February 06, 2003

Where will Ken's Congestion Charging scheme take us

Patrick Crozier | Best of Transport Blog | London Congestion Charging

What follows is the text of a talk I gave at the beginning of November 2002 to a group of fellow London libertarians on the subject of congestion charging. Having re-read it I can't say there is much I would change but I seem to have seriously underestimated both the amount of bureaucratic incompetence and the amount of charge dodging we are likely to see.

Before I forge ahead I should perhaps begin with a caveat. I am not really an expert on roads. It all started about the beginning of the year when I wanted to get in contact with a few people in the rail industry and felt that I might be taken a little more seriously if I had a title. I asked Brian [Micklethwait] if I could become the LA's Rail Spokesman but he thought it better if I call myself Transport Spokesman. "But I don't know a thing about roads" I said. "Don't worry about it" he replied "Make a joke out of it by saying you were forced in to it." So, here I am.

In February 2003 London will become the first major city in the western world to have a congestion charging scheme. A ring will be erected around central London. As cars pass through this ring a camera will record their number plate numbers. In order to avoid a fine drivers will have to either pay in advance or pay the same day. The charge will be £5. The charge will be levied from 7am to 7pm. Non-payers will be liable to a fine of £80, falling to £40 for early payment and rising to £120 for non-payment.

Congestion charging is an idea whose time has come. Or rather it is an idea whose time has come around again. Tolling, for that is what it is, is a old as the hills and is used to pay for bridges and tunnels the planet over. What is new is the idea of subjecting whole cities to the discipline. It has come at a time when old solutions to congestion, such as building roads have fallen out of fashion on grounds of efficacy and at a time of increasing environmental concerns.

The first scheme that I am aware of in modern times was in Trondheim, Norway. That was a fairly modest scheme - the aim was not so much to reduce congestion as to raise revenue for new roads. It is still there and it has been extended to other cities in Norway and seems reasonably popular, possibly because it has had little effect on the number of journeys made. It does, by the way, pay for new roads.

The biggest scheme in current existence is that in Singapore. It is an altogether far more daring proposition. Firstly, Singapore is vast. It has a population of 4m versus the 140,000 of Trondheim. Secondly, being the lovers of gadgets they are the Singaporeans were determined to implement a state-of-the-art scheme all of their own. In their system every car has an electronic box. Every driver has a card. It is a little bit like a top-up card for a mobile phone. You go down to the newsagent, top up the card and put it in your box. As you drive around Singapore you drive underneath gantries which record the fact (via your car's electronic box) and charge you accordingly. This charge varies according to which road you use and time of day. In comparison London's scheme is like something out of the Stone Age.

Not only has Singapore's scheme been on a vastly different scale and technological level but it has also been tremendously successful. I understand that congestion in central Singapore has been vastly reduced. One acquaintance tells me that a queue 100 yards long is regarded as a serious jam. Mind you, another acquaintance tells me that jams do exist and certainly wasn't about to extol its virtues.

He also tells me that there are other ways in which Singapore restricts car use. The main one is by the government deciding how many new cars are "needed" and auctioning off that number of permits. Hence a fairly modest car like a Honda Civic ends up costing £90,000.

The great advantage of London's scheme over what has gone before is that it does introduce at least some element of the price mechanism into the allocation of a scarce resource. It will force some people to ask themselves whether their journey at that time by that means is truly necessary. And for that reason (and pretty much for that reason alone) it should be welcomed.

The scheme's weaknesses, however, are manifold. This is not even a pseudo-libertarian scheme let alone a full-strength anarcho-capitalist privatisation. And it is precisely because it isn't that muddled thinking has been allowed to prevail and problems are likely to arise.

For instance, take timing. The morning peak ends at about 10am. No allowance is made for this. If you have been clever enough to arrange to start work when the roads are reasonably clear you get no credit for your ingenuity.
The scheme is very prescriptive. At the same time as introducing congestion charging, Ken is also increasing the number of bus lanes and stepping up the policing of them. To me that defeats the whole object. If the charge was any good then you wouldn't need special bus lanes because London's traffic, including buses, would move freely.

There are a number of exemptions. These include two-wheelers, vehicles which use LPG or have more than 9 seats and a few others. There is also a refund scheme for employees of the NHS and the fire service.
The charge also does not appear to be high enough to make sufficient of a difference. Although, it is a while since I last parked a car in London for a day, I seem to remember that it costs at least £20 to do so. On the internet I found one car park charging nearer £40 per day. OK, so most people have a company parking space but it is best to remember that a parking space also costs money to the company - a cost reflected in their rent. I would be surprised if it wasn't of at least the same order of magnitude. Now, for the vast majority of people who enter central London they will be availing themselves of one of these two options. £5 on top of this is not going to make that much of a difference. To some, for sure, but not for most. No wonder we are getting more bus lanes.

Strangely enough the £5 charge is substantially higher than that in either Singapore or Trondheim.

The real weaknesses of this scheme lie on the supply side. In a truly free market dyanamic entrepreneurs would think "Ah, here we have a lucrative market. Let's see if we can supply some more roads". So more roads would get built. Don't laugh.

In fact, it is perfectly possible to increase capacity without building new roads. People often complain about rat runs. I don't blame them under current circumstances. But imagine if nearby residents had a choice to either close the rat run or charge for it. Sure, many would say "Thanks but no thanks - I'll take my peace and tranquility" but many others would be only too pleased to cash in. This would also not appear to be an option.

It is a common complaint of the sheme's opponents that congestion charging will be good for the rich and bad for the poor. They're right. If other aspects of London's transport were left to the free market they would be wrong but they aren't so they're right.

What do I mean by that? Well, take for instance buses. In a free market there would be a bonanza. Not only would there be a newly created market for bus services as people were priced out of their cars but also bus services themselves would become a whole load more attractive as less congestion led to faster and more reliable services to say nothing of the potential of higher-class (for want of a better expression) services. But in London you can't just run a bus. Oh no. You have to win a franchise. And franchises are only awarded every so often. And they're highly prescriptive. You will run this bus at these times on this route charging this fare.

Almost exactly the same applies with black cabs although mini-cabs may be able to take up some of the slack.

But jitneys face a far worse problem. What is a jitney, I hear you ask? A jitney is a sort of bus but without either fixed stops or even a fixed route. Hell, even the fare is sometimes up for negotiation. Never heard of these? Well, that's not entirely surprising as they were banned in London and most other places in the 1920s after substantial lobbying by the bus companies. They could make an enormous difference, not only to passengers but also to the many not-so-well-off entrepreneurs who would be running them. But they won't be allowed to so yet another problem is likely to go unsolved.

To sum up, Ken's Congestion Charging Scheme will have mixed effects. The less-well off are likely to suffer. It will make getting around the capital slightly easier for the better off. It will introduce the principle of road pricing even if in a watered down form. The danger is that people will blame the problems that emerge on pricing rather than the many forms of supply side regulation which will be the real culprits.

Trackbacks

Price Roads! Cut Taxes!
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 ha...
Samizdata.net on February 14, 2003

Comments

Two things: firstly people behave very differently when they are spending somebody else's money to when they are spending their own. If the company you work for is spending forty pounds a day on a car space for you, that is very different from spending 5 pounds a day yourself, even if the cost of the parking space might be paid to you as a bonus if you don't have one. This makes no logical sense but people do behave this way.

Secondly, it is worth observing that what you describe as "jitneys" are extremely common in the third world, although they seem to have a different name everywhere I have ever seen them. In places like Indonesia, South African townships, and just about anywhere that a substantial portion of the economy exists outside formal regualations, they are omnipresent, and often the usual way that people get around.

Posted by Michael Jennings on February 6, 2003

Permalink
 
 IN BRIEF

November 23, 2004

'Captain commuter' wins Sydney a free day on the trains ...link
PCCC | Comments (0)

Darling's saver ticket for slow-train Britain - he's going to do everything but close them ...link
PCCC | Comments (0)
November 21, 2004

Tollroads Jamaican style - worth it if only for the pic of the toll plaza ...link
PCCC | Comments (0)
November 20, 2004

Postive externalities come to DC - sort of ...link
PCCC | Comments (0)

Railways safer than ever - says Christian Wolmar ...link
PCCC | Comments (0)

Is graffiti art? - LFTTR think the question misses the point. FWIW I think many artists clearly have a lot of talent and it's a shame they don't have an appropriate, nay, legal outlet. ...link
PCCC | Comments (0)

Book review - Subterranean Railway by Christian Wolmar ...link
PCCC | Comments (0)

One airline, 4 crashes, 8 dead: the real price of sugar snap peas in November ...link
PCCC | Comments (0)
November 17, 2004

British Transport Films Collection DVD Volume One - Surely a must for any transport afficionado. It will be released just in time for Christmas. ...link
MH | Comments (0)
November 15, 2004

Crossrail website ...link
MH | Comments (0)
November 11, 2004

Brake fault forces Virgin to cut speed on flagship tilting trains - you know, just for once it sounds as if the HSE could be right ...link
PCCC | Comments (0)
November 08, 2004

TV Alert "When trains crash", 1930 Channel 5 tonight. Talk about timing ...link
PCCC | Comments (1)
November 07, 2004

Ufton Nervet crash - 6 now confirmed dead ...link
PCCC | Comments (4)
November 06, 2004

One person dead as train derails ...link
PCCC | Comments (0)
November 04, 2004

FirstGroup wants to add the tracks to its trains - that's brave ...link
PCCC | Comments (0)
November 02, 2004

Car charge to rise to £6 ...link
PCCC | Comments (0)
October 30, 2004

Psst wanna buy a railway station? ...link
MH | Comments (0)
October 26, 2004

'Kart Vader' - He tears around Quebec City at 100mph. In a go kart. At night. Wearing black. And he films it. Spotted by Jay Jardine. ...link
MH | Comments (0)
October 24, 2004

The downside of auto-mobile bans - drivers text instead ...link
PCCC | Comments (0)

Councils ban shrines to road crash victims - a story that neatly combines both transport and the issue of the day: mawkish sentimentality ...link
PCCC | Comments (0)
October 20, 2004

The air hostess, the long hair and the sun roof - one of the more imaginative ways of staying awake at the wheel. ...link
PCCC | Comments (0)

Wheelchair-using MP travelled in 'cattle truck' - so, that's just the same as the rest of us then ...link
PCCC | Comments (1)

23 escape from burning train ...link
PCCC | Comments (3)

Wikipedia accuracy under fire - so, it's back on with the Glossary? ...link
PCCC | Comments (0)
October 19, 2004

Rail chief quits after four months - walking away from £130,000. Golly ...link
PCCC | Comments (0)
October 14, 2004

New comment on old posting - Tim Hall explains the story of the Highland Railway, its new locos and its soon-to-be-ex-Chief Mechanical engineer ...link
PCCC | Comments (0)

Out now: DVD version of leaves on the line ...link
PCCC | Comments (0)
October 13, 2004

New link - Transport Watch UK. Lots of facts, lot of comparisons. Doesn't look good for rail ...link
PCCC | Comments (4)
October 11, 2004

Take the car and save the planet - walking kills, apparently ...link
PCCC | Comments (0)

Hybrids better than the real thing - golly ...link
PCCC | Comments (0)

Don't invest in mega-projects - says Peter Gordon ...link
PCCC | Comments (0)
October 05, 2004

Prescott backs plan to reopen branch rail lines - well, he says he does ...link
PCCC | Comments (1)
October 04, 2004

New Glossary Entry - the Advanced Passenger Train ...link
PCCC | Comments (0)
October 03, 2004

People are building their own speed cameras - One fellow is even selling fully functioning ones ...link
MH | Comments (0)

Pendolinos and Voyagers may prove to be one of privatisation's disasters - says Christian Wolmar ...link
PCCC | Comments (11)

Omedetō gozaimasu! - Tech Central Station on the 40th anniversary of the Shinkansen ...link
PCCC | Comments (0)
October 02, 2004

Compulsory purchase to go - in US? Johnathan Pearce has some musings ...link
PCCC | Comments (0)
October 01, 2004

Indian railway runs out of wheels - because it refuses to import ...link
PCCC | Comments (0)

All for sprawl - Tyler Cowen links to a couple of articles including one from the NY Times magazine which is attracting a lot of attention ...link
PCCC | Comments (1)

Underground maps as art - according to Brian ...link
PCCC | Comments (0)
September 30, 2004

Recent comment - Uncle Roger on the difficulty in working out accurate subsidy figures ...link
PCCC | Comments (0)

Europe by train - Tim Hall on Stephen Karlson's adventures ...link
PCCC | Comments (0)

Carpool lanes = communist gulags - Tim Hall is beginning to get it, possibly ...link
PCCC | Comments (0)
September 29, 2004

P&O axes 1,200 jobs as ferry travel sails into past ...link
PCCC | Comments (1)
September 27, 2004

Hurtling towards a £7.6bn bill at full tilt - Alistair Osborne on the WCRM fiasco. Actually, I thought £7.6bn was on the low side ...link
PCCC | Comments (2)
September 26, 2004

A double-decked shame - RJ3 laments the passing of the Routemaster. It's those EU bastards, I tell you ...link
PCCC | Comments (0)

Tilting trains are rubbish - according to Ross Clark. Now he tells us ...link
PCCC | Comments (2)

Delays plummet by 28% - says Network Rail ...link
PCCC | Comments (0)
September 25, 2004

New glossary item - the Health and Safety Executive - in which I demonstrate my almost complete ignorance of this institution ...link
PCCC | Comments (0)

Scant improvement in train times - according to latest figures ...link
PCCC | Comments (0)
September 22, 2004

EU plan will hit safe women drivers - and it's all in the name of sex equality ...link
PCCC | Comments (0)

Unions gang up to demand railway renationalisation - they mean it isn't already? ...link
PCCC | Comments (1)
September 21, 2004

Top car makers support road-jam charging - Ford, GM, Honda, Daimler ...link
PCCC | Comments (0)

Journey times cut as 125mph tilting train sets record - after £8bn and the odd bankruptcy tilting trains that actually tilt are finally here ...link
PCCC | Comments (0)
September 18, 2004

ABD calls for environmental audit of public transport - all those particulates ...link
PCCC | Comments (2)

Camera Partnerships must come clean on real causes of accidents - says ABD ...link
PCCC | Comments (0)
September 16, 2004

The Green Quadratic - ASI paper on planning from 1988. Now available on-line ...link
PCCC | Comments (0)
September 14, 2004

Up with conductors - they're really good, you know ...link
PCCC | Comments (1)

Speeding Britons fined in car race to Spain - "Among the cars were Ferraris, Porsches and Rolls-Royces." ...link
PCCC | Comments (0)

MPs to lose free airport parking - oh, how my heart bleeds ...link
PCCC | Comments (0)

The case against driving licences - Paul Clark in Lew Rockwell ...link
PCCC | Comments (0)
September 10, 2004

Drivers trade privacy for insurance discounts ...link
PCCC | Comments (0)
September 08, 2004

Free mints infuriate delayed commuters - some even threw them away, ingrates ...link
PCCC | Comments (1)

Privatize the roads! Liberate the streets! All we have to lose are our parking tickets! - Anthony Gregory in Lew Rockwell ...link
PCCC | Comments (0)

M6 Toll hits 10m journey mark - er, about a month ago ...link
PCCC | Comments (0)
September 07, 2004

California high-speed rail plan - all sorts of claims being made but Peter Gordon doesn't like the precedents ...link
PCCC | Comments (0)
September 06, 2004

Swedish farmer fined 1,211 kronor for illegally parking a snowmobile in Warwick - Krister Nylander lives 205 north of Stockholm and has never been to Warwick. "They can wait till Hell freezes over and I can get to Britain on my snowmobile to pay the fine.” ...link
MH | Comments (0)
September 05, 2004

"Obsession is not too strong a word to describe how railway enthusiasts feel about railways" - Matthew Parris goes to Peru and meets some trainspotters ...link
PCCC | Comments (0)
September 03, 2004

Hidden costs do not justify the level of tax on petrol in Britain - says Graham Seargeant ...link
PCCC | Comments (0)

Shovelling cash - utilities to pay for digging up roads ...link
PCCC | Comments (0)

Alistair Morton, builder of the Channel Tunnel, is dead ...link
PCCC | Comments (0)

Government 'willed' Railtrack to fail - says Corbett ...link
PCCC | Comments (0)

Cyclists saddled with seafront speed trap - in Bournemouth ...link
PCCC | Comments (1)

Historic Amsterdam tram photos Aaaah. Where's amg going to pitch up next? ...link
PCCC | Comments (0)

Why so little US electrification? - Tim Hall ponders the answer ...link
PCCC | Comments (0)
September 02, 2004

London Underground Map - as it really is. ...link
PCCC | Comments (0)

Electric v steam - in 1923. But who won ...link
PCCC | Comments (0)

Freight or passenger in the US? - they're in conflict. Stephen Karlson considers the options ...link
PCCC | Comments (0)
September 01, 2004

Fares and charge up in London - says Livingstone ...link
PCCC | Comments (0)

'Fair fines' planned for speeding drivers ...link
PCCC | Comments (0)

Railtrack is cleared over Hatfield crash ...link
PCCC | Comments (0)
August 31, 2004

Thousands 'ready to quit Aslef' - where would we be without brotherly love ...link
PCCC | Comments (0)
August 30, 2004

Rural watchdog attacks road sign blight - See it's not just me who can't abide the avalanche of street furniture. ...link
MH | Comments (0)

What the traffic will bear - Bob Poole discusses the merits of tolling ...link
PCCC | Comments (0)

Prague trams - photos. Aaah ...link
PCCC | Comments (0)
August 24, 2004

What if you can't drive? - Catallarchy's Sean Lynch considers the options ...link
PCCC | Comments (0)

97% of accidents within speed limit - according to the ABD ...link
PCCC | Comments (1)
August 22, 2004

Prosecute motorway lane hogs - says RAC ...link
PCCC | Comments (3)
August 20, 2004

Radio tags for congestion charge? ...link
PCCC | Comments (0)

World's longest road opens - in Russia ...link
PCCC | Comments (0)

Sprawl is cheap - says Iain Murray ...link
PCCC | Comments (1)
August 19, 2004

Strike threat to BA and Eurostar ...link
PCCC | Comments (0)

Toll roads are safer - at least according to my reading of this Marginal Revolution post ...link
PCCC | Comments (0)

Peking metro to hit 1000km mark - I'm not sure even London's is that long ...link
PCCC | Comments (0)
August 15, 2004

Squander Two calmly talks about speed cameras ...link
MH | Comments (1)

Parking anarchy in St Albans - Police withdraw traffic wardens, Herts council won't have any until October, it's bedlam! ...link
MH | Comments (0)

The future of transport - as seen from the past ...link
PCCC | Comments (0)

Trains less efficient than cars - yes, I know, it's old news ...link
PCCC | Comments (0)

Ferry solution, please - Eamonn Butler wonders how you could introduce competition to a subsidised ferry service in the Western Isles ...link
PCCC | Comments (0)
August 14, 2004

Drink less, speed less, save on insurance - Marginal Revolution has the story ...link
PCCC | Comments (0)