Tuesday, 24 January 2012

Ground of Your Choosing: The Benefits Cap.

In battle, a successful commander will draw the enemy onto ground of his choosing. At this, Tony Blair was a master. By drawing the Tories to fight on ground, like Europe or the NHS, where they were weak, they were made to seem out of touch. The result was three election victories. Indeed New Labour's vilest policy, the plan to lock innocent people in gaol for 42 days before telling them what they were supposed to have done, was merely an attempt to discomfit the Tories. Propose a policy so vile that the Tories would have to oppose it, and then say they're "weak on terrorism". Of course that was a policy so vile even the lobby-fodder of the Labour party couldn't wear it and the Labour government went down to it's first defeat.

Yesterday, Labour, Liberal and cross-bench peers inflicted another defeat on the Government, by supporting an amendment exempting child benefit from the proposed £26,000 benefits cap. Let's not forget that a tax-free income of £26,000 is equivalent to you or me earning £34,000. You can support a family on a salary of £34,000 so I suspect the Government is delighted.

Who are we talking about? Mainly this benefits cap will hit people living in hugely expensive areas, mainly in London, who have large families. The elephant in the room is Housing benefit, paid directly to Landlords and inflating rents for the rest of us. Obviously people will have to move out of Hampstead, Chelsea and St. John's Wood to somewhere grotty in zone 4.

So you've had to move? This is the world's smallest violin & it's playing just for you.

The other group of people are those with large families. I think lefties will be surprised at how people who'd love to have three or four children and who don't because they simply couldn't afford to have them, feel about people who've never worked, pumping out kids on the tax-payers' expense. Most people feel we need to end the subsidy for people who've never worked to breed people who'll never work. In any case, you can bring up plenty of kids on a salary of £34,000. You just might have to move to a cheaper part of the country. A family of eight children could potentially forgo income of £5933.20 a year, equivalent to £8725 pre-tax & NI. So in essence, the Labour & Lib-Dem Lords want to pay £42,000 a year to people who've decided to make you pay for something many working people have decided they couldn't afford. Good luck selling that.

Working people on this kind of income, £34,000 a year, are called "middle class" often in a sneering way, and are not helped in any way by the benefits system. Indeed because I EARNED less than this in several previous tax-years, 6 of them, during which I held down 2 jobs while building a business, my Fiancee was denied any benefits at all when she lost her job. So what if people are forced to move to grottier areas of town? Working people have to do this all the time, when their income falls. So what if their kids have to move schools? My friends in the Army have the same problem. There are plenty of Private soldiers in the army dodging bullets in Afghanistan who have families subsisting on less. There are people starting businesses earning nothing who are nonetheless excluded from the benefits system. Do you think these people feel any sympathy for someone paid more than many people earn to do nothing?

The idea that an income equivalent to a salary of £34,000 "will thrust families into poverty" is absolutely abhorrent to the people who are forced, by the threat of expropriation and violence, to pay for it, people who are sneered at as "middle class". I would not be surprised if the Government quietly persuaded enough of its supporters in the Lords to stay away from yesterday's vote, to ensure a right royal battle on ground on which it is absolutely certain of the public's support.

Good luck, lefties, trying to persuade anyone that an income equivalent £34,000 a year salary is going to thrust anyone into "poverty". I suspect the Government is absolutely delighted to have this in the news for a few more weeks. "Labour wants to pay its voters more than you earn".

Monday, 23 January 2012

Scotland & Northern Ireland

The Language of the Protestant community in Northern Ireland is called Ullans or Ulster LinkScots. The plantation of Ulster, in what many view as the First British Empire, started under Britain's first King, James I, who was, before he ascended the English throne, known as James VI of Scotland. Earlier English plantations had been concentrated around Dublin, but he sent Scots to form "plantations" in northern Ireland, whose troubles since have been about ownership of Land. To this day, most towns in the province are overwhelmingly protestant, with the Catholics being more rural. What happened is perhaps not dissimilar to the Israeli settlements of the West Bank, something the Israeli government might like to ponder.

Culturally, Glasgow and Belfast share the footballing loyalties, sectarian troubles and culture. You can look across the Irish sea from the Giant's causeway in County Antrim in Ulster and see Islay and the Mull of Kintyre, a phallic and legally distinguished peninsula in Scotland.

Northern Ireland therefore is in a Union with England & Wales mainly because of the latter's union with Scotland. Shouldn't an Independent Scotland therefore get Ulster? (yes, I know the 6 counties are not the same as Ulster, but the word is often so used) Do the Northern Irish who wish to remain British, wish to remain in a Union with England, or Scotland? Shouldn't they get a say?

Ultimately unpicking a Union as close as that between Scotland and the Rest of the UK is going to be a constitutional and practical nightmare. Ultimately, whatever happens to Scotland, something like the Anglo Irish Agreement will mean that Scots or English can choose either Nationality at will.

Much of the Nationalist rhetoric, particularly about the Oil, where they think the maritime border should run east-west along the sea bed, rather than follow the line of a relatively straight border, is nonsense. As is their plan to annex the Scottish Regiments of the British Army. The idea that Scotland subsidises the rest of the UK is laughable. It is clear that Scotland would have been bankrupted by the financial crisis, in a manner worse than Ireland. As for the EU, Spain will veto Scotland's automatic membership, and she will have to apply in her own right, and be seen as another mouth to feed. Once these practicalities are made clear, the appeal of independence is reduced to an emotional one. Bannockburn was a long time ago, and we've been through a lot together since.

For these reasons, devo-max makes sense to me, and appears to be the favoured option of most Scots. I for one would LOVE to see Scotland standing on its own two feet. It might even provoke a round of healthy tax-competition to all our benefits. For at present Scotland has a version of the Dutch disease, where they farm subsidy from London, without having to earn anything themselves. The state therefore crowds out private industry, anyone with any drive or talent leaves, Scottish politics becomes that of the shit that's left behind, and ever more insanely socialist as a result. Tax-raising powers and fiscal independence would be the making of Scotland by skewering their pinko mindset and forcing them to pay for policies such as "free" prescriptions and tuition.

Ireland, who left the Union in the early 20th century still enjoys a "most-favoured nation" status and despite rankles at the top of government, Brits and Irishmen get on pretty well, and it's always been so. There were more Irishmen who died on the first day of the Somme than took part in the Easter rising in 1916. The Irish Rugby team, plays as All Ireland, completely (and magnificently) ignoring brute politics. Irishmen can vote in British elections, and serve in her army. Whatever happens to Scotland, we're never going to be totally independent of each other. Perhaps a loose federation of the Isles, including an independent Scotland, Wales and a United Ireland whose citizens are broadly able to choose who they want to belong to and where they want to live is where we will end up. In the meantime, Scotland cannot just wash her hands of the responsibilities she shares as a result of her membership of the United kingdom, and that includes the troubled province of Northern Ireland.

Ultimately though, I don't mind so long as my Scottish relatives are not made foreigners in any meaningful sense, and nationalist violence is restricted to that happening in February between 20-stone props at Lansdowne road, Murrayfield or Twickenham.

Thursday, 19 January 2012

Offense-Taking redux.

Apatosaurus excelsus, wearing display plumage.

At wednesday's Prime Ministers' Questions, Dennis Skinner, the Beast of Bolsover asked a question about how the Wicked PM invited a representative of Hitler Satan Rupert Murdoch "into the heart of Government". The prime minister responded by answering the question saying he'd love to give evidence to the Leveson inquiry, then added..
"...There's no need to go to the Natural History Museum to see a dinosaur, just come to the House of Commons at half-past-twelve..."
Skinner, who's himself been banned for his parliamentary insults to "the Boy George" Osborne's alleged use of Coke & Brasses (remarks he defended by saying "they were in the 'News of the World' [owned by one R. Murdoch's News Corp], you can look it up") merely shrugged. I may disagree deeply with Mr Skinner's politics, but he's a parliamentary bruiser, who can take the rough and tumble.

Paul Flynn, who thinks a firm handshake "assault" is not so robust, accusing the prime-minister of "ageism". You need to work pretty hard to find offence in calling the sine qua non of Old Labour a "dinoasuar", an epithet often used to describe those on both sides whose antediluvean politics are still fighting battles long lost and won. The insult is pretty mild, and describes the man's politics, not his age. As Paul Flynn, unfortunately an MP of Long standing well knows.

This offence-seeking needs to stop, and Paul Flynn (who thinks a British Jew can't be ambassador to Israel because of "divided loyalties") needs to man up or get out of politics.

Monday, 16 January 2012

Left Wing Boogeymen & The Labour Market.

Youth unemployment started to rise under Labour, partially but not entirely as a result of minimum wage legislation. Also to blame are poor standards in schools, and a raft of tax employment legislation which cumulatively raised the cost of employing a young person without experience above that of the benefit to the employer of him doing so. Of course some young people are worth the risk, being hard-working, conscientious and eager to learn. The problem that employers face is getting rid of those who aren't is too expensive and as a result fewer young people are hired.

The main loser from this are the young people themselves. Without any experience between 18 & 21 to raise their marginal productivity above £6.08 an hour, they face a lifetime of being unemployable. Supporters of the minimum wage can point to the lower rates, £2.60 an hour for apprentices, £3.68 for 17-18 year-olds and £4.98 for 18-20 year-olds, but that doesn't cover the increase in employers' NI, the cost of PAYE, the difficulty of dismissing unsuitable workers. Hiring young, unproven people is just too risky.

