Westminster Blog

The coalition’s mid-term “mid-term” parliamentary programme – which is hogging the headlines today – may seem rather thin compared with the original coalition agreement of 2010, which ran into hundreds of pledges.

What’s striking is today’s PR stunt (sorry, renewal of political vows) also includes one or two areas where an agreement is by no means pinned down between the Tories and Lib Dems.

One of these is the attempt by George Osborne and others to inject billions of pounds into the road network, preferably by a privatisation of the motorways and trunk roads.

Instead the government will say that it will continue to work on a “feasibility study” to look at options on how to proceed.

(Although, there is nothing about road pricing in the written document – only in the verbal statements by Cameron and Clegg.)

The idea of selling the roads system to the private sector was announced by David Cameron in March last year and he said it could unlock “large-scale private investment” from around the world.

He authorised civil servants from the Treasury and the transport department, DfT, to examine ways to make this work.

But nine months later the idea has still not been nailed down.

The first question is why go through the complex palaver of doing this rather than just borrowing billions of pounds through gilts, which would be a much cheaper way of doing things than selling concessions to foreign sovereign wealth funds and institutional investors.

As if often the case (with PFI, and so on) the reason is that all of this cash would not end up on the government’s groaning balance sheet – even though the money would have to be paid back over decades like any other debt.

So what about the politics? The idea is in a coalition gridlock of the type experienced by many a UK motorist; not least because the history of attempts to introduce road charging in the UK have not been favourable.

Mr Osborne believes that the public could support paying to use existing roads, despite Britain’s endemic congestion, if it raised the prospect of major improvements to the network.

Behind the scenes, concerns have been raised by DfT civil servants and ministers while the Liberal Democrats have also refused to back the idea whole-heartedly.

Interestingly it is the prime minister who has made it even harder for the idea to fly. David Cameron, while attracted to the concept of getting more money into the network, has ordered that it cannot have any “losers”, creating a headache for those devising potential schemes. He has previously ruled out “mass tolling” or tolling existing roads, making the negotiations even more of a policy Rubik’s Cube.

Attempts by the last government to bring in road charging met a huge public backlash with one petition attracting nearly 2m signatures.

One government aide said that by announcing a new feasibility study ministers were not kicking the idea into the long grass. The announcement would see a “reaffirmation” of the desire to make the idea work, he said, as well as a timetable for drawing up more detailed plans and a public consultation.

However he acknowledged that Patrick McLoughlin, the transport secretary, was both keen to get more money into major roads but also aware of the potential for a public backlash.

“Someone as grizzled and experienced as him as a politician is not blind to the challenges that all of the various options could mean.”

Until recently, the front-runner for the road sell-off had been to introduce a new charge for using the motorways, while cutting the road tax for those only making short journeys on minor A-roads.

But officials raised concerns about how this would work across different parts of the UK, and how to deal with one-off users of the motorways. In theory a one-day charge could be introduced for users, but this would probably be used by millions of drivers as a cheaper alternative to the annual charge, the civil servants pointed out.

The feasibility study will therefore examine other alternative options to secure a revenue stream which would be used to pay back the private investors who would buy long leases on the road network. This could be on the lines of the water industry with operators for each different region.

But what are those alternatives? It’s not clear yet. One idea, which has been Lib Dem policy in the past, is to charge motorists by the amount that they use the main roads and motorways; but that doesn’t pass Cameron’s “no losers” test.