Written Evidence. Strategic Road Network. Response from:

Transcription

1 Written Evidence Strategic Road Network Response from: British Vehicle Rental and Leasing Association River Lodge Badminton Court Amersham BUCKS HP7 0DD Contact: Mr Jay Parmar, legal and policy director Phone: Fax:

2 1. Who we are and what we do Established in 1967, the British Vehicle Rental and Leasing Association is the UK trade body for companies engaged in the rental and leasing of cars and commercial vehicles. Its members operate a combined fleet of 2.75 million cars, vans and trucks. BVRLA members buy nearly half of all new vehicles sold in the UK, supporting around 184,000 jobs and contributing more than 14bn to the economy each year. By consulting with government and maintaining industry standards, the BVRLA helps its members deliver safe, sustainable and affordable road transport to millions of consumers and businesses. For more information, visit Currently, BVRLA members operate a fleet of 2.48 million vehicles on lease. Average CO 2 emissions of a lease car registered in 2012 was 123 g/km, compared with the average of 151 g/km 1 for all vehicles on the UK s roads. This figure represents a drop of over 20% in co2 emissions in the past 5 years BVRLA members operate a fleet of around 270,000 rental vehicles, with the total UK market size estimated at 325,000 vehicles. The typical rental life of a car before disposal is seven to 12 months or 15,000 miles. BVRLA members handle around 10 million rental transactions annually As well as providing vehicles, BVRLA member provide additional services to their customers which include promoting low emissions vehicles as a means of reducing: their carbon footprint; personal taxation liabilities for employees; and, fuel costs BVRLA members also promote low emission vehicles as reducing corporation tax liabilities, improving the company s image and being at the forefront of adopting new technologies We estimate the total miles our member s vehicles are driven on the UK road network are 55 billion. We hope the above helps to clarify the vital role vehicle rental and leasing companies play in influencing the vehicles used on the UK roads. 1 Source: Defra/DECC s greenhouse gas conversion factors 2011

3 1.6. A functional strategic road network is essential for businesses in the UK, a recent survey by the CBI and KPMG 2 found that major pinch-points in the UK s transport system remain problematic, key outcomes from the survey included: 1.7. The quality of domestic transport connections makes a real difference to businesses: nearly 62% of firms surveyed said it had an impact on their investment decisions rising to 82% for large multinationals Businesses biggest concern is roads, with 73% of respondents seeing deterioration in local roads in the last five years and 46% seeing deterioration in the motorway network The top priorities identified by business to improve the road network are maintenance work and tackling congestion We believe the above results help to reinforce the importance of ensuring that the UK strategic road network is fit for purpose for UK businesses. 2. Specific questions 1. How will the policies set out in the Government s Action for Roads command paper improve the strategic road network for all road users, whilst also improving the environment? 2.1. The UK s motoring taxes are intrinsically linked to the environmental performance of vehicles. Greater vehicle efficiency will mean cars will fall into lower VED emission bands, which could result in 85% of new cars being exempt from VED altogether by 2030, and future fuel receipts will progressively decline. Indeed, a recent report by the Institute for Fiscal Studies found that the UK could potentially see fuel duty receipts falling from 1.8% of GDP in 2010 to 1% by 2030, with VED receipts falling from 0.4% of GDP to 0.1% over the same period. These projections anticipate a 13bn hole in the Treasury s finances a hole caused not by reduced car journeys but by increased vehicle efficiencies. Looking ahead, any new model for funding our roads will need to address this declining revenue. We have set out below some options which could be considered for plugging this hole. 2 Connect More CBI/KPMG infrastructure survey 2013

