The full text of Alistair Darling's statement:

With permission Mr Speaker, I would like to make a statement about transport strategy. 

Today I am publishing a White Paper which looks at the factors that will shape travel, and therefore transport networks, over the next 30 years. And the White Paper sets out what we need to do as a country to enable people and goods to move around in ways that are consistent with our environmental objectives.  

So I want to set out the context in which we plan and the three things we need to do in response: First - investing in increased capacity for road, rail and other public transport  Second - measures to make better use of the capacity we've already got  Third - the need to face up to difficult decisions in order to plan ahead to meet the pressures we know we'll face in the future.  

So let me set out the context against which we plan. 

Mr Speaker looking ahead, the challenges we face are clear. By 2025 the population is expected to increase by 4.5 million people to 64 million people. As the economy continues to grow, and with increased prosperity, we will want to travel more and the demand for goods from all over the world will grow. 

More than that, people are travelling longer distances - for example whereas in the past people tended to move home when they changed job increasingly people choose to stay in the same place rather than to move nearer to their job. More people are travelling by air. Travel by train has increased by 25% in the last few years. And the huge increase in car ownership is putting growing pressures on our roads.  

Our job is to help people travel, not to stop them. The challenge for us is how we meet people’s need and wish to do so whilst meeting our environmental aims.  

So that's the context in which we take investment decisions. Let me now set out our investment plans for the future. Last week's Spending Review confirms our commitment to sustained high levels of investment in transport. It raises planned spending over the next 3 years from £10.4bn this year to over £12.8bn by 2007. That's 60% more in real terms than in 1997.  

Spending will be higher than the investment plans we set out 4 years ago. By 2010 we will be spending £1.2bn more per year than the Ten Year Plan envisaged. And as we promised, the White Paper today sets out planned spending showing that high level of spending will continue to grow by 2.25% in real terms to through to 2015.  

These spending plans allow us to set up a new transport fund, which will be used to plan ahead for change and innovation. To support and encourage local and regional transport strategies to tackle congestion in towns and cities. And it will ensure the contribution regional and local schemes can make to our national productivity is reflected in their funding. Details will be announced with next year's budget. 

Major investment in road and rail is already underway and will continue. Spending will rise to build the transport network we need. But cost control is essential. Railway costs in particular have increased dramatically.

So that even with Network Rail's intended efficiency measures, amounting to £1.5 bn a year, the Rail Regulator’s findings last year were that the railways require an additional £7bn - putting a huge pressure on my Department’s budget. But if we are to provide the transport for passengers and freight that we need, rigorous cost control is essential on road, rail - and, Mr Speaker, light rail.  

Light rail can be very effective in persuading people to use public transport. Since 2000 new lines have opened in Croydon, Tyne and Wear, Manchester and Nottingham.  

Manchester’s metro has been extremely successful. But plans for the extension have been dogged by successive cost increases. The central Government capital contribution rose from £282 million cash in 2000 to £520m cash in 2002, on top of which required annual central government payments have also risen from £5m a year in 2000 to £17m a year today - worth roughly another £150m. 

There's a similar pattern with the Leeds and South Hampshire tram proposals. In Leeds the Present Value of the public sector contribution was capped at £355m, but is now estimated at £500 million. And in South Hampshire, the original £170m Present Value is now £100m more. 

And in each case there's no certainty that costs won't rise further. The NAO was right to raise concerns; looking back over the last 20 years it has cost more to provide light rail here than elsewhere in Europe. 

No Government could accept these schemes as they are on the basis of these cost escalations. We cannot therefore approve them. We need instead to look urgently at how light rail could be made affordable, including the best approach for procurement. We will work with local authorities on the development of schemes, building on the recent NAO recommendations.  

The same considerations apply to Crossrail. Cost control will be essential. The case for a Crossrail link across London is clear and will get stronger as London continues to grow. But the plans need to be robust and value for money.  

That's why last year I asked a team led by Adrian Montague to review the business case for Crossrail. His report, which I am publishing today, makes clear Crossrail is needed, but that at a cost of £10 bn it represents a huge challenge both to deliver and fund. 

We intend to introduce a hybrid bill at the earliest opportunity to take the powers necessary for Crossrail to be built. At the same time, as the Montague report recognises, a major funding challenge remains. Government will need to work with the Mayor and the London business community to find a funding solution where everyone pays their fair share. This will include consulting on appropriate alternative funding mechanisms. 

Copies of the report and my detailed response are available in the library. 

Mr Speaker we believe that local decisions are best taken locally, and we intend to give local and regional authorities a greater role in deciding transport priorities in their areas, looking across all the transport network. To achieve this, we will set regional guideline budgets for major schemes next year and will set out guideline capital allocations to councils in the Autumn. 

But because of the timing of the Olympic bid I am today announcing the equivalent settlement for London. Transport will be crucial to a successful British bid for the 2012 Olympics. The Mayor is guaranteeing to fund and provide a package of transport improvements that will underpin the bid and provide lasting benefits for London. Details will be available in due course. 

