My landlord is a tad perturbed about the latest travel stealth tax: it seems now the Blackwall tunnel is becoming part of the 8 pound a day London area congestion charge. My own bugbear? I find it beyond absurd that a city which should be doing all it can to encourage more tourism charges eight dollars for a single, one stop journey on the Tube…. so the notion of an integrated transport policy for London seems a bit broken.
Chris argues:
This smacks of accountants and apparent public servants saying the “market” can take the price rise. Well “Londernors” are not a “market”. It is a struggle to make ends meet in London on a day-to-day basis. In fact, it is becoming a huge struggle to stay solvent in the UK for a huge amount of people.
Month on month, the UK is experiencing record numbers of people going bankrupt. There was a 66% rise of people going bankrupt from 2005 to 2006. The country is living on credit just to make ends meet. Month on month, new and “exciting” schemes are being introduced to help us spend our money.
Taxes are no longer incremented in line with inflation, but doubled. This seems to be a new standard working practice. I was surprised the new double airport tax introduced last week was legally allowed to go ahead.”
I wonder what Mark and Joe over at ReMove think? Just what is the balance between the future of mobility and the future of tax? London is certainly a good public experiment in that regard.
Its a tough one. London is becoming richer, but wealth is bifurcating. Chris is right to point out its getting much harder to live here for some, but we live in a society that celebrates upward mobility, but tends to ignore the downward corollary. I live in a ‘rough’ part of town. The value of my house increases, though, as the area gentrifies and locals are priced out. So should I celebrate the rising standard of living, or decry it?
I would be more than happy to tax the shit out of SUVs.
But is Ken killing London or improving it? I would also love to know what Roo and Richard think.
All I know is that every kind of travel has become dramatically more expensive since Ken took over. One of his first actions at Mayor- black cab prices went up. Rail travel is way ahead of inflation. Now private cars have to pay congestion charges across the city. London buses actually went down in price for about eighteen months, before the curve turned dramatically the other way. This all drives me nuts.
It may be that London increasingly offers us, in microcosm, a view of the future of travel.
Travel is too expensive. Perhaps it should be if it keeps us from burning fossil fuels.
Richard G Brown says:
February 12, 2007 at 1:47 pm
I share your bemusement at how much we charge unwitting tourists to travel round London. For example, my sister is visiting next week and, until I told her about Oyster – and how it is the only way to get half-way reasonable tube fares, she was unaware of it.
Similarly, although I agree with the concept of a congestion zone, I’m not sure extending it (and giving massive discounts to those who live inside) is a particularly clever thing to do. To see the logic of this, consider what would happen if it were extended to the whole of the M25. It would just serve to keep outsiders away without doing anything to reduce the number of journeys taken by those inside.
Taxing SUVs: sorry, I disagree. That sounds too much like bullying. The taxation system does not exist so that some people who think they know better than others can enforce their preferences.
If something I do causes harm or inconvenience to a third party (e.g. the emission of CO2), then there is a good case to be made for taxing me on that. That is: tax me so that cost of the externalities I impose on others (and for which they are not compensated) are imposed on me (I am forced to internalise them).
Such taxation (Pigouvian) is valid but it is not a bullying tool or a way to enforce preferences: it is only justifiable if I am not currently paying the full cost of any activities I engage in.
However, as it happens, I do not run a car since, living close to two tube lines and the DLR, I don’t really need one. Therefore, my own experience of London travel is that it is inexpensive: I pay a lot less to travel freely in London than I ever did when I lived elsewhere. My annual travel card costs less than my last car’s *insurance*!
On the “bifurcation” of wealth, I’m not entirely where I stand. The libertarian in me is strongly of the opinion that my getting richer does *not* mean somebody else has got poorer. However, I do accept that if everybody else gets richer than you, it doesn’t feel very nice. Venezuela’s Chavez has solved this problem rather nicely: apparently the number of middle-class citizens queueing up to leave the country has doubled in the last year or so. That will reduce inequality rather nicely (as all the rich people will be gone). It will be a nice experiment on whether it is relative wealth rather than absolute wealth that is important…
Finally, you asked what I thought of Ken. One half of me thinks he is great for London (good ambassador, etc, etc). The other half thinks he’s a complete fruit loop!
Berkay Mollamustafao says:
February 12, 2007 at 3:29 pm
Hi James,
I think there are two threads in your post
1.The city is charging way too much money (as hidden tax) for cars driving into London.
2.The “public” transportation is very expensive in London
I think it is possible to agree with one and the other. Assuming driving a car in the city is considered a privilege and not a right, car charge can be considered a market. Supply is limited, only a finite number of cars can drive into London. Demand can decide how much should the privilege be worth. If the price becomes too high, there would be a drop in the number of cars, and hence the revenue for the city. Your usual supply and demand equation.
