As hard as David Cameron tries to shed the Conservatives' image as "the nasty party", he can never quite shake off some of the Tories' atavistic instincts. One that has resurfaced with a vengeance over the past year is the deeply-held belief that the private sector can do anything cheaper and better than the public sector.
How remarkable it is that this belief has survived the catastrophe of the botched railway privatisation and the money pit of the "private finance initiative" (PFI). Yet for the past year the government has been pushing plans to increase private sector involvement in the National Health Service, over the objections of just about every health care professional in the land, and in recent weeks there have been reports that some local authorities are looking to outsource certain policing functions to private security companies.
Today David Cameron has opened up another front by calling for private companies and private capital to play a leading role in modernising the UK's ageing infrastructure, especially the road network. The Chancellor, George Osborne, has already expressed the view that pension fund cash could usefully be deployed into a national infrastructure fund, and has also been assiduously courting sovereign wealth funds, especially from Asia.
Existing highways could be leased to such investors on a long-term basis, with improvements and maintenance paid for out of existing road taxes; or private capital could be used to develop entirely new roads. Cameron is anxious to reassure everyone that he is not talking about imposing tolls on existing roads (though the words "just yet" hang almost visibly in the air); however, new roads or added capacity on existing roads would be fair game for charges.
This blog is not normally in sympathy with the self-interested whining of road users, but some of the numbers are pretty stark. Motoring-related taxes amount to over £40 billion a year, but the highways budget is only about £9 billion. Moreover, the share of UK motor fuel prices accounted for by taxes is the highest in Europe, and there are few signs that the government is willing to forego further fuel tax increases that are already in the pipeline.
There have been suggestions in the past that modern technology would make it possible to replace fuel taxation with a road pricing scheme, so that (for example) drivers could be charged more for using the busiest roads in rush hour. There's not much sign that Cameron's announcement is a step in that direction: instead, the motoring lobbies are probably right to see it as a scheme to get people to cough up even more for something they already pay for.
Let's remind ourselves of a couple of things here. First, all of the roadbuilding in the UK is already carried out by private firms; there's no cheaper or more expert supplier out there just waiting for a chance to get involved. Second, the government can borrow more cheaply than the private sector, so there is no prospect of reducing financial costs by involving private money, a point that you'd think had been proven many times over in innumerable PFI fiascos. (There might be a saving if there were some sovereign wealth fund out there prepared to put its own money into a project and take on the equity risk, but I'd be willing to bet next week's petrol money that there isn't). No, it all looks like another fire sale of national assets to secure a short-term financial gain: selling the furniture to buy gin. If you care to read more, take a look at this righteously angry piece from The Guardian's website, or this rather excellent analysis.
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