Letter to the Prime Minister from the Secretary of State for Transport
Prime Minister
Thank you for your personal letter outlining the key challenges and opportunities for transport.
As you rightly said, transport has made good progress in recent years. Thanks to economic stability and a sustained period of record investment, we have addressed many of the problems of the past.
My challenge now is to set the framework to meet the transport challenges of today and tomorrow - for our economy, our society and our environment.
We need to build a transport system that underpins long-term economic growth and productivity. A system that gives people access to the employment they want and the services they need, as quickly and safely as possible. And we need to meet our environmental obligations, giving people real choices about the journeys they make, giving them more options for sustainable travel that reduce carbon emissions.
Supporting the economy:
As you know, Sir Rod Eddington is currently looking into how decisions we take in transport link into the UK's productivity, stability and growth, particularly in response to globalisation. In this context I am therefore pleased that he is looking at reducing the costs, delay and uncertainty within the planning system for major transport schemes, while retaining a thorough system with opportunities for participation that delivers effective sustainable development outcomes.
Rod's work will inform our long-term thinking across a wide range of transport issues and will be finalised in time for publication around the time of the 2006 Pre-Budget Report.
Tackling congestion:
Today there are 33 million vehicles on Britain's roads and that number is growing. We cannot simply build our way out of congestion, which is a key threat to long term economic growth, particularly in our towns and cities.
That is why, in my first week as Secretary of State I made it clear that I am personally committed in the months ahead to advancing the debate on road pricing from the "why" to the "how".
The public rightly want to see how road pricing could benefit them. I believe the best way to do this is to show it working in practice, as part of a wider package which would include complementary public transport improvements, as has been the case in London.
I have asked local authorities to come forward with proposals where demand management, combined with better local public transport, work together to tackle congestion in their areas. This work will be supported by up to £200m a year from the Transport Innovation Fund. Seven areas across the country are already keen to work with us, and I met with Greater Manchester leaders for initial discussions last week. I expect to receive the first scheme proposals next year, with pricing pilots going live as soon as practicable.
Alongside this, we are actively investigating the technical and policy issues necessary to make road pricing work in practice - and as part of our ongoing engagement with the private sector, we will shortly be inviting proposals for projects to demonstrate just that. We expect these demonstration projects will commence in spring 2007 and run for one to two years.
Connecting cities:
Our cities will continue to underpin economic growth in the regions. We need to make sure that all the elements of the public transport system, rail, light rail, buses, park and ride, work together for the benefit of local people and business alike.
To this end, last week I announced £244m of DfT funding to complete our manifesto commitment to provide £520m funding for the Metrolink tram system in Manchester. This money for both renewal and extensions will benefit up to 10 million passengers by 2021, helping to sustain Manchester's renaissance.
More widely, we need to continue to improve local transport governance. I will be discussing with Ruth how we can ensure that her forthcoming White Paper provides a framework within which local transport can maximise its potential.
And I will continue to work closely with Ruth, Regional Assemblies and local authorities to ensure that transport and housing strategies are properly aligned and investment plans underpin sustainable growth.
Buses have a key role to play, particularly for those who do not have access to cars, and especially where congestion is a growing problem. Over the coming months, I will therefore look at the existing arrangements for bus provision so that we can decide what needs to be done to get buses playing the right role in the future.
Delivering the Air Transport White Paper:
Air travel will remain essential to the UK economy and our long-term prosperity. Towards the end of 2006 I will set out progress on the Air Transport White Paper. This will include:
- Progress on delivering increased capacity at a number of airports, for example an additional runway at Stansted, as well as setting out how we will mitigate the environmental consequences of growth in air travel.
- Progress on developing airport Master Plans which make best use of existing capacity, whilst minimising the impact on local communities;
- Models of future noise and air quality at Heathrow in preparation for future public consultations;
- Key developments since 2003, such as the BAA takeover bid, and updated air traffic forecasts, reflecting areas of growth such as 'no-frills' carriers;
A long term strategy for rail:
Rail also has a crucial part to play in future economic growth. Britain now has the fastest growing railway in Europe, with more people now travelling by rail than in any year since 1946. It provides fast direct links between major city business districts. It gets millions of commuters to work every day and it carries over a third more freight than in 1997.
We have established the right structure for the industry, underpinned by stability and record investment - and this is already delivering results for passengers.
To demonstrate our commitment to stable long term funding for rail, I will publish a five-year operational plan and budget for the railway next summer. It will show the capacity we intend to buy and the performance and safety we intend to achieve in the next five years. And it will be agreed by the independent Regulator to be a costed and credible programme.
But we need to look beyond the next five years. There are three key long term challenges on rail. First and foremost, maintaining and improving performance and reliability. Second, planning for future capacity on the rail network against the backdrop of record growth in passenger numbers. And third, making sure that rail plays its part in our wider environmental objectives. So next Summer, as well as the five year operational plan, I will publish a White Paper setting out our strategy for the long term future of rail, which alongside investment in other modes of transport, supports economic growth.
A clear way forward on Crossrail:
We are making good progress on Crossrail, both in terms of the hybrid Bill currently before Parliament, and in developing the project. Public support for the project among key London stakeholders remains high, as the recent launch of a new Campaign for Crossrail by the London Mayor demonstrated.
As we approach Royal Assent, which I expect will broadly coincide with the 2007 Spending Review; we shall look to have made progress towards identifying an equitable funding solution for Crossrail.
Sustaining the environment:
The wider challenge posed by economic growth is of course environmental sustainability. Dealing with climate change is a key long term challenge for transport. It is not an optional extra. It is not something we can leave to future generations to sort out.
I believe that if we make the right investments - if we make the responsible choices - then we do not have to choose between a strong economy and sustaining the environment.
By putting record investment into public transport, £1.6 billion for local transport - up from £0.6 billion in 1998/9, coupled with developing a range of measures, called 'smarter choices', we hope to give people a real alternative to travelling by car. But we need to do more.
The principle that fiscal measures can play a part in achieving our environmental goals has been established: Graduated Vehicle Excise Duty and the Company Car Tax are now both linked to vehicles' carbon emissions. Combined these measures are expected to deliver reductions of 2.3 million tonnes of carbon in 2010.
Additionally, we will introduce a Renewable Transport Fuels Obligation, which means that five per cent of transport fuel sold in the UK will have to come from renewable sources by 2010. We estimate that this will cut carbon emissions by one million tonnes, equivalent to taking one million cars off the road, without stopping people from travelling. And in the Energy Review, published today we are proposing that the Obligation, after consultation, should be extended after 2010, provided some important conditions are met.
My Department is also pressing for a successor to the existing EU Voluntary Agreements with motor manufacturers on new car fuel efficiency. The UK will maintain our stance that all options, including mandatory targets, must be considered.
I will continue to work towards including transport in emissions trading schemes, in particular, including aviation in the EU Emissions Trading Scheme. We continue to explore options for the use of other economic instruments and reserve the right to act alone or bilaterally if progress towards agreements at international level proves too slow. In the longer term, we will ensure that inclusion of emissions from surface transport is given serious consideration in the review of the EU Emissions Trading Scheme.
Delivering better services:
Your letter highlights as one of the priorities for all of us the need to "sustain the momentum of public service modernisation". My Department and its Agencies deliver services directly to millions of citizens and businesses. I am pleased that the Department emerged as a leader in the cross-cutting "Transformational Government" agenda, which you launched last autumn. I am determined to build on that and drive it forward.
My priorities for the next few years include building on the success of Transport Direct in giving better journey information and driving forward the use of Directgov as the one-stop, customer-facing access point for a growing range of services. I am particularly keen to build on the rapid growth of car tax on-line, already one the Government's top e-enabled services with the potential to reach tens of millions of citizens. I have also asked officials to explore how we can extend our e-services to business, both reducing the cost and hassle of regulation and improving their experience as key customers.
This radical programme is not just about modernisation, cost-reduction and efficiency. It is also about giving citizens, businesses and our front-line staff direct access to the information and the services they need, at the time they need them.
Enhancing the Department's capabilities:
Delivering this challenging agenda requires a department with the right capabilities, commitment and a common purpose. I have a strong senior team, and I will support them in three key areas: firstly strengthening the Department's strategic capabilities, secondly, improving delivery, and third, in their continued efforts to improve leadership, so that we have the necessary capacity to deliver on our challenges into the future. This is a shared set of priorities that we will seek to deliver as we look forward to the challenge and opportunity presented by the Department's Capability review early next year.
Transport that works for everyone:
Transport matters to everyone in this country. It is our challenge and our responsibility to secure a modern efficient system that gets people from home to work and back again as quickly and safely as possible. A network which allows businesses to operate competitively enables goods to be transported swiftly and reliably and allows people everywhere to make the most of their leisure time, whilst always meeting our environmental obligations.
I look forward to addressing these challenges through my leadership of this Department.
I am copying this letter to my Ministerial team and to Sir David Rowlands.
July 2006