The reason for the introduction of the minimum wage is that some employers, it was thought but not conclusively proved, exploited monopolistic power over immobile, unskilled labour and could drive wages below that available to do nothing on the welfare state. And this boogeyman reveals a fundamental feature of the Left's thinking about employment.

I often characterise socialism as the belief that a dead-end, unionised job in a factory is the best anyone (else) should hope for. And here, indeed, in the 19th century model, the mill-owners could and in many cases did drive down wages, using their power as monopolies or cartels to keep wage costs down. And in this environment, organisation to defend the interests of Labour against that of capital, makes sense. This is the left's intellectual hinterland. Minimum wages, employment rights and so forth make sense when each town had its factory, Luton hats, Northampton shoes, Birmingham bicycles or whatever, with a large supply of excesss labour coming off the land. It does NOT fit today's Labour market in the UK.

Employers who take on an apprentice are likely to lose him after a couple of years, as rival employers who have not invested in the costs of educating youngsters can afford to pay more. He may not like the job, and instead prefer IT sales or estate-agency and the chance of a company BMW. This is why there are so few apprenticeships: those who go through them become very employable and not just in the low-wage industry that creates many of them. They just don't fit the modern jobs market, but occupy a left-wing fantasy from a vanished age.

Private sector employers are not monopolistic actors in the Labour market. There is competition to keep and retain staff, even in this age of unemployment. People who have the skills (and here, we're often actually talking about the ability to speak clear English, turn up, on time, reasonably well presented and work hard) get a job, because employers are crying out for such people. And those who have never, thanks to a dearth of 'entry-level' jobs, been able to demonstrate these skills? Their CVs and job applications will be thrown in the bin for every job they apply for.

The left has used legislation suited to the 19th century caricature of the top-hatted mill-owner, holding a whip hand over his employees whom he regards as serfs, and applied it to a fluid, assortive labour market where the greatest power is held by the most employable, a little less by average employers and none whatsoever is held by unskilled labour. Perversely, by denying them any opportunity to ever demonstrate a basic work ethic, the unskilled rapidly become unemployable after their 21st birthday. Thus the minimum wage destroys the life-chances of those it is designed to help.

It is for this reason the left, and especially Labour, represents the employees of the last great monopolistic employers: the State. Substantially all nurses in the UK are employed indirectly or otherwise by the NHS. State and local-government bureaucrats remain unionised, because the skills they learn on these jobs are rarely directly transferable into the private sector. Labour market reforms which help the low-paid state worker deny jobs to those in the private.

Private sector employers in the UK who compete using unskilled labour to drive down costs get smashed by those doing the same thing in China or India. They're out of business. Instead, employers are of two types: hyper-local services such as hairdressing which cannot be outsourced, where wages form a function of the local economy's wealth - check out the price of a cut 'n blow-dry in Kensington (the cheapest I could find was £18) and Barnsley (where the most expensive I could find was £12.95). Or they are in a fight for the most productive staff, and pay sufficient to keep staff in that market place.

Thanks to the union demanded national pay bargaining, the state distorts the labour market. In high wage areas of London and the South East, the state pays nowhere near enough to keep its staff. The NHS is hugely reliant on agency nurses as a result. In the North East however the state is a very generous employer and effectively crowds out the private sector entirely.

Of course this suits the political parties. Labour represents the public sector in the North and the Celtic nations. The Tories represent those employed in the private sector down South. The minimum wage doesn't affect the remaining private sector employers much, but represents the bottom rung of the highly stratified state-employed pyramid. Both sets of MPs benefit from the safe seats it creates.

By denying the right of people to sell their labour at their marginal rate, no hope of advancement becomes available to the long-term unemployed. Of course reversing the minimum wage will not go very far in reversing the problem. Other costs - payroll taxes and employment legislation also have their place, as does an end to national pay bargaining in the state sector. Whatever changes are made now will only see their benefit in a decade or more, just as the youth unemployment rate hit the headlines about a decade after the policies which caused it. A decade is too long for blame to be correctly apportioned in a democracy.

Meanwhile 20% of our young people have no job, and will probably never get one. This will cost us all for the rest of their miserable, confused, oppressed, welfare subsidised and hopeless lives. All so two parties of political elites can form voting blocks - labour create the policy, and the Tories lack the intellectual & political courage to reverse it.

Tuesday, 10 January 2012

High Speed 2

What is the point?

The problem is one of capacity on the railways, something that could be most easily solved by longer platforms and longer trains, not speed.

Indeed the evidence suggests that the speed INCREASES the economic dominance of London, and rather than increasing the supply of Jobs in the cities it serves, may see even more of the UK's economic output originate in London.

The economic benefits of shorter journey times are overstated, mainly because people can work on trains.

If HS1 is anything to go by, most people use the slow line, with only those on expenses using the high speed line. This is the market signalling how much value people put on a short journey time - they'll take it, but only if they're not paying for it. I can only add my own feelings on this: what matters is few changes. When you're on a train, you can relax with a book, or do some work. It doesn't really matter if the journey is 45 minutes or an hour and a half.

Of course commuters place a much higher value on time than the occasional business or leisure traveller. Which is why High Speed trains drain economic potential out of the regions: people can commute into London from farther away.

The money would be better spent upgrading existing track, rather than on a massive vanity project. But politicians like to cut ribbons on shiny new toys. A longer platform in Stevenage is more use, but less glamorous a photo-op.

Monday, 9 January 2012

The Iron Lady

The Iron Lady has received it's share of criticism. The political left don't like the idea of Margaret Thatcher being portrayed without fangs and a cape. Their view of Thatcher is of a monster, cackling over the destruction of jobs, whilst tucking into a plate of working-class-baby stew. The right, on the other hand can't bear the thought of Saint Margaret of Thatcher (peace be upon her) being portrayed as a frail old woman with declining mental faculties.

This movie is NOT about Thatcher's political legacy, rather about her reminiscing and struggling to come to terms with the death of her Husband. It is a touching and poignant portrayal of an old Lady's slow descent into befuddlement. She is not however presented as a dotty old lady. The moments when she pulls herself together, and answers questions with clarity despite having apparently lost the plot a few moments earlier, is a quite stunning piece of acting. You get a feeling that Lady T may not have lost the inner steel which propelled her to no. 10. I will be absolutely staggered if There isn't a 'Best Actress' Oscar for the performance.

But as I am a political anorak, and this blog is mainly read by political anoraks, I'll deal with the politics. She is portrayed as firm, resolute and courageous, which will piss lefties off. The miner's strike (which is along with unemployment, represents the sum total of her time in office according the the Labour view of history) is glossed over, as were the preparations (stockpiling coal, undersea cables to France etc...) which were not mentioned. The Falklands conflict gets a more thorough treatment. Her dismissal of the 'Haig Shuttle' was believable. The controversy over the sinking of the General Belgrano was avoided, by the rare cinematographic technique of being factually correct.

However those looking for a Hagiography are likely to be disappointed. Resolution is positive quality when she was right, however, she was wrong (or at least hugely at odds with the public, which to a democratic politician is the same thing) over the poll tax. Here, her resolute stance appears neatly to the viewer as pig-headedness. The scene in which she delivers a savage dressing down of Geoffrey Howe in cabinet was brilliantly acted, and Streep's performance offered a hint of derangement. You can certainly see why her colleagues thought the time had come for her to go. Of course the issue that sent Howe out of the cabinet was her refusal to commit to a timetable for European Monetary Union. How's that decision worked out, Geoffrey?

Ultimately, though the film deals with loss, decline, grief and family. And here, I think the critics of the film have a point. These are intensely personal issues. Lady Thatcher and sir Dennis were extraordinarily close, and he was hugely important to her. Given that the main protagonist is still alive, perhaps this film could have decently waited for a few years, until after the great lady's state funeral.

Sunday, 8 January 2012

The Offence Game

Dianne Abbot suggested "white people" played divide and rule... Then David Cameron suggested Dealing with Ed Balls was like dealing with someone with Tourette's syndrome.

Leave aside the vast gulf in the responsibilities of these two characters, the reaction to the "gaffes" is the same. The people who were faux-indignantly jumping all over Abbot's tweet, were the next day defending Cameron's "off the cuff" remark. Those who were staunchly defending Abbot's anti-racism were opining that Cameron's remark was "offensive" and demonstrating his "arrogance".

Of course this is just a game, one I play from time to time. But this constant offence seeking is poisonous to discourse, by forcing politicians into a mode of speech wildly divorced from that used by you and me. If Abbot had said "the white establishment" rather than "white people", she'd be expressing an uncontroversial and widely held view about the tactics of colonialism. The 140 character form therefore, where truncation is necessary (whether or not she had sufficient characters left to use the longer expression, brevity is the soul of Twitter) leads problems expressing thoughts accurately. Embarrassing, and fun to hoist a Labour politician on her Race-mongering petard, but no-one's really offended.

Tourette's syndrome is widely used casually as a descriptor of an aggressive and foul-mouthed person. The combative Ed Balls certainly fits. I doubt this is genuinely offensive to anyone with Tourette's, outside the grievance industry. His remarks were no-doubt jumped on as enthusiastically as they were by the Twitter mob, in revenge for the Abbot storm a few days earlier.

Perhaps we'd have more respect for our political system, if we let our Politicians speak like the rest of us. Those who use twitter engage more intimately with members of the public than any politician in the pre-Internet age, and should be applauded. It's fun squealing "offence" to discomfit our lords and masters, but perhaps we don't want to scare them out of Twitter and off the Blogosphere.

Let's let our politicians speak freely. Maybe then they'll continue to let us...

Thursday, 5 January 2012

Sin Taxes, Incentives & the "War on the Motorist".

For 50 years, the roads have been designed exclusively for the car, to the exclusion of almost all other means of transport. Branch lines were axed on the rail-network and the rest fell into unionised disrepair, motorways were built, tramlines ripped up and buses (outside of London) were neglected as the choice of the underclass. Little thought was given to the bus, cycle or pedestrian in the design of roads, or if they were, it was about controlling the pedestrian with cages and detours, in order to keep the motorised traffic flowing. Town centres were wrapped in urban dual carriageway circulatory systems leading into and out of multi-storey car parks. Unfortunately, the experience of road-building is that any increase in capacity is rapidly filled, and despite the investment, the experience of the driver in most of the UK is pretty miserable.

As a result, any removal of road-space from the private motor car, for bus lanes, cycle lanes or other forms of public transport is enormously controversial, and seen as part of a "the war on the motorist", who feels over-taxed, and generally put-upon. Because racism is no-longer allowed, the most vituperative comments on Local papers' 'sPeAK YoU'RE bRaneS' boards are reserved for cyclists who are all red-light jumping, suicidal, pavement-riding, road-hogging Lycra Nazis who are in the way. Angry yet smug, they are the cause of all that is wrong on the roads.

Of course driving can be fun. The open road (ha!) or a race-track. And we've all experienced the joy of giving it the beans when given the opportunity. This is what people think driving SHOULD be like. It isn't.

Driving is NEVER like this...

Driving is uniquely stressful, especially in stop-start traffic. This is why cyclists are so hated. The unexpected flash past the window merely adds to the stress of the motorist in the urban queue who immagines actions to be far more dangerous than they actually are. The disconnect between how driving is, and how it should be, combined with the envy of the cyclist, as he makes progress, ignoring the red light (when safe, I do so to get out of your way...) and nipping in and out of the traffic, leads to these feelings of hate and rage. Of course, if you're sitting in traffic, you're part of the problem, not me...

Now my principal interest, as an occasional motorist myself, is to have smooth traffic flow and as stress-free a journey as possible. The problem comes at pinch points which set the capacity for an entire system. For example, the M4 (of Jeremy Clarkson's bus-lane fame) into London from Heathrow has its capacity set principally by the Hogarth Lane roundabout in Chiswick and a 2-lane overpass between junction 2 & 3. There's no point having a 3 lane black-top if it just pours vehicles over a bridge which will be backed up for 6 hours a day as a result. The thinking behind the bus-lane is that a significant chunk of that traffic will be doing one route: Heathrow to West London. A bus will take cars off the road, freeing capacity, for people who want to use a car, and presenting another option for those who haven't a car parked at Heathrow, and for whom the train or tube is inconvenient. It takes excess capacity off the road, leading to the pinch-point, meaning at peak hours, the traffic flows slower into the junction, leading to fewer tail-backs. Thanks to Clarkson, the bus lane is no more, and there are more delays as a result.

This is also the thinking behind variable speed limits when the road is clear - for example to ease the congestion at Junction 6 (spaghetti junction) of the M6 whose capacity is exceeded almost every day, you often see 50mph limits on the overhead gantries for 20 miles leading up to it. Of course everyone ignores variable speed limits and Junction 6 stops moving every day (Advice: the M6 Toll road between junction 4 & 11 is well worth £5. If this blog can teach you anything, never, unless you absolutely have to approach junction 6 of the M6. You will be there for hours...).

So here's the rub. Traffic engineers can look at a system and suggest that IF everyone does X, we can have capacity Y. But motorists don't like being told what to do, and rarely believe it's for their own good. The legacy of the hated Gatso camera (which I want to see removed), speed bumps (cyclists hate these at least as much as motorists), one-way systems, all designed to make traffic flow better, but end up making drivers even more stressed. And a stressed driver is an aggressive driver. And that makes no-one happy least of all, me on my bike.

From a recent twitter thread: "£8bn in spending on roads, but motorists pay £30bn in taxes." or variations thereof is an oft heard refrain. So let's look at this in more detail. Vehicle Excise Duty (a tax I've long argued should be abolished) raised £5.4bn and fuel duty raised £24bn. Fair enough. But this isn't a hypothecated fund for road building. It's more akin a usage fee for a scarce resource, in this case road space. It is also designed to cover the externalities of CO2 emissions (whatever you think of this, I'm not interested right now), noise, pollution, and congestion.

England (see comments) is the world's 3rd most densely populated country (ignoring micro-states) after Japan and the Netherlands. The greater south-east is the most densely populated area in the world. There just isn't the room for everyone to use their cars at the same time. So bear that thought in mind when reading the next few paragraphs. What this enormous £30bn tax bill represents is a colossal mis-pricing of an asset. Roads are far too expensive for 12 hours a day (9pm-6am). They are far, far too cheap between 7:30 and 9:30am or between 4:30 and 6:30pm. They're probably about right (given that they're full, but running smoothly) during the rest of the day.

So. You've a problem for 4 hours a day, across much of the south-east as everyone tries to get to the same places at the same time, by the same means of transport. You've got 3 options.
  1. Build capacity. The problem is that if you build enough capacity, you get Milton Keynes or in it's extreme form, Los Angeles. Free Parking in LA has been a curse. A 2 bed semi in Milton Keynes costs £315k compared to £500k in 'war on the motorist' central, Cambridge. This differential despite the fact that Milton Keynes has better connections, and is an easier commute into London (the strongest correlator with house prices). People don't choose to live in a car-paradise, because cars though lovely to be in, impose enormous externalities on everyone around them - noise, pollution, danger - when they move faster than 20mph. The market has spoken. People like their car. They don't like other people's, and they will put up with restrictions on its use for quality of life.
  2. Encourage alternatives, which means laying on buses, trains, trams and designing the roads so they aren't savagely hostile to all but the most aggressive and confident cyclist. The fact I am not in a car, is one less car in the queue up the hill to the roundabout. Motorists should recognise this and welcome it. The problem is cycling is uncomfortable to the weak (yes I do feel utter contempt for fatsos in boxes...), and buses are just nasty. So that in itself is not enough.
  3. Discourage motorists at peak hours. This is the argument behind the congestion charge. I don't like road pricing mainly because of the surveillance aspect of it. I don't like 'the man' being able to track my movements. Instead I prefer the widespread use of parking charges as a proxy for road pricing. This isn't a "nudge", but an application of the principles of the market to road congestion. Councils encourage short-term parking for shopping, with nominal short-term ticket charges, rising sharply should you wish to park all day (which is often not possible at all in a council car park). Further more, councils charge an annual tax on office parking spaces -£600 in the last example, to discourage commuting and encourage the use of alternatives. Clever use of technology will allow motorists to pay when they leave for what they've used, rather than using penalties and traffic wardens, which just creates more stress.
On top of the externalities motorists impose on themselves, like congestion, cars impose externalities on everyone else when they move. (Don't even try to deny this. Would YOU want to live next to a main road...?) especially when they move faster than 20-30mph: These externalities which reduce the qualitiy of life for those around them are principally Noise, pollution and danger, which are reduced to almost nothing when the speed drops. This is the reason most residential streets are being closed off at one end to prevent "rat-running". The campaign for 20mph zones in urban areas isn't a war on the motorist, but an attempt to help people who live there, live with cars safely and without stress. Intelligent road design can achieve this without further stressing the motorist. The point is, where the road design is intelligent, the average motorist doesn't notice it. I do, because I am a road design bore.

So, motoring & parking charges are seen as "sin taxes" on what most people regard as a necessity. They aren't. Nor are speed limits below what you think "safe and reasonable" or traffic calming measures a politically motivated restriction on your freedom. They're mostly about demand management and safety. This is why the Tax Payers' alliance is wrong on 'Sin Taxes' which according to them "either work, or raise revenue. They can't do both". They can, of course, it's just a question of where any particular tax is on its laffer curve, something the TPA is fond of pointing out in other contexts. If a 5% rise in tax leads to a 2% drop in use, you have raised money AND had an effect. In any other context, a market-pricing system for use of a scarce resource would be lauded by the TPA, but not, it seems when applied to the motorist, which is bizarre. Because the TPA are firmly of the (correct) belief that market price-setting anywhere and always leads to more efficient use of a resource, and therefore greater wealth for all.

So. All this stuff I've been writing about these last few days isn't about a "war on the motorist", nor is it particularly about cycling. It's about a fair crack of the whip for all means of transport, which all have their place in a sophisticated, decentralised, efficient means of getting people to the right place at the right time. If all you have is a hammer, everything looks like a nail. The UK is too car-centric, and needs to invest in alternatives, mainly to make the car itself work better. A benefit of fewer cars in our town centres MIGHT be a more pleasant and relaxing environment for us all.

I mentioned three countries more densely populated than the UK - The Netherlands, Belgium and Japan. All have embraced the bicycle as a means of urban transport, and both invest heavily in public transport. They do this because in parts of the world where lots of people live together, there just isn't room for everyone to drive. Motorists know this, deep down, and fear the loss of their privileged position in the hierarchy on the road. That is why any comment which involves addressing the necessity to control traffic is dealt with in such an angry way. Humans are irrationally loss-averse, and blind to opportunities. Just as benefits recipients fear the changes to the benefits system more than is reasonable, the motorist fears any alternative to the car more than is reasonable.

Note, I am not suggesting YOU can't use YOUR car, merely suggesting that government has a role in providing safe alternatives, even if you're a libertarian. If you're a libertarian, you should be in favour of market pricing mechanisms. This isn't government promoting anything, nor is it isn't a war on the motorist. Can we really go on sitting in traffic for hours (when I say "we", I mean "you". I'm long-gone)? Wouldn't it be better if, on a sunny day, you weren't put off taking a bike to work for a change because of a perceived danger? It's about giving the options, not taking them away. Wouldn't it be nice if there was an incentive for your employer to allow you to work at home? Do we really ALL need to make the journey to work at the same time? Without a pricing mechanism which captures at least some of the externalites, you will not have the most efficient use of resources, and we're all poorer for it.

Finally, and much more broadly, we have the wrong basis for taxation. Why do we tax jobs, leading to fewer jobs; why tax profits, we want more; why not tax externalities instead? Pigovian taxes make more sense than income taxes because the tax can create a positive outcome in more efficient useage of resources. Wouldn't that make sense?

Wednesday, 4 January 2012

BBC complaint

"Thinking Streets" was broadcast 3/1/12 21:00 and re-broadcast 15:30 4/1/12. I submitted the following comment.

In the opening vox-pop, two people openly said they would like to kill cyclists. I understand in the context of the program that this was to set up an idea that some think the roads are a "war zone", but I can think of no other class of people against whom such a threat would be broadcast on the BBC.

I was deliberately knocked off my bike by a road-rage driver, who fled the scene. Despite a positive ID, he was never prosecuted. These attitudes are common. Your broadcast gives the impression they are acceptable. This is irresponsible.

Otherwise the program was interesting and engaging, though I disagree with your charicterisation of shared space as being common in the Netherlands. It isn't. The Dutch seperate their traffic, with high quality, seperate cycle paths with 'shared space' in only a few small urban areas.
Let's see what happens.

Tuesday, 3 January 2012

"Provide Parking!"?

The simple solution to the death of the high street touted by Internet bores* but barely mentioned by "TV retail Expert, Mary Portas", in her recent report is free parking. Portas focuses instead on silly "use-category" legislation and other red-tape, while suggesting the high street must adapt to an environment where Online becomes the dominant channel, perhaps by allowing retail to retreat to a "core" town-centre, allowing shops to be converted into homes on the edge of the CBD.

I have had many arguments online, but none more heated, vicious and personal than when trying to get car-owners to admit to the externalities caused by car ownership. Any attempt to make the motorist pay for these externalities (most of which, such as congestion, only affect other motorists), is seen as an evil attack by shadowy forces in the "war on the motorist" or a "nudge" and therefore an anathema to the "Libertarian". It isn't a nudge, but just an attempt to get a market solution (something libertarians are supposed to support) to the problem of insufficient capacity on the roads. Motorists just can't accept that even as expensive as it is now, the Car is ridiculously heavilly subsidised, and few if any externalites are charged at anything like their true cost. By far the most obvious and pressing is the issue of town-centre parking.

Why don't councils simply provide more parking spaces? Well land is costly, and motorists are unwilling to move more than about 200m (in practice it's often more like 50m) from their car. In fact, they want to park directly outside the shop, and they don't want to pay for it. Yet parking spaces are extraordinarily expensive: several tens of thousands per space at ground level, more above ground, and hundreds of thousands per space below. Put the demand for free parking another way: motorists want to enjoy exclusive access to a piece of town-centre land with hugely expensive, single use, physically ugly infrastructure, for "free". Of course, by "free" motorists mean they expect the retailer to pay for the pleasure of the motorists' custom by providing these facilities out of their profit margin.

This is why councils are keen on Park & Ride. Land is cheap on the edge of town and a shuttle bus is cheap to provide. Generally speaking, given the amount of time spent circulating to find a space, most motorists would be better off driving to a park and ride and taking the bus. The problem is motorists hate being more than 200m from their car. Time spent looking for a space is ignored. Time spent on the bus isn't (perhaps with good reason). Even if successful in the search for a space, you're still imposing costs on others. The externality of parking outside a shop is to be found in the prevention of someone else doing so, and in the increased congestion as that person then circulates to find another parking space.

I wonder whether a variable pricing solution has any merit. Basically parking spaces should be costed on the number of free spaces in the immediate environs. If there are lots of spaces free on the street, or on that section of car-park, the price falls. If there are few free spaces, if you want to park at the supermarket's front door, or take the last bay on a street for example, you pay much more. Set the algorithm, and let the punters decide. I would always park where it was cheapest. This could also be viewed as an efficient fat-tax as the obese always fight hardest for the most convenient spots for them to waddle fatly towards their doughnut emporium.