However, it is true that the well to do get all the benefit here at the expense of folks with lower income, so it is hardly a straight forward decision since the city is a public entity.
Public transportation being very expensive is however a bigger problem. I’m not a Londoner, but often use and (pay dearly) for the privilege of using the public transportation system, and get shell shocked every time I pay 4 pounds for a single trip. I can imagine how expensive it can become for people even when using the various passes and cards. On this issue too, one can argue that the cost of services should reflect their real cost, but once again, this would punish the folks with lower income, which in the long run is not in anyone’s interest (where will your teachers, nurses, etc. live?).
So I argue that it may be OK to do the first one and charge people significant amount of money to use the roads, provided that you use the generated revenue to ensure that the alternatives (public transportation) are available and affordable. The public transportation has to stay as a viable option for the masses to justify any other decision on transportation.
As far the tourists (and the business travelers)? Let them pay 🙂 as long as you’re not loosing them, which I think is your concern.
Dennis Howlett says:
February 12, 2007 at 5:07 pm
Apart from the fact I’m glad I don’t live in the UK, visiting the capital (as I plan to do next week) is moving into nose bleed cost territory. It’s extortion.
It’s one reason I try very hard not to visit London. Even Paris seems cheap by comparison!
I do however resent the implication that my bean counting colleagues should take the rap. Ken’s a tax and spend merchant. Politics drives his agenda, not the scribblings of accountants.
Dan Creswell says:
February 12, 2007 at 6:40 pm
“Travel is too expensive. Perhaps it should be if it keeps us from burning fossil fuels.”
I think travel being expensive would be more than acceptable so long as the whole system is rebalanced accordingly. For example, I would expect to see businesses shift to policies such as emphasizing home working rather than insist on all workers travelling at peak times.
Who knows, such changes in policy might then mean cheaper prices for tourists due to transport networks and other infrastructure being under less strain.
Nigel James says:
February 13, 2007 at 7:49 am
I live in centralish London and love it. Like James my bugbear is that prices are hiked way beyond any CPI or inflation rate. Can I also put up my prices 40% next year and double the catchment area? And if you pay my invoice a month late can I charge you double?
Oh you have a procurement process that routinely takes the lowest bidder? Sound like “Cake and eat it too”.
The pricing is enough to make you want to buy a Toyota! And that is a funny one. It is a congestion charge but if you have a green car you don’t pay. So does that mean it is a pollution change? A city full of less polluting cars will still be congested.
Having said that I love living in London. Was out in the city last night travelling in after the CC time had expired and parked for free on a single yellow line, had a great time and on the way home got to see Big Ben and the House of Parliament. They are such stunning buildings – they just take your breath away.
Alex says:
February 13, 2007 at 8:41 pm
Its not like anyone in London who drives to work (ie who can afford the parking / or works somewhere fancy enough to provide it for free) can’t afford the congestion charge. I live in London (and love it), public transport since Ken got elected is about 10x better – I’ve even sold my car. I live on the edge of the congestion charge extension and am looking forward to it being extended, as its going to make living in west london better.
Alex
ps – the massive advantage to black cab fairs going up was that afterwards you could actually find one!
pps – you are right about overground trains though – they are overpriced / overcrowded / dirty / unreliable and aren’t going to be getting better while the govenment keep insisting on giving franchises to Virgin or Stagecoach.
Richard G Brown says:
February 14, 2007 at 9:20 pm
“you are right about overground trains though – they are overpriced / overcrowded”
Given the unfortunate constraints of short platforms and congestion (neither of which are the train operators’ faults), I’m not sure how it’s possible simultaneously to claim that a resource is both overpriced and overcrowded.
As unpalatable as it may be to suggest it, I would suggest trains are either undercrowded (as a result of overpricing) or overcrowded (as a result of underpricing).
Given the the level of crowding can be assessed objectively, and that this assessment would support the claim that trains are overcrowded at peak periods, this would imply to me that peak-time trains are, indeed, underpriced.
Joseph Simpson says:
February 15, 2007 at 10:37 pm
It’s certainly an interesting point James. I personally hope that London is not the model for future transportation – although from the people I speak to around the world, it seems everyone else is watching with great interest what’s happening here.
The simple problem is that many of our ‘systems’ – from road transport, light and heavy rail, to airports, are overloaded – we don’t have the capacity to move the number of people who wish to travel.
From one perspective, I have little doubt that the next twenty years will herald technologies which allow us to solve the problems we are all too aware of, that are currently caused by burning fossil fuels. But that doesn’t get around the wider issues of ‘space’ and ‘flow’. Ultimately, everyone could buy a ‘green’ Toyota Prius tomorrow, and whilst we might heat the earth a little less, we’d still be facing some of the longest traffic jams ever seen.
