28 December 2008

The Manchester Referendum

A referendum was recently held in Manchester to decide whether or not to introduce a congestion charge and use the revenue to increase expenditure on public transport. We result was 78.8% against the plan.

I was pleased with the outcome of the vote, but for different reasons than a lot of the no voters.

I'm generally supportive of road pricing, so that part wasn't my major objection, although I wasn't happy with the proposed system of electronic tags and cameras, which would only add to the extensive web of state surveillance. There are much less invasive ways of pricing road use which I prefer, such as increasing fuel duty, privatising the operation of the motorways or a distance based "tax disc" system as used in New Zealand.

The part of the bid I really objected to was increased local authority control over the bus network. There are two basic reasons I disliked the idea.

The first is the libertarian freedom of choice argument. If person A is happy to provide a bus service and person B is happy to use it, then it shouldn't be anybody else's business, so long as the normal rules of the road are observed.

The second is the practical matter of heavy regulation not working in practice. It takes control out of the hands of the passenger and puts it in the hands of politicians, so the bus operators become less answerable to the person using the service, making the system less responsive, less efficient and more expensive. Supporters of heavy regulation often point to London as a success story, but when looked at as a complete picture, London's buses receive around £1billion of subsidy per year and are supported by a congestion charge which discourages car use, while Manchester's buses receive a fraction of that level of subsidy, but offer a service which, in my experience, is comparable in terms of quality and price.

Worryingly, there is now talk about how the passenger transport parts of TIF proposal can be advanced without the congestion charge. As far as I'm concerned, they shouldn't. The question in the referendum was "Do you agree with the Transport Innovation Fund proposals?" not "Do you agree with the congestion charge?" The no vote should now mean that all the proposals are scrapped. To push ahead with bus regulation now would be just as unacceptable as pushing ahead with congestion charging.

As an aside, I wasn't a fan of referenda before this vote and it hasn't done anything to change my mind, but I'll talk about that separately.


Mark Wadsworth said...

On a minor point, yes, London Transport is funded about one third from subsidies (not sure what the split between bus and Tube is) but - while I am against subsidies in principle - it is the very existence of public transport that makes London the conurbation that it is. Ergo, it is transport that maintains land values, ergo, if the subsidy were recycled LVT, then no harm done, as far as I can see.

Paul Lockett said...

I agree with the economics of recycled LVT, so long as the LVT captures the full value of the land, otherwise, part of the subsidy would be going into the pockets of landholders.

However, even if that were the case, I'd prefer to see the subsidy paid out as a citizens' dividend instead, so that the transport providers have to rely solely on the customer for revenue, rather than responding partly to the customer and partly to politicians.