This is, of course a "nudge" and therefore unacceptable. Only providing what the motorist wants, free of charge (they pay "road tax" don't you know?) is acceptable. Of course a retailer, who has to pay rents on the shop and rates for all that "free" parking, passes it back onto the customer in the form of higher ticket prices on the goods he sells. In response the motorist enjoys shopping as a leisure activity, browses the goods, has a coffee, and then goes home and buys whatever it was he was looking for, online. Thus the Motorists' demand for free parking is contributing to the coming dominance of online retail.

The other reason that councils don't provide unlimited free parking is that were they to do so, life would be made unbearable by congestion, as everyone wants to use the facilities at the same time. Roads have limited capacity and cannot get the people who want to park to and from their spots sufficiently smoothly. There's a balance between road capacity and parking provision - there's no point increasing parking capacity beyond that of the roads to sustain it. That capacity is limited by pinch-points, which in urban areas are often medieval centres with narrow streets. no-one is suggesting turning Cambridge into Milton Keynes are they?

Larger big-box stores will continue to carry the cost of high-street locations, but accept they will be mere show-rooms for delivery or eventual online order. The Greengrocer, butcher & fishmonger were killed by the supermarket, who provide the same service, cheaper and more conveniently. The town-centre shop is going to be (broadly) killed by the website. Just as there are a few butchers, greengrocers and fishmongers left, catering to a niche of foodies who demand extremely high quality and value the personal touch, it seems likely that the retail industry will be dominated by out-of-town for those who demand to drive, relegating the High-Street to specialist shops, many of which will operate significant online businesses. Here, e-bay is the shopkeeper's friend, and the catchement area of the shop is expanded by the Internet. Ultimately, the High street will become a leisure and social destination dominated by specialist shops with wide catchement areas, often locaed in clusters, coffee, alcohol, food, and possibly entertainment and culture rather than retail. It will be up to imaginative town councils to find a way to keep the whole thing alive. Portas is right. Cutting the red-tape, expanding markets, and altering use rules to make them more flexible is a better solution than concreting over more of the countryside, or building more multi-storey car-parks.

Research suggests that retailers consistently over-estimate the importance of motorists and parking to their turnover, and underestimate the importance of users of other forms of transport. In particular, Motorists don't spend any more than other customers, but they prevent users of other forms of transport getting to the shop, which could generate higher traffic. The fact you can park a dozen bicycles outside a shop more than makes up for any lost revenue due to "anti-motorist" policies such as pedestrianisation or shared-space schemes. Users of public transport, Cyclists and pedestrians can also enjoy a drink with their retail-therapy, motorists can't.

The fact is the demise of Town-Centres as retail dominated spaces is absolutely inevitable unless people can be persuaded to get more than 200m from their car. If you value the high-street, as most people claim to do, you have to use it, and pay to park your car. (Or take a bicycle). Me? I'm not fussed. I like the Internet and never saw shopping as a leisure activity. I find 'poundland' which appears to be replacing Woolworths on in every town-centre depressing, but that's a mere statement of taste. Meh.

*I am aware of the crashing hypocrisy.

Predictions for 2012

I didn't do one of these last year, so there's nothing to measure myself against. Here goes.

  • The Eurozone will survive, mostly intact. Only Greece may leave but I think this unlikely. Wishing the Euro's demise, does NOT make it more likely.
  • The Olympics will be a success, and the UK will benefit from a Feel-Good factor. We will come 6th in the medal table.
  • There will not be a General Election in the UK.
  • The Tories will consolidate a small poll lead.
  • Ed Miliband will continue to display utter uselessness, the result of my morning dump would make a more convincing leader of Her Majesty's loyal opposition. Well done, Labour, finding someone less credible than Gordon "one eyed fuck-wit" McDoom.
  • David Cameron's veto will not lead directly to the UK leaving the EU, and he will NOT offer a referendum, and will therefore be accused of "treachery" by the usual suspects for whom 'Europe' is the only issue.
  • The economy will surprise everyone by not collapsing (I'm not expecting a boom either)
  • FTSE will fall at first before closing the year close to 6,000.
  • Inflation will remain high, thanks to QE and the fact I suspect the BoE has a tacit 5% inflation target in order to monetise public and private debts.
  • Unemployment will peak (as usual, a couple of years after Labour leaves office...) before falling again.

So 2012 will be better than 2011, the squeeze will ease and we'll all start feeling a bit more optimistic again. The Government has the right ideas on the economy (broadly balance the books, then cut taxes, in that order).

The UK still has global influence, the rule of law, the world's 6th, 7th or 8th largest economy, the 16th richest per capita and defensible borders, semi-detached membership of the world's largest market, good relationships with the world's largest economy, direct links, via Hong Kong into the 2nd. We have a globe-bestriding financial sector, and we punch above our weight in sport, music & creative industries, have a strong manufacturing sector (yes, we do). There's still some fight left in old blighty yet, and I do wish people who consider themselves patriots would stop writing her off. This is not a bad place from which to be watching the crises.

Can you think of anywhere better?

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