04 October 1991 - 06 October 1991

Transport Policy in the 21st Century: The Quest for Coordinated Policies in the Light of Economic, Demographic and Environmental Factors

Chair: Mr John M M Banham

Transport (or transportation in North American usage) has been the subject of much discussion, in seminars, international bodies and the press. Nonetheless as this meeting turned out, there is advantage in attempting to consider the issues in a comprehensive “inter-modal” way, with a mixture of decision-takers and academics. We were fortunate in welcoming just such a group to Ditchley. The point was made in the course of the meeting that to serve this end, a better division of labour between the three working groups might have been: urban transport, long distance passenger and long distance freight, rather than, as we had, air, road and rail/water. Nonetheless we were able in the final debate to bring the three modes together.

Transport must be seen as a means to an end, the movement of goods and people. Demand, with rising prosperity, had enormously increased and while it might be possible to meet it outside cities by expanding facilities, in urban areas that was not possible. Some movements might be regarded as frivolous; but to the individual concerned they were important. The need was to make things better, not merely to allow congestion to act as a brake on demand. The measure should be the cost to the economy or the price the consumer was prepared to pay. This approach underlay everything that was said at the meeting: that the market should decide. But the market must be fair, reflecting the full true costs, not only the direct costs of operation and investment, but also the external costs of pollution, safety and the quality of life of those using the system (e.g. the frustrated driver or the delayed delivery) and those others affected by it, directly or indirectly (by enforced removal to permit construction or nuisance primarily caused by noise). Experience had shown that a reasonable level of compensation could go far to assuage the feelings of those affected outside the system (and by shortening the gestation period, could save overall costs): Britain was seen as being penny-wise, pound-foolish in this area.

Road transport, where congestion and pollution are most acute, especially in cities and their approaches, is usually advanced as the classic case of an industry which does not bear the full external costs, as compared with rail or air. There was some dispute about this. For example while the revenue raised from road users, whether in licence fee, fuel-taxes or tolls (and insurance was another cost), varied from country to country, it was generally agreed that in most countries, certainly in Britain, such revenue greatly exceeded direct spending on the road network. In the air it was felt that there was no parallel problem of congestion or pollution that could not be dealt with by larger aircraft, improved traffic handling and, if necessary in particular areas, the construction of new airports (congestion in the approaches to airports was noted but not addressed, though the point was made that in planning any facility it was essential to consider location (i.e. of shopping centres, schools or hospitals) so as to reduce the distances to be travelled by those frequenting them, and with airports, railway stations and ports that meant also convenience of interchange.

This discussion led to consideration of road pricing, an idea whose time, it was felt, had come, provided the public could be persuaded to see it not as an additional tax but as a direct contribution to improving traffic conditions. To achieve that, there was a strong case for hypothecation of revenue derived from road-pricing (perhaps with a reduction in other taxes) for road improvements, parking facilities and enforcement, despite understandable and rational treasury objections. The proposed Cambridge (UK) road-pricing plan was mentioned, and the difficulty of any experiment confined to one town. Other forms of land-use control might include dedicated traffic lanes (buses, heavy goods or high occupancy vehicles). Land-use control was also relevant for example when, after de-regulation, bus companies sold off bus stations and parked free in the street, causing congestion. Road-pricing it was pointed out would not be a new cost or inflationary: it involved merely a transfer of costs already borne elsewhere in the economy, “the internalising of externalities”.

Deregulation of both air and bus services figured much. The former was not expected to have such dramatic effects in Europe as in the US, partly because of the developed charter business. Despite the financial troubles of airlines, de-regulation had brought benefits in the US. However, it was argued that de-regulation of bus services risked leaving rural areas without adequate service, especially for the elderly or handicapped; and in the towns could produce an irrational network. Planning was necessary.

There was argument over whether high speed trains diverted passenger traffic from other modes. While, as with most other aspects of transport, experience in North America, where in general population densities were so much less, differed markedly from that of Europe, it was agreed that over shorter distances, e.g. Paris-Lyons, or New York-Washington, high speed trains were attractive and economic, besides being environmentally friendly in operation (though the infrastructure might cause initial problems). One possible solution to the railway problem was aired: the separation of the management of the track from the services running on it (in fact this will be the situation with Eurotunnel). Both could well be privatised. In Europe one fundamental need, if there was to be a coordinated transport system as the foundation of a truly common market, was standardisation of vehicle dimensions. There was also a need for a general removal of national restrictions on the free movement of transport vehicles, be they for passengers or freight, by road or rail.

Considering pollution, the conference was somewhat sceptical about the potential of technological developments to achieve the necessary reduction in emissions, given the expansion of car ownership that was foreseen, or indeed to contribute to the solution of other problems, such as congestion. There was a pressing need to develop an alternative to the internal combustion engine. As for aircraft, the point was made that while an individual aircraft was a major polluter (emissions and noise), the total number of aircraft in the world, even including military aircraft, was small in relation to the number of cars and trucks, so that total aircraft emissions were relatively small and getting smaller with improved, less noisy engines. However, the older, more damaging aircraft were being sold off to the developing world, with consequent continuing damage to the global environment. A ban on that trade would seriously affect the economies of the aviation industry which the conference did not seem prepared to accept. There would be massive growth in the use of road vehicles in the developing world as economies strengthened, and, for example, China would wish to continue to use coal-fired locomotives and power stations. While international agreements might constrain some damaging activities (e.g. CFCs), developing countries would not be easily constrained in these other areas.

