Blair's answer to road charging petition

[Howard]

Suppose there is a water fountain in a park. It’s a hot day and lots of people want to drink from the fountain. Being awfully British and civilised, they form an orderly queue at the fountain.

Now, if the number of thirsty people strolling past the fountain is large enough, the rate at which people join the queue will exceed the rate at which people satisfy their thirst and leave the queue. So the queue will get longer and longer.

But at some point, thirsty people will reason to themselves that the displeasure of waiting in the queue is not worth the pleasure of the drink at the end. They’ll avoid the wait, and the queue will grow no longer.

So far so good. That’s how life works in many ways.

But this simple account has a devastating implication.

If there are people who are not joining the queue because it’s not worth it, then the people who do join the queue are probably barely getting any positive benefit out of their drinking fountain experience at all. They enjoy the drink, but for them, it is only just worth the wait. It’s a close run thing between bothering to drink or not.

In fact, you might as well not have a drinking fountain on the hot day, as no-one can enjoy it without paying a time penalty that more or less wipes out the benefit.

I hope I’ve explained this properly. It’s a simplified account, and it relies on all the people in the park having a similar taste for drinking and not queuing.

But it shows that when queuing does the rationing, it does a really bad job.

In the park, if you could get a warden to ban people from queuing, and who instead insisted that only random people could drink, (people whose surname begins with A to K for example), the fountain would give more benefit, (although that benefit would be distributed a little unfairly).

There is another alternative that’s a little more equitable. If it’s practical, you can charge people to use the fountain.

Now, those who do pay, have the benefit of drinking without queuing, but they have the cost of paying. So on balance they are better off using the fountain, but probably only just better off. As far as they’re concerned, we haven’t improved things much over the queuing situation: we’ve just changed the pain of queuing by the pain in the purse.

The difference is though, that the money they’ve handed over can be of benefit to someone else, or the population at large. There is an upside to the drinkers’ displeasure, unlike in the case where the queue does the rationing.

Or to put it another way: when you queue – I get no benefit from your pain. When you pay, I probably do.

Now that is a pretty good argument against the use of rationing by queues.

It may not be a good argument for road pricing, but it does explain why economists tend to think of the price mechanism as a better method of rationing things than congestion.

From the Evan Davis BBC Blog

[wolfman]

As many as 150 civil servants working for the Dept. for Transport have signed the petition against their own ministrys plans for national road pricing. Blair has rejected accusations that this is a "Stealth tax" and denied "Big brother surveillance " was planned.

[wolfman]

This means that we havn't made up our minds yet, but it will be implemented regardless of what the people want.

[wolfman]

Thank you for taking the time to register your views about road pricing on the Downing Street website.

This petition was posted shortly before we published the Eddington Study, an independent review of Britain's transport network. This study set out long-term challenges and options for our transport network.

It made clear that congestion is a major problem to which there is no easy answer. One aspect of the study was highlighting how road pricing could provide a solution to these problems and that advances in technology put these plans within our reach. Of course it would be ten years or more before any national scheme was technologically, never mind politically, feasible.

That is the backdrop to this issue. As my response makes clear, this is not about imposing "stealth taxes" or introducing "Big Brother" surveillance. This is a complex subject, which cannot be resolved without a thorough investigation of all the options, combined with a full and frank debate about the choices we face at a local and national level. That's why I hope this detailed response will address your concerns and set out how we intend to take this issue forward. I see this email as the beginning, not the end of the debate, and the links below provide an opportunity for you to take it further.

But let me be clear straight away: we have not made any decision about national road pricing. Indeed we are simply not yet in a position to do so. We are, for now, working with some local authorities that are interested in establishing local schemes to help address local congestion problems. Pricing is not being forced on any area, but any schemes would teach us more about how road pricing would work and inform decisions on a national scheme. And funds raised from these local schemes will be used to improve transport in those areas.

One thing I suspect we can all agree is that congestion is bad. It's bad for business because it disrupts the delivery of goods and services. It affects people's quality of life. And it is bad for the environment. That is why tackling congestion is a key priority for any Government.

