Manchester Confidential and the Conjestion Charge

Just posted the following Rant to Manchester Confidential, located here.

 

..“ On the Congestion Charge. It may have gone on too long, but the truth has yet to come out. Three brief points

1)The proposals assume accelerating economic growth for the region, with a lot of the new jobs concentrated in the City Centre. This was done pre-credit crunch.

2)The conjestion charge revenue increases of 5.5%; a year to 2041. There is a tax bombshell here.

3)The new bus services will only happen if they are commercially viable. The demand will not be there. Why? First there will not be the commuters. Second, the conjestion charge is less effective at causing people to move to public transport than assume. Third, the plans assume 55%; of those who do switch to public transport will use the bus. This is an exaggeration.

Caligula’s gender faux pas

Caligula’s Palace makes has a good analysis of the gender pay gap.

 

It has some goods comments about why men tend to have higher pay levels then women, some based on a recent paper on the subject by the Institute for Economic Affairs.

 

However, the analysis is let down by one comment.

 

“There are many more very very clever men than very very clever women, so that the aptitude for some very high paying clever clever jobs is skewed towards men.”

 

Anyone trying to defend the contrary view will point to this comment, say that the valid comments are biased and reject the whole argument. This would be a pity as much of the rest could aid our understanding.

The comment should also be put into context. The number of men with high IQs might be higher (I do not know). As Caligula’s Palace points out, men tend to be more driven and spend longer in the workforce. They therefore gain the experience necessary to gain the top jobs, as well as the stamina required. There are exceptions, of which the premier example of the last century was Baroness Thatcher, and the exceptions are becoming more frequent.

 

The New Campaign against Booze

A Home Affairs Select Committee has urged an end to happy hours and a minimum price for alcohol, according to the BBC.

 

The BBC’s Mark Easton, on his blog. tried to establish the link between price levels and consumption for various European countries. He then went to show a graph of the UK’s average alcohol consumption taken from a 2004 Cabinet Office Report. This is my posting

 

The figures for costs of alcohol should be measured against the per capita income. Norway may have the highest alcohol prices in Europe, but it is also has per capita income nearly double that of the UK. Relative to income alcohol is no more expensive than in the UK.

When considering putting the price of alcohol up, please also remember that it is inelastic with respect to price. That is a very large increase in price is needed to get a small drop in demand. It is thus a great way to increase tax , but a poor way to reduce consumption.

 

The graph of the last century of alcohol consumption is very revealing. In the early part of the twentieth century, the sharp fall in alcohol coincided with a religious revival and the temperance movement. It was started in the nineteenth century by organisations such as the Salvation Army and the Methodists. In other words, it was a massive cultural change, where it became socially unacceptable to even touch alcohol. The steep decline in religion in the post war period was accompanied by the rise in alcohol consumption.

 

Is this a fiscal solution being proposed to a cultural problem. The outcome of a minimum price will be monopoly profits for the supermarkets and the booze companies.

It is true that a lot of crime is committed by those intoxicated, but the solution is not to increase the price of alcohol. The solution is to change people. The Revival of the early twentieth century, (begun before the outbreak of the Great War in 1914) saw both a fall in alcohol consumption and a fall in crime levels, that continued through the Great Depression. But it was not lack of alcohol that reduced crime, but a common root in the Christian Faith.

 

 

Follow up Tuesday 11th November

 

The posting of yesterday failed to get through the BBC filters. Don’t know if was the positive message about religion, or the powerlessness of government. Let us see if this one gets through.

 

Mark Easton fails to pick up the most important point of alcohol consumption over the last century. It fell from 1900 to 1932, stabilised until around 1960, then shot up to around 1980. The government influences (licensing laws and tax rates) cannot account for these dramatic changes.

For this reason alone, changing licensing laws and imposing a minimum price will not have much impact.

 

Here is the graph mentioned in the above report.

 

 

 

 

 

Please tell me if I have missed anything. I remember (not personally, you understand) that the licensing laws were made more draconian during the Great War, which can account for some of the steeping of the reduction. Also, as men used to drink far more than women, and younger men more than older men the loss of nearly a million men, (5% of the adult male population) would account for some of the slide as well. But take the 1900 to 1914 trend through to 1930 and you still have a fall of over 50%.

 

 

 

 

Analysis of Tif Manchester “facts” on wevoteyes website

The Wevoteyes website has a page . It 8 facts listed, but no fictions. That is strange, but, in the interests of clarifying the debate, let us have a look some of the facts. If I get any of this wrong, please comment and I will clarify in the interests of obtaining an accurate picture of the proposals.

 

9 out of 10 people won’t pay the congestion charge when it starts in 2013.”

