor vehicles.

I could go on but the next Government must commit to embrace technology, support R&D and help develop practical uses of the technological advances. In the past we have been far too reluctant to change and too slow to confront the “we have always done it this way” mentality. Now is the time to commit ourselves to be in the technology vanguard.

5 Ambition

I believe the Conservative achievement of deficit reduction and the encouragement of investment and industry is leading to a new “we can” belief and vitality.  We may have a wonderful and proud history but more important is securing a wonderful and proud future.

We could build HS2 to the North more quickly, we could embrace a non-fossil future for cars, we could build the London air capacity solution within seven years and we could develop more city mass transit systems. We could, I know we can. The only thing stopping us is a lack of belief or ambition.

Stephen Hammond is Conservative MP for Wimbledon and new member of the ACE Advisory Board. He was Transport Minister from September 2012 to July 2014.