The above is also the title of a piece by Eamonn Butler of the Adam Smith Institute, about the principle of road pricing in the light of the London scheme (£5 per day) that is just about to come into force. I’m not such how long Eamonn’s piece has been up at the ASI website, but thanks to Alex Singleton for bringing it to my attention.
Like Eamonn Butler, I’m strongly in favour of road pricing, for all the reasons he itemises, and which I have been going on about for many years. But also, like Eamonn, and like Patrick Crozier of Transport Blog, I am uneasy about the effect Ken Livingstone’s London will have on this debate.
Eamonn and Patrick both fear the worst. Says Eamonn:
The London congestion charging scheme is a bad scheme. But if it fails, it will put back the debate on road pricing for another twenty years, until we’re all in an even worse jam.
I’m a pathological optimist, so discount the following if you aren’t, but I suspect that the logic of road pricing is so overwhelming, and the utter absurdity of any other road regime in places like central London – right under the noses of the people who will decide about the overall future of road pricing in Britain – so palpable, that there is nothing that even Ken Livingstone can do to stop this idea. On the contrary, the fact that he is at least attempting it will be what counts and what will get (is getting) the idea out there into the heads of intelligent people everywhere, and if the idea is regarded as not having worked for London, yet, the culprit will be identified as the way Livingstone did it, rather than the idea itself.
So what should have been and should be done about road pricing? The obvious place to start is the busiest motorways, because they’re busy, and because by their nature, motorways only have a very few entry points.
The simple principle to apply is: No payment, no passage. Clearly there would be a demand for payment systems that didn’t interrupt one’s journey, in the form of a kind of giant credit card attached to one’s car, or something similar. Once everyone had got used to it, the same gadgetry could then be applied to much more complex situations, like central London.
To invent an untried system from scratch for central London, which is what Livingstone has done, is asking for trouble. His scheme involves photographing every car that crosses the line, and then sending out bills, based on knowing who the owner of the car is from the number plate. Trouble is already guaranteed, in the form of all the Nigerians in our midst (from Nigeria itself and of the home grown variety) who are applying their minds to this arrangement. Having bogus German number plates ought not to make any difference to a decent road pricing system, yet suddenly London seems to have many more German diplomats than formerly.
I live just inside the western boundary of the London payment area. Big Cs have been appearing on all kinds of roads near me, and for a while I just thought that C stood for me being Confused. I still don’t know how it will all work, but will surely have stories to tell about it all, if not here then on Patrick’s Transport Blog, for which I also write occasionally.
As for the Cut Taxes! part of my title, and of Eamonn Butler’s, I think that’s trickier than Eamonn makes it sound. There are two ways to do road pricing. You can do it a bit at a time, which makes sense but which makes car use tax reduction decisions hard to make sense of, because you can’t reduce these taxes only very locally. Or: you can make a gigantic switch from free-at-the-point-of-use roads to priced roads, throughout the entire country, which would at least make tax reductions work okay and with reasonable justice, but which would be insane on just about all other counts.
That’s to assume, of course, that the politicians can be trusted to cut car use taxes in the first place, having introduced road pricing, which of course they can’t.
But even there, I am an optimist, in the sense that if all that road pricing means is a sharp increase in the price of motoring in certain places and along certain roads and nothing much else (the probable story), I think that would still be an improvement. Even that would be better than gridlock.
I’m afraid this will do to the reputation of road-pricing what California’s botched approach did to that of energy-liberalisation.
You call yourselves libertarians, yet you propose and agree with paying twice for the right to use the public highway, isn’t the RFL enough for you?
If folk want to use the roads then let them, if said roads then get too congested – too bad, said folk will OF THEIR OWN ACCORD find an alternative, they may even use – (Horror) – public transport – such as the Tube again.
You espouse letting market forces prevail, doesn’t the same principle apply to the use of the commodity known as a road (roads)?.
Road pricing is just another ‘hidden’ tax…..and as such is a bad solution to the problem.
Ernest
Brian’s too modest to point you to the relevant link, but take a look at: http://www.libertarian.co.uk/lapubs/econn/econn049.pdf for an entertaining and closely reasoned analysis of why road pricing and privatisation (if done properly) is a very good thing indeed.
The problem with Ken’s scheme is that it is rather like a State that has a monopoly on the production of potatoes. If the State gives the potatoes away for free, you end up with fat people who spend all their time in potato queues. But if the State charges too much then chips become a luxury item, and without a market mechanism, it is impossible to guess what the “right” price for potatoes should be. Also, of course, if the proceeds of potatoe sales are used to subsidise carrot production the quality and variety of potatoes won’t improve, even if the carrots (public transport etc) become a bit better.