This should be clarified. It is the people in Greater Manchester who will not pay the charge (so excludes people who live outside the county but work in the centre). As minors or adults without a driving licence are also people, it includes them, but this is misleading. A more relevant figure is the families who have at least one regular peak-time driver. Or, to be political, the proportion of registered voters who will pay the charge.

 

“10 out of 10 will get a radically improved transport system across Greater Manchester.”

This is true. But the biggest and most expensive benefit – the metrolink – is localized to less than half the population. The most general benefit of more bus routes and more frequent services, is dependent on the usage. If they are not viable then they will be withdrawn by the bus operators.

 

This will only happen if you vote YES.

Again this is true. The package will be withdrawn. However, would the government cancel the biggest benefit – the metrolink, when they are trying to spend their way out of recession? Or, like the European Constitution, will it reappear in a modified form, or piecemeal by the back door? It may be better for Manchester if the plan is sent back to the drawing board, so that a more objective and balanced appraisal can be carried out. Please see the previous posting.

 

“Is designed to only hit traffic hotspots”

Using two peak time rings is an ineffective way of doing this. Some of the peak times are not dealt with, such as the afternoon school run (except for a few yellow buses). Some of the congestion in Greater Manchester is not touched, such as the Motorways, or outside the A6. Many of the worst places are at junctions, which will not be included. Also there is considerable seasonal variation. Car usage is higher in the winter, on cold wet days than in the summer. If there is a charge, this could exacerbate the variation as people try to reduce their costs. In other words, fact is just about the intentions, not about the outcome.

 

‘There’s no Plan B. If we vote NO in December the money goes back to Government, all £3 billion of it.’

This is mostly a more dogmatic re-statement. Also, it is a false statement, as the total investment is less than £2.8bn, including £313m for the congestion charge investment. The central government is only providing, £1.5bn of this, £1.2bn is to be funded by the congestion charge and £100m is from other sources. The full £2.8bn includes contingencies, so will only be “achieved” if there is an overspend.

Anyway, the full and permanent withdrawal of the £1.5bn funding may not occur. The Prime Minister, in a response to a question tabled by Manchester Withington MP John Leech, said If Greater Manchester came back with a revised proposition, we would need to assess it on its merits.”This is quoted from the Crains Business Manchester website

Update 24.05.2013

The “wevoteyes” fact vs fiction can be viewed at the useful wayback machine site http://web.archive.org/web/20081219082443/http://www.wevoteyes.co.uk/factvsfiction.aspx

“Wevoteyes” – No Costs and Questionable Benefits of Tif Manchester

The wevoteyes.co.uk website has totally ignored the costs has made some questionable claims of benefits of Tif Manchester.

I will deal with some of the costs that are left out, and then look at the validity of the claimed benefits. In so doing I hope to add to the understanding of the package, to get the best solution for society as a whole.

If I have got anything wrong please let me know and I will correct or clarify that aspect. If you disagree send in a (clean) comment and I will post it.

 

The Costs of Tif Manchester.

 

  1. The £1.5bn government grant is not a free gift. It costs the taxpayer and responsible government should show the stream of benefits exceeds this cost.
  2. People who continue to drive at peak times will pay the charge and thus have their living standards reduced.
  3. People who switch to public transport network to avoid the charge will have living standards reduced.
  4. People who aspire to use the luxury of car travel might have this opportunity cut off due to the charge. The Congestion Charge will create a Transport Poverty Trap. That is an income barrier to what many view as the more comfortable and convenient form of transport.
  5. A lot of the payers of the charge will live outside the Greater Manchester Boundary. This includes a disproportionate number of business decision-makers.
  6. Occasional peak time car drivers will have to pay a higher charge.  This may make Manchester appear less welcoming and more expensive to outsiders.
  7. A substantial portion of the revenue from the congestion charge will be from fines (towards the foot on page 3). It is the occasional travelers who will be hit hardest.
  8. The Congestion Charge revenues are planned to rise by 5.5% a year to 2041. Please find this on page 10 section 5.1 of the funding proposals at http://www.gmfuturetransport.co.uk/pdf/funding_080808.pdf. This could either be from increasing charges, or by having new charging areas, or by having a two-way charging, or by extending the definition of peak time.
  9. People living close to the boundaries may have parking restrictions outside their houses to stop people avoiding the charge. Those living by the interchanges, such as East Didsbury, may also be adversely impacted.

 

The Questionable Benefits

 

The six benefits of the Congestion Charge as listed at http://www.wevoteyes.co.uk/benefits.aspx. I quote them here, in italics, with comments below, as they appeared on Sunday 9th November.

“You may not have to pay the congestion charge but you will benefit from the £3 billion investment that it will deliver for Greater Manchester.”

One. There will be new and better bus routes right across Greater Manchester.

Two. There will be new and extended Metrolink routes to the airport and town centres across the city.

Three. There will be more seats on trains and better, safer stations and platforms.