So whilst I support some of Transport for London’s policies – such as the Oyster card, (although I agree with you about it being a problem for visitors) and their plan to alter the congestion charge levels so that charge is based on vehicle emissions – the major problem is that it appears to be an organisation full of people who are desperate to control and contrain movement. This is to completely mis-understand how cities work – and how people try and wish to move around them.
In the short term, taxation is the easiest way to ‘stop’ people out of moving; but longer term, we have to accept that we have in fact out-grown many of these hundred year old systems such as railways and cars – and we need to find new ways to move about.
In Pasadena recenly, we heard an impassioned plea by Segway inventor Dean Kamen, for designers to rethink the big ‘system’ picture of transportation, and ‘stop redesigning cupholders’. Fundamentally, all the government is doing with ideas like its proposed road-user charging scheme that we’ve seen so much press about this week, is tinkering.
More on this over at the movementdesign bureau blog if anyone is interested:
http://movementbureau.blogs.com/projects/
Roo Reynolds says:
February 19, 2007 at 11:00 am
Some good comments here.
I don’t know. Londonders. Give them a city full of black cabs and they alternate between complaining there are too few and they are or too expensive. Give them a near ubiquitous underground system and watch as they argue about whether it’s overcrowded, overpriced or both. 🙂
Growing up in Dorset I would have bitten my arm off to get around as conveniently as I now do when I go into, and around, London. My arm I tell you. In areas where public transport is not even available, the car becomes all too essential.
Never having been a proper Londoner, I am not really qualified to remark on the Ken or his policies. Of course, if I lived in London I’d probably be a vocal opponent of any price rise, including congestion charging. Taxation is always hard to get right, particularly punitive taxation. I’m more likely to buy a Prius than an SUV, but while I find it hard to argue against an SUV tax I’d probably have an entirely different attitude if I did own one. I’d call it bullying rather than a fair recompense for a fuel and road hog. (Richard, do you secretly own an SUV?)
Nevertheless, I think part of James’ original point has been largely overlooked here; are price rises which the rich can afford (and afford to complain about) helping us all cut down unnecessary travel, or are they hurting the poor? Probably both, and sadly it’s probably going to be hard to encourage the one while avoiding the other.
Richard G Brown says:
February 20, 2007 at 1:09 pm
“Taxation is always hard to get right, particularly punitive taxation. I’m more likely to buy a Prius than an SUV, but while I find it hard to argue against an SUV tax…”
Don’t Priuses have a worse total environmental impact over the course of their lives?
In any case, why do you find it hard to argue against the idea of taxing SUVs punitively?
Are we trying to correct a negative externality (excessive CO2, higher chance of Jemima getting squashed as she walks to school, higher chance of one toppling over onto your foot as it goes round the corner) or are we trying to impose our ideas of how other people should live their lives and using faux-scientific moralising as our justification? Why tax just SUVs? What is so special about an SUV? What is wrong with looking at emissions or some proxy (such as mileage?)
As for whether I own an SUV… I live in a riverside flat in Docklands on an IBM salary. Does it *sound* like I could afford to run an SUV too?!! :-p
“Nevertheless, I think part of James’ original point has been largely overlooked here; are price rises which the rich can afford (and afford to complain about) helping us all cut down unnecessary travel, or are they hurting the poor? Probably both, and sadly it’s probably going to be hard to encourage the one while avoiding the other. ”
This is an interesting point. However, it’s probably possible to help the poor quite easily: my understanding is that, based on Stern’s calculation of the cost of emitting CO2, petrol in the UK is taxed at a far higher rate than an externalities argument would require. Therefore, we should be lowering fuel duty in order to ensure its price accurately reflects its cost…. having the price too high surely pushes people in the direction of less efficient transport choices! :-p
Adair says:
October 11, 2007 at 12:55 pm
Very interesting article. As someone in an earlier post said, the rest of the world is watching London, especially those of us who live in Sydney.
After moving huge amounts of people around efficiently during the 2000 Olympics, Sydney’s transport networks has gone into meltdown. A once reliable rail service is now a joke and every road in Sydney seems to be clogged with traffic.
Our State Government’s solution is to increase the number of bus services. Brilliant! When the roads are congested let’s throw some more 10 metre leviathans into the mix. That’ll really fix it. If you are going to sit in traffic, you might as well have some privacy. Listen to the radio or a cd while you stuck in between a fleet of near empty buses.
I hope London gets it worked out to show the boofheads running the circus down here that it can be done.
peter hampshire says:
May 27, 2008 at 10:10 am
Hi,
I also think that the congestion zone and its charges is a tax too far for those who have to travel into London and also those who want too. Like most major cities in the world everything is already far too expensive. These days I choose to live in the country. