NHS and schools face winter crisis

Memorandum to Deputy Prime Minister (John Prescott), Secretary of State for Environment, Transport and the Regions.

Subject: Treasury's fundamental spending review

The merger of the Department of Environment with Transport puts us in the driving seat (pardon the pun) to deliver change. The policy should be driven by the need for changes in priorities with a revenue-raising bonus for the Treasury. Your integrated transport policy is the key to achieving the target of cutting greenhouses gases by 20 per cent by 2010.

The options: increases in the duty on petrol and diesel; higher taxes on company cars according to engine size; out-of-town car parks could be taxed or business rated to dissuade or curb car use. For: Ken Clarke has raised petrol duty by 5 per cent a year without a squeal. Against: it is regressive and hits the poor driver hardest.

Roads: moratorium on road building. For: it would save billions and please Swampy. Against: towns wanting bypasses would howl, so would the road haulage lobby.

Road tolls - For: a revenue-raising move to pay for road improvements. Against: it would drive traffic onto minor roads.

London Underground - should we sell it? For: could raise pounds 2bn, leaving the private sector to pick up the tab for years of under-investment. Against: Don't expect more than pounds 600m after the investment backlog is paid for.