Four. There will be integrated, electronic ticketing allowing you to travel affordably and easily, anywhere in Greater Manchester.

Five. There will be more cycling provision, yellow school buses, park and ride schemes and if you do drive, it’ll be a faster and quicker journey to work.

Six. Our air quality will improve and we’ll see a cut in our greenhouse gas emissions.”

It is not £3bn of investment. See my earlier posting as to why this is the case.

One. Maintaining those bus routes will depend on the viability of those routes. If there is not the forecast number of passengers then they will be withdrawn. The Tif Manchester proposals both over estimate peak time commuters and over-estimate the long-term impact of the congestion charge. As the bus is usually the slowest form of transport, then it will suffer most from these error estimations.

Two. The extensions to the metrolink is the major plank of the investment. There is a strong political reasons why I believe that this work will not be cancelled if the public votes no on December 10th. That, is statements made recently by the Chancellor of the Exchequer and the Prime Minister that they are attempting to spend their way out of recession. I do not believe that the government will cancel a major investment program with some known direct benefit for the economy, and then rush to make expenditure elsewhere. I think it would do long term damage the Labour party’s standing in one of their major heartlands. In the absence of a clear statement to contrary, it is safe to assume that this investment will not be cancelled, or even delayed.

Three. There is already investment in stations and in trains, as usage of the railways has been increasing. Unless the government categorically states that they will block any more investment if the bid is turned down, then we can assume it is not dependent on the bid.

Four. Why cannot they introduce this independently of the bid?

Five. The number of yellow school buses under the bid is fairly small. However, the leader of Stockport Council, Councillor Dave Goddard, has contested this number. For drivers, the benefits of traffic speeds will depend on how many other drivers abandon their cars for public transport. This is likely to be less than predicted, as blogged here. It will also depend on the reductions in road space for new bus lanes, (such as on Kingsway?), or the slowing down of traffic, (such as on the Mancunian Way), or the blocking of road at entry points to the charge zone (e.g. the North Side of Wilbraham Road?).

Six. The environmental benefits are likely to be small. The Tif Paper estimates this at £44m per year, but, this may be extremely optimistic and is unsubstantiated. The worst pollution blackspots may not be much improved until we abandon the dirtiest buses.

 

 

Follow up

 

Further to point two about the political reasons, please see the on Prime Minister’s response to a question by John Leech MP, as reported on Crain’s Manchester Business. Seems that there is a get-out clause, so a no vote will not mean “absolutely no new Metrolink”

 

Clarifying the Stockholm Experience

The South Manchester Reporter published an article in October on the Stockholm experiance of congestion charging (here). This was largely based upon the Manchestertolltax.com article.

There were those who doubted the effects of the Stockholm situation. I have written to the South Manchester Reporter the following:

Sir,

 

I would like to clear up a quibble concerning the impact of the Congestion Charge scheme in Stockholm. Andreas Krohn of the Stockholm Chamber of Commerce claimed that traffic volumes were 1% higher, whilst  Manchester City Council Leader Richard Leese claims there was a 20% reduction.

Both are right, as after 6 months traffic volumes were 20% lower, but after 2 years they were 1% higher than before the charge was introduced. A similar pattern occurred in London. The reason is that people view car travel as a luxury. The car is usually quicker and more convenient and more comfortable than public transport (when you include walking and waiting). Over time people will adjust their expenditure to afford that luxury.

In my view, to maintain the targeted reduction in peak time traffic of 15% to 20% would require huge increases in the charging rates from the current £5 maximum. This could be between £10 to £20 per day by 2020. That would be great from the point of revenue to pay for subsidies, but a massive reduction in living standards for those with no alternative but to drive.

 

The rebound effect, of people adjusting their expenditure to a new situation is something not taken into account by the forecast model. Instead it views people as automatons who react in predictable ways to changes in the environment around them. In the short term, statistically this may appear to be true, but in the longer term people adapt. This is a rich country, where most of the population are able to change their expenditure priorities in a response to changes in the environment around them. When new technology comes along many switch at great expense to that technology such as for iPods, DVD Recorders or Nintendo Wii. They also adjust their expenditure and lifestyle to changing conditions, such as finding a partner, making a family, (or to family break-up) or moving to a new job. Yet many of these people who have a large amount of income that can be moved between types of discretionary expenditure, may not find they have much available time. Working families for instance, whether with one parent or two, may value the extra time and flexibility that a car can provide in saving on childcare, moving the children to after-school activities, whilst trying to do a full-time job. Using public transport with its greater unreliability, inflexibility and (usually) greater travel time will cause problems. Even though the Tif package looks at these issues, the result of a congestion charge may significantly lower the living standards of these families, or cause the making of substantial sacrifices to quality of life.

Follow up – The above letter was published in the letters page of the South Manchester Reporter on 6th Nov 2008

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