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Paying for Road Infrastructure Investment

    Over the next five days, six authors connected with the CPS will outline a policy resolution they would like to see adopted by the government in 2013. Today, Lord Flight talks about funding new roads. Tomorrow's second instalment is written by Dominic Raab MP.

    There are roads all over the country, and, in particular, in the South East in need of capital investment. My favourite case is the A27 which should be at least dual carriageway through from Dover to Bournemouth. Through Worthing and, worst of all around Arundel, throughout the summer there are regular traffic jams. Now is the time to be getting on with such infrastructure investments but, in many cases, and as with the A27, there is no practical way of avoiding the State financing this.

    To help finance this, it seems to me reasonable to seek new sources of road related revenue. I cannot understand why the UK has not adopted the same practice as Switzerland where every vehicle using a motorway has to buy an annual sticker.  This applies equally to vehicles from abroad as to local vehicles. The charges might be of the order of £100 p.a. for cars and vans and £500 p.a. for larger lorries. This would have the added advantage of lorries (and cars) coming to the UK from Continental Europe making a contribution to the costs or our road network. It would yield a significant contribution to the cost of road improvements. Above all, the advantage would be that it would be simple – as in Switzerland, all you need to do is to buy your motorway pass and stick it on the windscreen. Any driver failing to display their motorway usage stickers would be liable to be fined by the police if caught.

    In a related area I also fail to understand why vehicles are not obliged to display insurance cover certificates on their windscreens. I accept some may go to the lengths of obtaining certificate forgeries, but with modern techniques insurance discs should be made difficult to forge. This would surely reduce the number of vehicles on the roads driving without insurance and the costs to, ultimately, the taxpayer as well as other drivers. Again, the requirement could be accomplished easily with motor insurers supplying insurance windscreen discs to their customers, upon their insurance renewals each year.

    What, however, really matters, particularly while there is slack in the economy, is to get a move on with the £200bn of road and communication infrastructure investment and £200bn of energy investment which the National Infrastructure Plan has identified.  Much of this can, moreover, be financed by Pension Funds, Sovereign Wealth Funds and international – including Chinese – banks, without straining the public finances, but adding a material stimulus to the economy.

    Lord Flight has worked in the financial services industry since the 1970s, starting at Rothschilds, before joining HSBC. He moved to Guinness Mahon in 1979 where he established the Fund management business which became Guinness Flight Asset Management in 1986.

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