BVRLA chief executive John Lewis has issued this comment following news that the General Election has failed to provide any party with an overall majority:
“It is unfortunate that we are left with a hung parliament. In this period of economic uncertainty the country badly needs stability and we hope the issue of who will govern the UK is resolved soon. Whatever form the government takes, its first priority will be to tackle the huge budget deficit.
“Doing this means that higher taxes and public spending cuts are top of the agenda. Unfortunately, transport will be an easy target. Whoever is in power, we must try and send a clear message that cutting large scale road investments and piling yet more increases on over-taxed road users would be just as damaging to the economy as raising business taxes.”
It is unclear which of the main parties will feature in the next government, but here is an outline of their key transport, business and economic policies together with some BVRLA comments:
Transport
Labour on transport
Tackling road congestion is a key Labour priority in their manifesto they have committed to:
- Extend hard-shoulder running on motorways, alongside targeted motorway widening including on the M25.
- Rule out the introduction of national road pricing in the next Parliament.
- Promote the rapid take-up of electric and low-carbon cars, we will ensure there are 100,000 electric vehicle charging points by the end of the next Parliament.
Comment
Whilst Labour has ruled out national road pricing this does not preclude local congestion charging schemes being developed.
Conservatives on transport
The Conservatives plan to appease all users of the roads by:
- Introducing incentives for electricity network operators to establish a new national car recharging network, making it much easier for drivers to move to electric and plug-in hybrid vehicles.
- Helping people to cut down on work-related travel through sustainable travel initiatives at a local level.
- Consulting on the introduction of a ‘Fair Fuel Stabiliser’ which would cut fuel duty when oil prices rise, and vice versa.
- Stopping central government funding for new fixed speed cameras, and switch to more effective ways to make our roads safer, including authorising ‘drugalyser’ technology for use in testing for drug-driving, in addition to cracking down on rogue clampers.
Comment
It would be interesting to know what the Conservatives have in mind for sustainable travel initiatives and how they would balance the Governments books with its fair fuel stabiliser.
Liberal Democrats on transport
The Liberal Democrats have a more radical approach they plan to:
- Switch traffic from road to rail by investing in local rail improvements, such as opening closed rail lines and adding extra tracks, paid for by cutting the major roads budget by £3 billion each year.
- Reduce pollution from vehicle exhausts through tighter regulation, with the aim to fully meet European air quality targets by 2012.
- Undertake preparations for the introduction of a system of road pricing which would be revenue neutral for motorists, and would see the removal of vehicle excise duty plus a reduction in fuel duty.
- Introduce a rural fuel discount scheme which would allow a reduced rate of fuel duty to be paid in remote rural areas
- Regulate the parking system to remove unfairness and stop private sector wheel-clamping.
Comment
Provided there is a clear deal for the motorist and the system of road pricing does not mean an increase in costs for the majority of users this could be seen as an improvement. But LibDem plans to divert road spending to rail seems unfair when you consider that 92% of passenger transport is by road By cutting the major roads budget and switching the funding to rail this is only helping 7% of those who travel rather than the vast majority.
Business/Economic Policies
Liberal Democrats
- Cut £15bn of lower priority spending to protect front-line services while reducing the structural deficit at least as fast as Labour plans
- Base business rates on site values rather than rental values. Make small business relief automatic
- Encourage regional stock exchanges to help business access equity
- Align capital gains tax to income tax rates to prevent people from having an incentive to present their income as capital
Comment
The LibDems provide a bit more detail on how they will cut the deficit, but, like Labour, will they act quickly enough? Taxing capital gains at the same rate as other income could be a disincentive to entrepreneurs and small business owners.
Conservatives
- Begin spending cuts in 2010 to eliminate “the bulk” of the UK’s structural deficit within five years
- Cut Whitehall policy, funding and regulation costs by a third, saving £2bn a year by 2015, and save a further £1bn by cutting quangos
- Reverse Labour’s planned National Insurance rise for anyone earning under £35,000 and raise payment thresholds
- Make small business relief automatic. SMEs to get £2,000 bonus for hiring apprentices and government contracts broken up to make bids from small business easier
- Cut headline rate of corporation tax to 25p and lower small companies’ rate to 20p
Comment
The Conservative’s speed in cutting the deficit may be good news, but not if it risks damaging the fragile recovery. We will have to wait for their promised ‘Emergency Budget’ to see where the spending axe will fall. Their National Insurance and business tax promises will be popular.
Labour
- Wait until 2011 to cut spending. Halve deficit between 2011-2014, but increase spending on frontline NHS services and schools
- Reject plan to separate banks retail and investment arms
- Increase National Insurance contributions by 1% from April 2011
Comment
There is little encouragement here in terms of reduction in business taxes or incentives for job creation. Like its rivals, Labour does not give enough detail on how it will reduce the current deficit, there are also concerns that it may not be acting swiftly enough.