I can announce that this will be supported by an additional £340 million Government funding above existing plans and Transport for London's prudential borrowing plans of a further £2.9 bn for the period up to 2009/ 10, which the Govt supports. 

Turning to the second part of our strategy. Increased investment needs to go hand in hand with measures to get more out of the capacity we've got.  

That's why for example we introduced the Traffic Management Bill to keep traffic flowing in towns and cities. Traffic officers, starting in the West Midlands, are now patrolling the motorway; their aim to keep traffic moving. We're considering carpool, lanes. And the reforms I announced last week for the railways will result in better management and increased reliability for rail. 

The White Paper sets out the measures we are implementing, including new proposals to help manage bus services. Because we need to make more effective use of buses to improve local transport in towns, cities and rural areas across the country. 

Mr Speaker the vast majority of travel by public transport is by bus. Nearly two thirds of all public transport journeys. 4 bn journeys last year. Many people depend on it. 

As I've said before where councils and bus operators work together in partnership bus use increases, and we want to see more of that.  

As I told the House last week, we intend to devolve significant powers and funding for rail to PTAs. But if we are to enable PTAs to make sensible decisions between rail, light rail and bus services, then they will need to have the power to guarantee bus routes, timings and fares.  

Which is why today I can tell the House that we will make it more attractive for authorities to introduce bus franchising through quality contracts in specified circumstances and approved by the Secretary of State. For example, as part of a congestion charging scheme. Or where authorities are deciding a new balance between rail and bus. As part of this we will streamline the statutory procedure for quality contracts, reducing the minimum period to implement a scheme from 21 to 6 months. 

And one advantage of our proposals to give local authorities the ability to take decisions about public transport in the round is it will reduce some of the revenue risk on light rail schemes. 

I now turn to the third part of the strategy - we also have to plan ahead for the pressures we know we'll face in decades to come. 

I confirm our commitment to implement the conclusions of the Air Transport White Paper.  

We also intend to take a long-term approach to port development and will publish a review of the policy framework for ports by the end of next year. And the White Paper also sets out a sustainable approach to freight. 

We also need to deal with the potential environmental consequences of increased travel. Substantial progress has been made. Cars and lorries are becoming cleaner and quieter.

So that despite increasing car use over the last decade, air pollution from road transport has halved.

But the White Paper looks at how we ensure transport makes its proper contribution to reducing CO2 emissions to achieve the Government's climate change commitments.

Supporting the development of low carbon vehicles and fuels including hydrogen fuel. And continuing to ensure the right tax incentives are in place to encourage the take up new technology and fuels. 

Mr Speaker, this brings me to what is perhaps the biggest challenge for all of us. Car use has increased and is likely to increase more. That has huge environmental and social consequences.  

As a country we have to face up to some stark choices. Looking ahead over 20-30 years we can't try to build our way out of the problem - the cost environmentally and financially is unacceptable.

Nor can we accept eventual gridlock - the inevitable consequence of doing nothing. Therefore Mr Speaker, we have to examine whether we can make use of new technology as it becomes available to make more efficient use of roads. 

As the House will be aware, in the next 4 years, we’ll be introducing charging for all lorries using UK roads based on the distance they travel.

Accompanied by a reduction in fuel duty, overall the UK haulage industry won’t pay more. And this would allow us in the future, for example by varying charges, to encourage lorries to use motorways at off peak times. 
Last year I set up a study - involving a broad range of motoring and environmental interests - to look at the feasibility of introducing road pricing for cars. This would mean moving away from the current motoring taxation system and introducing charges to use roads that vary depending on how congested they are. 

Today I am publishing the findings of that study. Copies are available in the library. It concludes that a national scheme has the potential to cut congestion by about a half as well as providing environmental benefits.

It says that road pricing is becoming technically feasible in the next 10 -15 years. But for a scheme to work it would need general public acceptance and a great deal of preparation work over a number of years. 

There is still a lot of work to be done before we could be sure if this could work. But one thing is clear, doing nothing would be the worst possible option. Of course we need to invest in public transport - and we are - but that won't be enough on its own. 

But if we are not bold now, we will be left behind when the benefits become possible. That's why I welcome this report. There needs to be debate about what would make pricing acceptable to motorists. We must build a public consensus around the objectives for road pricing and how to use the revenues.  

And whilst a national scheme is not yet feasible, undertaking road pricing on at a local level could be feasible now and the study says would greatly improve understanding of the benefits.

So we will to look at this further with local authorities. And also take steps towards international standards for the equipment. 

To duck this challenge now – to refuse to engage in the debate or to look at what new technology may make possible – would be irresponsible and would condemn future generations to endless delays and increasing environmental damage.

We need to rise to the challenge and have the courage to look ahead and plan for the future. Our future prosperity and well being depend on it. 

Mr Speaker, there is no quick fix for Britain’s transport challenges. The long-term solution requires investment and a willingness to face up to difficult decisions.

That's why we are making sustained high levels of investment and planning ahead to meet the needs of generations to come.  

I commend this statement to the House.