It seems to me that the main advantages of Ken’s scheme are (1) people will get used to paying for roads so that if/when true road privatisation appears on the horizon, it won’t come as such a shock to our welfare-addled population and is thus more likely to be acceptable (2) if it is seen to reduce congestion, people may begin to make the link between paying for roads and getting a better product.
David
David
This is the perfect arrangement. I do include the link, but you complement me on my modesty for not including it, and include it again!
Not to seem ungrateful, but “going on about” (para 2) takes you to the same piece you mention.
And as you say, I don’t recommend us all paying twice, but I do think it reasonable to say that paying twice for a road you can travel on might be preferable to paying once for the privilege of getting stuck in a traffic jam.
Road pricing is not “just another tax”. It is a different and far better way to price the use of the road.
Plus, a point not often mentioned, roads are special, in that the queue to use the product takes place on top of the product and destroys it. Not even communist bread queues managed that!
Roads should be paid for with taxes on the sale of cars, trucks and gasoline, with no diversion to Toonerville Trolley schemes.
“Public” transit should be paid for with a combination of user fees and a tax on the businesses within walking distance of the stops.
If any toll roads or bridges are needed, let private business pay for them because they enhance the value of commmercial properties by bringing more people.
The first politician to try to sneak some highway monney into an alternate scheme should have his hide displayed on a signboard.
David,
Your response to my comment is nothing if not ingenuous. To compare the supply of potatoes to the usage of roads is, to say the least stretching things a little.
The roads have been there for centuries, people have built property adjacent to these roads, they are, in every sense “public’. To surcharge for their use is, in every sense an iniquity, and would do little to relieve congestion. It would be perceived as yet another government ploy to screw us for more cash. You will, no doubt be in the forefront to suggest a charge for using the footpath next!. Oxford St. might be a good place to start.
An alternative may be to restrict the number of drivers licences issued per annum, or to limit the number of new car registrations. Too unpopular – probably.
To privatize them would pose problems of assessing their intrinsic value, the true value would put them beyond the interest of any sane private concern, unless, of course, you were thinking that they should be sold to a ‘friend’ of the minister, at a discount, of course.
Charging tolls for privately conceived, constructed and financed roads, is a different matter, but charging for roads that have been public domain for evermore is really unacceptable. I have yet to see a toll road anywhere, that has buildings or property of any kind built along the road. Toll roads are O.K. for inter city travel, but not for intracity transport.
Comparing the road system to the rail system is also very misleading, the rail system was conceived and constructed by private enterprise, and was totally screwed by bureaucratic intervention and nationalisation, and is only an example of just what a stupid mess bureaucrats can make of any good idea.
I have printed Brian’s article on the private ownership of public space. Interesting, but so far, have found little evidence of a “closely reasoned’ argument in favour of road pricing of public roads, just a discussion of the means to collect such fees from a long suffering public.
I thought you folk were in favour of less government (whether state or capitalist), not more.
E
Edgar
I agree with you in part.
You raise (I believe) the question of whether charging to reduce congestion will produce a net efficiency gain. If not then (subject to externality issues), it is a tax, pure and simple. I confess I don’t know the answer to this question. However, I suspect that since congestion is already internalised to the road user, no efficiency gain can be expected in principle. So to that extent, you may be right (although I would be interested to know what any economists out there have to say on this question).
However, there are two further points which are not taken into account in your analysis. The first is that road usage undoubtedly does produce costs which are not internalised to the road user – e.g. noise, pollution, cost of road upkeep etc. I imagine that most economists would say that in those circumstances, a rational system would involve some level of charges so as to ensure that these costs are internalised to the user. This would basically be a variant of the “polluter pays” principle. Of course fixing the charge at the right level is hard, but that doesn’t mean it shouldn’t be attempted.
The second point is the question of whether the “supply” of roads (which includes quality, kind of roads, whether particular roads could be better put to other uses, upkeep etc) is best done by the State or by private enterprise. I suggest that if roads can be privatised, they ought to be because private enterprise is almost bound to do a better job at all aspects of road supply than the State. Of course this doesn’t necessarily mean more roads or even better roads (an efficient outcome might be fewer and worse roads), but it would definitely lead to a better allocation of resources. This is (I think) the thrust of Brian’s article and I remain of the view that he puts the case very persuasively.
As to the “true value” of roads etc, that’s a question of the mechanics of privatisation which raises other issues, unrelated to road pricing. Suffice it to say that whilst there certainly many examples of botched privatisation, there are also many examples of (relative) success.
David
Ok