How Labour failed its MoT test

Even before the fists flew, John Prescott looked like a political casualty. Transport has been his undoing. Just about everything that could go wrong did. The railways are in a state of semi-paralysis, only now beginning to recover from their worst ever crisis, caused by the Hatfield accident; roads are more clogged than ever; airport and runway space is running out; and, worst of all, no one believes it will get better.

The train crashes were bad luck. The rest, however, can be put down to timidity and the desire of Labour ministers to be all things to all people. Remember the talk of "integrated transport" and Mr Prescott's rash statement that would have failed "if in five years' time there are not many more people using public transport and far fewer journeys by car". It may only be four years but he has failed.

Indeed, he never really started. Once he was given the job of heading the department of environment, transport and the regions (DETR), Tony Blair ignored him. Mr Prescott's pro-public transport message was unwelcome at No 10. But transport suddenly moved up the agenda. The poor performance of the privatised train companies and the Ladbroke Grove accident in October 1999 forced Downing Street to take an interest.

Under the Tory spending plans Labour had stuck to, the railways had been starved of cash; economic growth ensured that road congestion continued to worsen. Stung by Tory taunts of inaction, Mr Prescott produced a 10-year plan which, he claimed, would bring about a staggering £180bn worth of investment.

It is this plan, announced last summer, that forms the centrepiece of Labour's transport strategy for a second term. Mr Prescott deserves credit for persuading the Treasury to look beyond its normal three-year horizon. However, as with all such grand-sounding schemes, the detail is less impressive than the headline figures.

First, the numbers relate to all investment, not just government spending. It is a bit like the government claiming credit when Easyjet buys new planes. Projected private investment accounts for £56.3bn, which leaves £125bn from the Treasury. But half of that is merely subsidy for the railways and routine spending on road maintenance, which leaves £65bn of investment over 10 years. Assuming the same inflation rate as the past decade gives a figure worth about £45bn at today's prices - not bad, but nothing special.

Moreover, there is a grave doubt whether the private sector component, which is primarily going on the railways and London Underground, will be realised. Railtrack was supposed to provide £8bn of the investment on the railways but the company has been so wrecked by Hatfield that it will never be able to raise substantial amounts for investment. Nor is most of the money for the tube's "public-private partnership" likely to come from private sources.

The plan's biggest fault is its lack of intellectual coherence. Mr Prescott's idealism in trying to shift people from cars to trains and buses, has disappeared. Instead, the strategy now seems to be to give lots of money to all forms of transport and hope that this will solve the increasing transport problems.

It won't. Indeed, transport could spell big trouble for Labour on every front. In rail, the privatised structure looks unlikely to deliver the growth Labour is seeking. Not only is investor confidence at rock bottom, but the Strategic Rail Authority, created to co-ordinate investment in the railways, has failed to live up to expectations. It is supposed to be re-franchising 25 services but so far has failed to get a single deal signed and has shown itself incapable of either developing a strategy or of understanding private sector needs.

While renationalising Railtrack has been ruled out, the state of a company that was supposed to be the engine of investment of the railways will have to be addressed by the incoming administration.

On the roads, protesters are flexing their muscles over the bypasses and other projects - Labour is now promising a bigger roadbuilding programme than even Margaret Thatcher considered. With increases in petrol duty seemingly ruled out, a sensible government would look at road pricing but Lord Macdonald, the transport minister has ruled out motorway tolls for 10 years.

It is not the motoring lobby that Labour should fear but a coalition of environmentalists and unlucky home owners with properties near the new roads - they united against Tory roadbuilding plans and managed to prevent their implementation. Labour's road plans are ambitious, all the more so given that former transport minister Gavin Strang told the British Roads Federation in 1998 "building roads will be a solution of the last resort".

The amount of roads spending in the 10-year plan matches that of the Tories in their heyday. Some £29bn is to be spent on widening motorways and trunk roads, and building bypasses. A host of sensitive areas will be affected: 28 sites of special scientific interest, eight areas of outstanding natural beauty and even five national parks.

Labour's roads programme flies in the face of advice from independent bodies that roads do not necessarily stimulate economic growth and will do little to tackle congestion. According to Professor Phil Goodwin, the £29bn for new roads will speed up inter-urban journeys on average by a mere second per mile.

Even the Treasury is aghast. Its opposition helped to scupper many of the Tories' road schemes and it has been pushing the DETR to implement many smaller local schemes, such as improving dangerous junctions and providing better cycle networks because these have been shown to be incredibly cost effective.

On aviation, there is the immediate problem of Terminal 5 at Heathrow and a longer term issue of where to get extra runway space in the south-east. The latter is a deeply contentious issue. Either there will have to be a deeply unpopular extra terminal or new airport, or there will have to be some sort of rationing by price. Labour managed to dodge this issue for its first term by merely preparing a consultative document but its white paper early in the second term will have to show whether it is bowing to environmental or commercial pressures. No prizes for guessing which way Labour is likely to go.

• Christian Wolmar's book on rail privatisation, Broken Rails, will be published by Plantagenet in the autumn.

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