4 2.2. As we have highlighted above BVRLA members operate the newest cleanest vehicles on the UK roads. To help maximise the planned investment of 400 million to help encourage the uptake of new vehicles and the 500 million of additional capital investment we believe it is imperative that the Government consider more than just up front incentives for low emitting vehicles We believe that front end purchasing incentives, such as the current plugged in car/van grant may not be functioning effectively and in fact could be supporting falsely high list prices from manufacturers. An alternative that we would encourage the committee to put forward to the Department for Transport is a total life (for example 10 year) incentive for electric vehicles to support and incentivise the second and third purchasers of an electric vehicle. This would help support and create a healthy used electric car market. This will give more confidence for the first buyers, for example rental and leasing companies, to look at higher residual values if a more dynamic used market pull can be created In terms of the other key policies in the command paper we support the key areas of investment and reform. We believe these policies should provide a cohesive understanding for growth and transparency as to where investment will take place. It is key that any new network model, must meet the following user requirements: 2.5. Affordability: without motorists on the road, the network has no revenue stream. It is vital that a future roads system is affordable for all types of users. Road-intensive industries, such as freight and logistics, are of particular interest as they distribute goods up and down the country at all hours of the day. The industry runs at extremely tight cost margins, meaning that small increases to the cost of travel can have a significant impact. Any additional charges in the long-term, such as road tolls, or efficiency savings through better road connectivity and surface quality would have to be factored in. A future network must take a holistic view of taxes and other charges to ensure that the overall package does not have a disproportionate impact on frequent road users Interoperability: any network must be simple to use, providing ease of access with any charging mechanisms fully interoperable. Businesses do not want to have to deal with different paying mechanisms and different systems on a day-to-day basis. In France, a badge system has been implemented, whereby road users use various tolls with the same badge and receive only one bill at the end of the month. The French system is also flexible in terms of management. One regional operator may utilise a road toll, while another may operate availability contracts, similar to the UK s shadow toll roads, in the same region; however the motorist interacts with the network in a similar way in both regions. This balance of user and investor needs has been very effective, and France is now ranked first in the WEF Global Competitiveness report for the quality of its road infrastructure.

5 2.7. Quality: a road user paying motoring taxes and abiding by the rules of the road expects a good quality, well-functioning network to be provided in return. Any network especially one that charges at the point of use must therefore have a minimum service level guarantee in place. This would apply to the existing network and any new capacity built A future roads network must meet all needs: a model that satisfies users and attracts private investors. Much has been written by academics and industry experts on what this model might look like, but the debate has become mired in detail before the fundamentals are agreed. It is time for government to build consensus on the need for private investment and user-charging to deliver better roads. Once this consensus is reached, we would be keen to contribute on the practical implementation.we believe the Government is correct, the Government s Compensation Recovery Unit shows there were 347,740 motor injury claims registered in , 9 years later the same statistics show 828,489 motor injury claims registered for % of these are categorised as whiplash. This 120% increase in claims is despite lower vehicle traffic volumes in 2011 than in 2004, falling road usage and a 20% decrease in the number of injuries reported to the police in accidents during the period Non-motor claims, such as employer s liability and medical negligence, rose at a much more modest 21% over the same timeframe, meaning that personal injury costs have been growing at a far faster rate than costs associated with other liability issues. 2. How does the Government s policy for roads link with planning for other transport modes? How can we improve the reliability and efficiency of travel on the strategic road network? What impact will new technology have? 2.9. We would suggest that the committee encourage the Government to further look at options such as smart ticketing which would allow for links between transport modes. This concept should include looking at the role car rental and car clubs can play in being involved with smart ticketing. The Government should investigate the feasibility of using a portal approach for travel planning which looks at all transport modes and how they can link together. It should then allow the person travelling to book all transport modes in one go without the need to use different booking processes.