There was some reference to water-borne traffic, a more important mode in continental Europe than elsewhere, some 30% of freight in Europe going by canal or sea, including coastal shipping. While there was strong competition between ports, water-borne trade did not bear the full external costs (though these were lower than with other modes). In planning ports, the interchange with other modes was crucial. Foreign shipping posed a potential safety problem.

In conclusion, the conference saw a need in many areas for some form of over-arching regional authority to exercise a strategic control over all the modes of transport within its region, presumably in close coordination with other regions - the New York Port Authority was cited as an example. It was recognised however that this ran counter to the general support for de-regulation and the market. Political leadership, informed by strategic thinking, was required. Public frustration with the present situation provided an opportunity. People would respond to leadership and would accept the measures that needed to be instituted, including road pricing, provided they saw real benefits that would flow. We ended then on a note of optimism which, I gathered, has not always been apparent in discussion of these issues.

This Note reflects the Director's personal impressions of the conference. No participant is in any way committed to its content or expression.

Chairman: Mr John M M Banham
Director General, Confederation of British Industry


Mr David Astor

Chairman, Council for the Protection of Rural England
Mr David Bayliss
Director of Planning, London Regional Transport
Mr Martin Bradshaw
Council Member, Royal Town Planning Institute
Professor Kenneth J Button
Professor of Applied Economics and Transport, Department of Economics, Loughborough University of Technology
Mr Raymond Colegate CBE
Managing Director, Global Aviation Associates Ltd
Mr Richard Ehrman
Director, Baylight Properties pic
Dr Philip B Goodwin
Director and Reader in Transport Studies, Transport Studies Unit, Oxford University
Mr Roger Higman
Transport Campaigner, Help the Earth Fight Back, Friends of the Earth
Mr Bill Morris
Deputy General Secretary (General Secretary Elect), Transport and General Workers’ Union
Sir Alastair Morton
British Chairman of Eurotunnel; Chief Executive and Deputy Chairman, Joint Eurotunnel Board
Professor David Newbery
Professor of Economics and Director, Department of Applied Economics, University of Cambridge; Fellow, Churchill College, Cambridge
Mr Derek J Palmer
Technical Adviser, Institution of Highways and Transportation
Mr Tim F Phillips
Director, British Motor Ship Owners Association (BMSOA)
Professor Tony M Ridley CBE
Rees Jeffreys Professor of Transport Engineering, Imperial College, London University
The Rt Hon Malcolm Rifkind QC MP
Secretary of State for Transport; Member of Parliament (Conservative) Edinburgh, Pentlands
Mr Garry Turvey CBE
Director General, Freight Transport Association Limited
Councillor David Weeks
Leader, Westminster City Council
Mr John K Welsby CBE
Chief Executive (Railways), British Railways Board

Professor John Helliwell OC

W L Mackenzie King Professor of Canadian Studies, Harvard University (1991-92); Research Associate, National Bureau of Economic Research
Professor Richard Soberman
Chairman, Department of Civil Engineering, University of Toronto; Director: Research, Canadian Transport Commission
Mr Peter C Wallis
Vice President, Government and Regulatory Affairs, Canadian Airlines International Ltd   

M Dominique Gazal

Senior Export Operations Manager, Societé des Autoroutes Paris Rhin Rhône, Paris
M Michel Walrave
Union Internationale des Chemins de Fer, Paris

Professor Dr Hans J
ürgen Ewers
Director, Institute for Transport Studies, Universität Münster
Dr Ingomar Joerss
Deputy Minister, Department of General Transport, Ministry of Transport, Bonn

Mr Ken Tamaki

Vice President, Management Information, Japan Airlines, Tokyo

Herr Helmut Lehmacher

Officer in charge of facilitation and special projects, Transport Division, Economic Commission for Europe (ECE)

Mr Robert Dunphy

Director of Transportation Research, Urban Land Institute
Dr John J Fearnsides
Senior Vice President and General Manager, Mitre Corporation
The Hon Ronald R Fiedler
Wisconsin Department of Transportation, Madison; construction engineer, Division of Highways
Mr Francis B Francois
Executive Director, American Association of State Highway and Transportation Officials, Washington DC.
Dr William J Harris
Chairman of Group V Council, a member of Group A Council, and a member of the Planning Subcommittee, Transportation Research Board, National Academy of Sciences, National Research Council
Mr Jerrold T Lundquist
Head, McKinsey & Company’s Transportation Practice and Aerospace Practice, focusing on airline, airport, rail, truck and transportation information clientele
Mr Robert H McNulty
President, Partners for Livable Places
Dr Richard Mudge
President and Founder, Apogee Research Inc, (a firm specialising in economics, finance and policy aspects of public works)
Mr Alan E Pisarski
Transportation policy adviser, Eno Transportation Foundation
Mr William J Rennicke
Vice President, (rail and transit practise), Temple Barker & Sloan Inc, (TBS), Lexington, Massachusetts; Vice President, Boston & Maine Railroad; Senior Consultant, Haskins & Sells; Operating Officer, Southern Pacific Transportation Company
Dr Clifford Winston
Senior Fellow, The Brookings Institution