Congestion is predicted to increase by 25% by 2015. This is being driven by economic prosperity. There are 6 million more vehicles on the road now than in 1997, and predictions are that this trend will continue.

Part of the solution is to improve public transport, and to make the most of the existing road network. We have more than doubled investment since 1997, spending £2.5 billion this year on buses and over £4 billion on trains - helping to explain why more people are using them than for decades. And we're committed to sustaining this investment, with over £140 billion of investment planned between now and 2015. We're also putting a great deal of effort into improving traffic flows - for example, over 1000 Highways Agency Traffic Officers now help to keep motorway traffic moving.

But all the evidence shows that improving public transport and tackling traffic bottlenecks will not by themselves prevent congestion getting worse. So we have a difficult choice to make about how we tackle the expected increase in congestion. This is a challenge that all political leaders have to face up to, and not just in the UK. For example, road pricing schemes are already in operation in Italy, Norway and Singapore, and others, such as the Netherlands, are developing schemes. Towns and cities across the world are looking at road pricing as a means of addressing congestion.

One option would be to allow congestion to grow unchecked. Given the forecast growth in traffic, doing nothing would mean that journeys within and between cities would take longer, and be less reliable. I think that would be bad for businesses, individuals and the environment. And the costs on us all will be real - congestion could cost an extra £22 billion in wasted time in England by 2025, of which £10-12 billion would be the direct cost on businesses.

A second option would be to try to build our way out of congestion. We could, of course, add new lanes to our motorways, widen roads in our congested city centres, and build new routes across the countryside. Certainly in some places new capacity will be part of the story. That is why we are widening the M25, M1 and M62. But I think people agree that we cannot simply build more and more roads, particularly when the evidence suggests that traffic quickly grows to fill any new capacity.

Tackling congestion in this way would also be extremely costly, requiring substantial sums to be diverted from other services such as education and health, or increases in taxes. If I tell you that one mile of new motorway costs as much as £30m, you'll have an idea of the sums this approach would entail.

That is why I believe that at least we need to explore the contribution road pricing can make to tackling congestion. It would not be in anyone's interests, especially those of motorists, to slam the door shut on road pricing without exploring it further.

It has been calculated that a national scheme - as part of a wider package of measures - could cut congestion significantly through small changes in our overall travel patterns. But any technology used would have to give definite guarantees about privacy being protected - as it should be. Existing technologies, such as mobile phones and pay-as-you-drive insurance schemes, may well be able to play a role here, by ensuring that the Government doesn't hold information about where vehicles have been. But there may also be opportunities presented by developments in new technology. Just as new medical technology is changing the NHS, so there will be changes in the transport sector. Our aim is to relieve traffic jams, not create a "Big Brother" society.

I know many people's biggest worry about road pricing is that it will be a "stealth tax" on motorists. It won't. Road pricing is about tackling congestion.

Clearly if we decided to move towards a system of national road pricing, there could be a case for moving away from the current system of motoring taxation. This could mean that those who use their car less, or can travel at less congested times, in less congested areas, for example in rural areas, would benefit from lower motoring costs overall. Those who travel longer distances at peak times and in more congested areas would pay more. But those are decisions for the future. At this stage, when no firm decision has been taken as to whether we will move towards a national scheme, stories about possible costs are simply not credible, since they depend on so many variables yet to be investigated, never mind decided.

Before we take any decisions about a national pricing scheme, we know that we have to have a system that works. A system that respects our privacy as individuals. A system that is fair. I fully accept that we don't have all the answers yet. That is why we are not rushing headlong into a national road pricing scheme. Before we take any decisions there would be further consultations. The public will, of course, have their say, as will Parliament.

We want to continue this debate, so that we can build a consensus around the best way to reduce congestion, protect the environment and support our businesses. If you want to find out more, please visit the attached links to more detailed information, and which also give opportunities to engage in further debate.

Yours sincerely,

Tony Blair