6 2.10. We believe that new technology will help to reduce vehicle ownership as people, in particular in cities, will look at a combination of transport solutions such as train, bus and car rental (either by the hour or day) to maximise all transport solutions depending on the purpose of the journey and time of day etc. The working being carried out by the Department for Business Innovation and Skills on smart cities could also be explored. This is looking at a Smart Transport System which enables people to take more control through informed choice of how and when they access transport, enabling the transport user to better manage their time, spend less time in traffic or waiting for public transport. A smart transport system is one which integrates information from different modes of transport, including trains, buses, and car rental, etc. It also facilitates the efficient movement of goods through a city, and ensures logistics do not become a burden on a city. A smart transport system requires control, operation and access to open data; it also requires people with the necessary skills to integrate disparate systems It therefore would make sense for the Government to focus on this type of approach of mixed transport solutions for motorists. This could include investment in smart ticketing across all transport methods or looking at how the road network links with other transport solutions such as railways We believe the committee should encourage the Highways Agency to look at the freight sector. They have recognised the importance of reliability and efficiency in their businesses. This issue came to the forefront several years ago with rising fuel costs. Empty running of vehicles is now at a minimum and route planning is now carefully thought out to keep fuel costs low. The type of technology used by the freight sector is likely to be passed on to all motorists, who will journey plan more effectively in the future. We would suggest the Transport Committee considers recommending further reforms to help reduce the costs associated with whiplash claims. This could, for example, be achieved by ensuring that a claimant is not able to recover damages greater than 2.5% of the Judicial Studies Guidelines for the most serious personal injury, unless a permanent and serious impairment has been sustained and can be proven. This approach would provide certainty and clarity for all parties involved. If there is a dispute then the small claims court provides a solution to bring claims to a resolution at a proportionate cost. 3. What mechanisms are there for Government to increase investment in strategic roads and attract new investors? Are there good examples from other countries that could be applied in the UK? The CBI Report Bold thinking: A model to fund our future roads has some useful ideas in this area which we would support. Specifically they state:

7 2.14. Investors have their pick of projects across the globe attracting them to UK roads requires a secure revenue stream and low risk exposure The CBI s recent report, An Offer They Shouldn t Refuse, highlights the attractiveness of infrastructure to private, especially institutional, investors. Infrastructure represents a relatively low-risk asset that can deliver long-term stable returns the perfect package for pension funds and sovereign wealth funds, for example. Existing roads are particularly appealing: the asset is already built and operational, but what we do not currently have is a mechanism to produce a funding stream for private investors In designing a new road funding model, both operational and capital investment for existing and new capacity respectively will be needed to sustain the UK road network. To attract investors to deliver this combination, we need a model that does two things: produce long-term stable revenue streams and provide certainty about future investment needs. With these boxes ticked, the risk profile of UK roads would be greatly improved. We believe the committee should encourage the Highways Agency to look at the freight sector. They have recognised the importance of reliability and efficiency in their businesses. This issue came to the forefront several years ago with rising fuel costs. Empty running of vehicles is now at a minimum and route planning is now carefully thought out to keep fuel costs low. The type of technology used by the freight sector is likely to be passed on to all motorists, who will journey plan more effectively in the future. We would suggest the Transport Committee considers recommending further reforms to help reduce the costs associated with whiplash claims. This could, for example, be achieved by ensuring that a claimant is not able to recover damages greater than 2.5% of the Judicial Studies Guidelines for the most serious personal injury, unless a permanent and serious impairment has been sustained and can be proven. This approach would provide certainty and clarity for all parties involved. If there is a dispute then the small claims court provides a solution to bring claims to a resolution at a proportionate cost. 4. How should the Highways Agency be reformed to make it the world s leading highway operator? What roles should Government and the private sector play to ensure better management of the strategic road network? We recognise the issues faced by the Highways Agency in stop-start funding, red tape, and a lack of clear objectives to be measured against. We wholeheartedly support the proposals to: give long-term funding certainty to the Highways Agency introduce a Roads Investment Strategy (RIS), setting out plans for construction and maintenance to 2021 and beyond guarantee the requirements of the funding settlement and RIS with legislation

8 convert the Highways Agency into a strategic highways company We believe the above will go some way to help maximise investment and ensure UK roads are invested in and managed to the benefit of all those who use them. 3. Closing Comments 3.1. We trust our comments will help to add value to the debate on the strategic road network. Should you require any additional information or clarification then please do not hesitate to contact us.