What I wrote at Lib Dem Voice

February 22, 2007

Will the Lib Dems stick up for their own policy?

I’ve been biding my time on the vexed issue of road pricing. Not because I’m in two minds about it: road pricing is absolutely essential. As I wrote here, in June 2005, it “offers a new, and fairer, income stream to pay for public transport improvements; and offers government an highly elastic fiscal mechanism to regulate road capacity according to the local demand for it.”

No, this post has been in the pending tray because I wanted to see how long it would be before the Lib Dems remembered that our party supports road pricing (it was adopted by conference in Bournemouth in 2004). The answer was - almost a month.

I think it was the Telegraph which first picked up on the petition which propelled road pricing into the news: Half a million tell Downing St: Scrap road pricing plans (27th January).

Eventually, on 12th February, our Shadow Transport Secretary, Alistair Carmichael, issued a press release. Instead of setting out the Lib Dem view, he noted, “This response demonstrates the need for the Government to be open and honest with people about their plans for road pricing.” I think the word I’m looking for is pusillanimous.

To be fair, this statement was followed up yesterday, a mere 26 days after the story first broke, by a further, and slightly less equivocal, press release: “Tony Blair's email demonstrates a total lack of leadership. To convince the public of the case for road user pricing, he must give a guarantee that it will be a different tax, not an extra tax.”

Now this is an important point. Much of the protest from those opposed to road pricing has been generated by the view that this is yet another New Labour stealth tax. Such public scepticism is scarcely surprising given this Government’s record in fleecing the taxpayer on the sly. Lib Dem policy is to support a revenue-neutral switch from fuel duty - which we would abolish - to road pricing, with motorists paying to use road space according to when and where they are driving.

The policy was summed up pretty well by Tom Brake (then our Shadow Transport Secretary) in his 2005 speech to the party conference:
Road pricing is a fundamentally liberal policy. There is a value in ensuring freedom from congestion and pollution. There is a value in having liveable neighbourhoods and cities. …

Road User Pricing offers freedom, fairness and trust.

FREEDOM: from pollution, congestion and the effects of climate change.

FAIRNESS: by promoting a ‘fair tax’ instead of a ‘fuel tax’. Why is it that rural dwellers, where there is no public transport alternative, have to pay a lot more for fuel than in urban centres where this alternative actually exists. Road user pricing would reduce their fuel costs.

Research shows that under our proposal whilst congestion would halve, four out of five journeys would actually be cheaper.

And TRUST: By scrapping fuel duty you would decouple the cost of fuel from the tax that has to be paid. This would bring far greater transparency over what people pay to drive their cars.
He was also careful to dispel the civil liberties qualms that party members (understandably) harbour:
Let me lay to rest at the outset the concerns about a so-called ‘spy in the sky’. Passive technology means that civil liberties would not be compromised by road user pricing in any shape or form. The car would communicate with the satellite, but does not tell the satellite where it is. You are not being tracked.
Road pricing is a policy in which the Lib Dems have been ahead of the game, with Labour playing reluctant catch-up. It is a policy which utilises the market system to make better, more efficient use of resources, and which will improve the environment. A liberal, Liberal policy.

Which makes it all the more agonising that the party has ducked and covered for the past month, allowing the Government to take the flak for making a complete hash of putting forward a perfectly sensible policy. The Lib Dems can hardly criticise the Prime Minister of lacking leadership on this issue when we have shown ourselves to have absolutely no fire in our own bellies. This was a real opportunity missed.

PS: though the Lib Dem response to the road pricing controversy has been disappointing, we do at least have the right policy. The Tories’ backing of the anti-road pricing petition simply confirms something I have long suspected: they believe in the workings of the market only if they think it will profit them personally. And, of course, it shows - yet again - that their talk of wanting to improve the environment was never anything more than hot air.

16 comments:

Kendrick said...

What utter rubbish. Road pricing will do nothing for climate change - the same amount of driving will get done, just at different times of the day. Certainly replacing VED & fuel duty will mean that people will be able to drive as much as they like off peak without much monetary disincentive.

Scrapping fuel duty and replacing it with a magic box that ticks down your credit due to an enormous and complicated rule set is not more transparent than filling your car up with petrol and knowing how far you can drive on it. Nonsense.

And surely you and the Lib Dems in general must see how an initiative like this can be scope creeped into being exactly the kind of illiberal tracking monster that we're afraid of. All it takes is an Act of Parliament to change the law - we don't have the protection of a constitution.

Did you actually think about what you just wrote?

Mark said...

Some very clear points, which I don't substantially disagree with. However (you suspected that was coming)....

The issue is I'm not quite sure what we are trying to achieve. Are we rationing road space? In which case differential pricing of road space is a classic demand management policy - you price scarce cresources to balance supply and demand.

However the issue is often conflated with environmental policy. Fuel tax is also a tax on energy consumption - the more energy you consume - either by driving more miles or (crucially) doing them in an inefficient vehicle - the more you pay.

A differential road pricing would mean better congestion management - but could (probaby would) mean an incentive to move away from fuel efficient vehicles.

Two final thoughts - one way of addressing the equity issue would be to allow people so many "free" miles a year - you could even trade them.

The other is vehicle fuel is comparatively highly taxed in terms of carbon emitted. The road toll argment would be strengthened if supplemented by a carbon tax.

best wishes

ps - a declaration of interest - I drive a low energy vehicle

Stephen Tall said...

Kendrick - did you actually think about what I just wrote? I'm dubious, as your reply seems to deny any connection between congestion and pollution. Try reading this from the Adam Smith Institute.

Mark - if you offer some form of rebate on fuel-efficient cars (as you suggest), road pricing should make them even more attractive to consumers.

Tristan said...

We should promote it, but as part of a more general realignment of the tax system.
It must be clear it is not an extra tax, but a move of taxation.
It must also be clear that there is no scope for tracking of people's movements.

We should also be clear that the primary motivation is to tackle the problem of congestion (the cost of which dwarfs the estimates of climate change cost given by Stern).
I am opposed to giving low emission cars a discount on road use prices (especially considering that low emission vehicles often use electricity which needs to be generated - usually emitting CO2).

CO2 emissions should be taxed separately - at the source - so electricity generation is taxed, as are emissions from cars and planes (a fuel tax is probably the best method for the latter).

To do this we will need to reduce taxation elsewhere - reduction of income and corporation taxes (which are in effect an income tax), removal of road tax and vehicle excise would be sensible.

AnyoneButBlair said...

Stephen
A few points in response to your good article.
1) The government just does not have the political capital and trust to push such a scheme forward at the moment. Changing from Blair to Brown will not alter this (an may even make it workse!). People are genuinely concerned that it is just another taxation vehicle and those dependent on the car for getting to work, going to the shops, dropping the kids off at school fear the bills
2) The key flaw in the scheme is simple - the only way it will work is to price people off the road at certain times of the day. I'm an investment banker and will (unhappily) pay to drive my 4x4 at peak times. Those who survive on low income will be priced off the road. That doesn't sound very progressive and liberal to me!
3) The only way the technology can be made to work is through very costly and intrusive schemes. I am very familiar with the technology companies and system integrators in the frame for this and what they are proposing. It's not very civil-liberties friendly. Is that liberal?
4) How many children will die? I say this partly in cynicism. We fail to address the issue in the UK of getting rid of the change to daylight saving time because (allegedly) some school children may be killed in the darker conditions in Scotland. By the same token, if you force the cars of lowly paid people off the road during the school run, how may children will die?

I think your points go on to further prove to me that the Liberal Democrats are not that liberal.

Kendrick said...

Stephen, for a start that paper is clearly a dirty piece of pro-road-pricing propaganda that gives no space to any of the arguments against road pricing. If you have some more balanced and non-partisan documentation, you might want to link to that in future because - well, if there's a good reason for doing something, you don't need propaganda to sell it to people. See D^2's superb post with exactly this sentiment:

http://d-squareddigest.blogspot.com/2004/05/d-squared-digest-one-minute-mba.html

Sure, as the paper says, stopping and starting causes pollution. You know why? Because it involves burning petrol inefficiently. Do we already have (as the paper states) a road-maintenance-busting tax on petrol? Why yes, we do. Is it already directly correlated to the amount of pollution put out? Why, yes it is. What's the Lib Dem plan? Scrap it. That's why I don't believe that a congestion charge will be good for pollution. Further:

People have two enormous incentives not to sit in traffic - one, because it uses up their expensive petrol, and two, because it uses up their irreplaceable time. But people still choose to do it. Doesn't that indicate that people are revealing a preference? That they would rather sit in traffic than the alternative. What are the alternatives again?

1. A mishmash of privatized bus services that never run to time, and don't take you either from where you want or to where you want, and don't go a particularly quick way to get to the place you didn't really want to be anyway. Largely, the only people who uses buses are those with no alternative.
2. A mishmash of privatized train services that never run to time, whose timetables are inconvenient and whose stations are spread so sparsely that it's almost guaranteed to require a drive to get to one. It's laughable to suggest, as the paper you link to suggests, that it's the variance in driving arrival time that people are put off the trains by - it's the variance in train arrival time. If the train runs at all, and if you can get a seat.
3. Park and ride schemes. The best one I've seen is the York one, instituted by the Lib Dems, I believe, which they are rightly proud of for virtually eliminating congestion in the city centre (I know, I used to live in York), in combination with pedestrianizing large slabs of it. Unfortunately, most park-and-rides don't seem to be run with anywhere near as much concentrated effort. However, you'll note that the one for York works very well. Without a congestion charge.
4. Car sharing. In my last job, I used to car-share four ways. It saved me about £60 a month, an enormous amount on my salary at the time. Bristol has a 2+ lane at peak times (dunno how they enforce this), and there are plenty of other initiatives for encouraging car sharing. Citycarclub seems to do a roaring trade in Bath and Bristol, and those are private companies (I believe - happy to be corrected), so clearly there's an active market for car-sharing. A congestion charge simply isn't necessary to encourage people to do this sort of thing. I suspect that the reason more people don't is that they are coming and going from fairly disparate locations, and even those who are travelling from nearby places to other nearby places either don't know each other or need the flexibility to arrive and leave work at different times. A congestion charge simply won't fix this.

If congestion was really a problem for companies, then there would be more companies operating flexitime schemes so that people can arrive at non-congested times. This is certainly the case with my current two employers. The idea that supermarket deliveries are affected by congestion is ridiculous - they don't resupply at peak times because of - duh - the congestion.

If you'd like to reply to the points raised in my *other* two paragraphs, arguably more important, about how road pricing would be both illiberal and less transparent than the current situation, I'd be interested in what you have to say.

Basically, I don't believe that road pricing will give us anything better than what we've got, if you factor in what we have to lose by switching. What is it that Daniel Davies says? Something like "the great thing about the status quo is that it's no worse than the status quo".

Kendrick said...

Also, what "anyonebutblair" said. I could comment further, but there are so many things wrong with road pricing that I'm not quite sure where to start.

ecofx said...

Kendrick: apart from sentence one (unhelful) and sentence two (the zero effect per se assertation is likely to be wrong), I agree with you.

That 2005 speech does make me cringe, by the way...
Ok, I've just gone back and re-read the original entry to try and find things which are not rubbish AND helful (the moaning about other parties might not be rubbish, but it's not helpful). In terms of actual policy content there is indeed not much I can support.

Mark: I agree with you too.

Stephen: the question of how much you thought about what you wrote invites you to look at your thoughts again, with some indicators in what Kendrick wrote.

Yes, there is a connection between congestion and pollution, but as it is not congestion alone which causes pollution, nor even half of it, switching from fuel duty to congestion charging is moving the charge AWAY from the cause. The definition of congestion is also going to be rather complicated, and driving outside congestion areas would be cheaper than now, with the difference being greater the more INefficient the vehicle. The lowest-energy vehicles could be made exempt within congestion, yes, but the incentive outside to be efficient would be less than it is now.

I agree there is a problem with people in the country living different lives from those in towns. There are advantages and disadvantages to both.

I believe fuel duty should stay and be higher than now. Everyone should have a carbon budget so that the higher price of energy and fuels would not kick in straight away, but at a point where people are being (wilfully)wasteful. Regularly being part of congestion would be made more expensive through these means too, albeit less if my car is fuel efficient. That would be a trade-off too.

As for trust, a massive lack of it doesn't help either, but policies should take this into account. When I put petrol in the tank I then know I can drive approximately a certain distance without being cheated on, or having every single move monitored. With some system decucting money or credits from inside a black box at the whim of the operating software and some faceless operator at traffic control, even that basic feeling of security will be gone, gone, gone. I understand the fears!

Kendrick said...

ecofx: thank you for your (qualified) support. I'd like to think that my first sentence, if you mean "Stephen, for a start that paper is clearly a dirty piece of pro-road-pricing propaganda that gives no space to any of the arguments against road pricing", I'd like to think it is helpful, and I'd like to explain why: the paper is published by none other than the Adam Smith Institute, who explicitly state that they are pro-free market. They were last seen publishing climate change denialists on their blog and deleting dissenting comments and trackbacks (reference: http://ibanda.blogs.com/panchromatica/adam_smith_institute/index.html).

Why should we trust anything that they publish? What is a seemingly rational Lib Dem doing linking to a blatantly rightwing thinktank for backup? Or, more concisely, why rely on evidence provided by people who lie? Are they not, in some manner, untrustworthy?

Take a look at this paper: it has no references to the statistics it quotes. The ones it quotes are hazy at best: "transport's share of CO2 emissions is over 25%" - no reference given, they could have just made it up. "Transport" indicates that it might include planes, boats and all sorts. I don't know because - duh - there's no reference. This isn't honest arguing, it's fundamentally dishonest.

As to your reference to my second sentence, I'm not entirely sure what you're referring to - could you enlighten me?

To toss another issue into the mix, does anyone else worry that the pricing of roads will become politicized, with the government of the day rewarding its voters with road price reductions?

Nathaniel Tapley said...

OK - one each way...

Kendrick - how do you propose that a government would reward 'its voters' with road price reductions. Unless you are also suggesting that the secret ballot is to be done away with, too...

SFT - What does this: "Why is it that rural dwellers, where there is no public transport alternative, have to pay a lot more for fuel than in urban centres where this alternative actually exists." mean? And why did whoever wrote it not feel the need to use a question mark? Rural dwellers do not have to pay a lot more for fuel, they pay the same price for more fuel, which is a fairly crucial difference.

Indeed, it's the kind of elision hoary old lefties like me make when we say that 'the poor pay more tax', and one of which your newfound friends at the Adam Smith Institute would probably not approve.

It's essentially, the same argument as: "Why should urban dwellers be forced to pay more for housing when the people who live in the countryside have acres of space?" Except, of course, in my example, they DO pay more. In Tom Brake's example they do not.

One oculd ask in response, why should those who consume more fuel not pay more than those who do not? Fuel tax ensures that they do.

Not that I've made up my mind on this one, but the arguments made here on both sides seem to be pretty poor.

Nathaniel Tapley said...

Fortunately, the muse of poetic justice was watching my sarcasm, and made me leave out a question mark of my own in my first paragraph. I'm a recalcitrant shit-heel, and I'm very, very sorry.

Sam said...

Lib Dem policy is to scrap fuel duty and replace it with road charging - thus replacing a charge which is proportional to the amount of CO2 produced by a car with a charge that, well, just isn't.

Very environmentally-friendly.

It also appears to be Lib-Dem policy to charge large amounts of road tax for large cars that are hardly ever driven, but no road tax for the econobox that does the school run every morning.

That would appear to make you, as a party, guilty of gesture politics and completely innocent of anything resembling joined-up thinking.

Kendrick said...

Nathaniel - in exactly the same way that the Labour government has been ensuring that key marginal constituencies now get more NHS funding. You don't need to know exactly who voted for you, just find the constituencies that did, or are likely to, and fiddle the numbers so that their road prices are cheaper.

Also, would you care to critique my arguments instead of simply saying "they're rubbish"? I suppose my two main points are a) abolishing fuel duty would remove a powerful disincentive for driving and b) the alternatives to driving are pretty awful at the moment. I wouldn't have thought that either of these views were particularly contentious.

Alex Kemp said...

A well made point.

They key issue has to be the taxation - an alternative tax not an extra tax. A fairer tax, not an extra tax.

Its absolutely right that one is charged firstly by the anount of damage caused to the environment and secondly by the convenience one gains by travelling on premium routes.

ecofx said...

Quite a lot of comments here now!

Kendrick: Unfortunately I didn't update the page while writing and actually meant your first comment right at the top. Then you squeezed in a comment while I was writing...

To add something newish: with revenue neutral reforms on normal tax there is something actually quite good (people working) taxed highly and something bad (pollution, mostly via energy use) which isn't. Here a tax switch is fine. This just doesn't work, however, for motoring where most of the tax is on consumption. It would be crazy to lower this and slap it on congestion instead.

The simple way of charging for congestion is to charge massively for all parking (including on private land) in the targetted area during certain times of day. Exactly which route was travelled into an area would also be irrelevant. Of course public transport would have to be massively improved before such steps were taken, but fortunately some public transport planning is so bad (B'ham city centre for example) that quite a lot could be achieved with a portion of intelligence rather than cash! But then again maybe cash is the more common commodity in some areas!

Kendrick said...

ecofx: ah, that makes a little more sense! I do start as I mean to go on, and hopefully that post and my subsequent ones have a good crack at dismantling the fairly flimsy initial post. Incidentally, I note that Stephen stopped commenting fairly quickly - whether this is because he has no way to refute the comments made, or whether he has simply moved on top other things (unlikely, considering how narcisstic I am about my own blog comments!) I do not know. There are certainly several comments awaiting Stephen's reply here.

Anyway, yes, onto the second sentence: whilst a little hyperbolistic, I honestly think that a (revenue neutral) congestion charge will mostly act as a displacement away from peak hours - so I won't go to the supermarket straight after work, I'll wait til 9pm. The school will change its opening hours so I'll drive my kids in at 7am then go onto my flexitime work and start at 8am, finish at 4, avoiding the traffic. I don't honestly think it will alter people's use of the car beyond that. As you say, public transport is so poor at the moment that there's little reason to use it.