Green 'tinkering' costs public £4bn a year
14 October 2009
GOVERNMENT intervention to try to force a green approach to transport and energy is costing consumers £4 billion a year and undermining economic growth, a think tank has argued.
A report by the independent group Reform suggests government interference has left the UK's transport and utilities infrastructure "creaking".
Private road and rail investments have been blocked by bureaucrats, while politicians have favoured grand projects that do not make economic sense such as high-speed rail and offshore wind power, according to the report.
The authors said that although the UK ranked sixth in the world for gross domestic product, it was 34th for the quality of its infrastructure.
Reform suggested this was due to too much "tinkering" by government, and instead of intervention and subsidy the organisation recommended a free market approach.
The organisation bemoaned the fact that the government will levy £2.8 billion on utility bills for new energy and broadband projects that were "uneconomic" and for "thousands of green jobs that will remain a pipe dream."
The report added that a further £1.3 billion will be spent funding this activity.
However, the real problems preventing private investment, which would not be addressed by this funding, were "planning sclerosis and over-zealous bureaucracy", it said.
Reform argued that the £4 billion a year being spent on green energy and broadband should be phased out, allowing for "a new culture of entrepreneurship in infrastructure" which would let companies build new road, rail and broadband networks, "repeating the success of low-cost airlines".
The authors said: "The most free infrastructure markets - energy, telecommunications and water - have been the most successful.
"The most heavily regulated - road, rail and renewable energy - have been caught in bureaucratic treacle.
"Politicians have favoured 'grand projets', such as high speed rail and wind power, instead of the roads and nuclear power needed to drive growth and reduce carbon emissions."
Reform's deputy director Elizabeth Truss added: "The UK is on a road to nowhere. Vast amounts of taxpayers' money is being spent subsidising uneconomic activity. Meanwhile positive investments are blocked."
A government spokesman said: "We do not apologise for pursuing policies that will reduce carbon emissions.
"Avoiding dangerous climate change means we must act, both in the UK and internationally, to reduce greenhouse gas emissions from transport and energy.
"We will do this by making low carbon travel a more viable and attractive choice within, and between, different modes of transport."
He said this inevitably meant major projects like high-speed rail, but he added that they were also spending £10 billion on targeted improvements to deliver a railway capable of handling more than 20 per cent more passengers by 2014."
GOING FOR GREEN: HIGHS AND LOWS
GOOD
The report listed five successes in the UK: The A1 Peterborough to Blyth. The M6 Toll Road. The London congestion charge. Smart electricity metering. The proposed Sizewell C nuclear station.
BAD
The report also listed five infrastructure failures:
Proposed high-speed rail plans. The failure to approve a freight railway from Liverpool to the Channel. Broadband roll out. Fixed water pricing. Offshore wind farms.
A report by the independent group Reform suggests government interference has left the UK's transport and utilities infrastructure "creaking".
Private road and rail investments have been blocked by bureaucrats, while politicians have favoured grand projects that do not make economic sense such as high-speed rail and offshore wind power, according to the report.
The authors said that although the UK ranked sixth in the world for gross domestic product, it was 34th for the quality of its infrastructure.
Reform suggested this was due to too much "tinkering" by government, and instead of intervention and subsidy the organisation recommended a free market approach.
The organisation bemoaned the fact that the government will levy £2.8 billion on utility bills for new energy and broadband projects that were "uneconomic" and for "thousands of green jobs that will remain a pipe dream."
The report added that a further £1.3 billion will be spent funding this activity.
However, the real problems preventing private investment, which would not be addressed by this funding, were "planning sclerosis and over-zealous bureaucracy", it said.
Reform argued that the £4 billion a year being spent on green energy and broadband should be phased out, allowing for "a new culture of entrepreneurship in infrastructure" which would let companies build new road, rail and broadband networks, "repeating the success of low-cost airlines".
The authors said: "The most free infrastructure markets - energy, telecommunications and water - have been the most successful.
"The most heavily regulated - road, rail and renewable energy - have been caught in bureaucratic treacle.
"Politicians have favoured 'grand projets', such as high speed rail and wind power, instead of the roads and nuclear power needed to drive growth and reduce carbon emissions."
Reform's deputy director Elizabeth Truss added: "The UK is on a road to nowhere. Vast amounts of taxpayers' money is being spent subsidising uneconomic activity. Meanwhile positive investments are blocked."
A government spokesman said: "We do not apologise for pursuing policies that will reduce carbon emissions.
"Avoiding dangerous climate change means we must act, both in the UK and internationally, to reduce greenhouse gas emissions from transport and energy.
"We will do this by making low carbon travel a more viable and attractive choice within, and between, different modes of transport."
He said this inevitably meant major projects like high-speed rail, but he added that they were also spending £10 billion on targeted improvements to deliver a railway capable of handling more than 20 per cent more passengers by 2014."
GOING FOR GREEN: HIGHS AND LOWS
GOOD
The report listed five successes in the UK: The A1 Peterborough to Blyth. The M6 Toll Road. The London congestion charge. Smart electricity metering. The proposed Sizewell C nuclear station.
BAD
The report also listed five infrastructure failures:
Proposed high-speed rail plans. The failure to approve a freight railway from Liverpool to the Channel. Broadband roll out. Fixed water pricing. Offshore wind farms.
@reformthinktank
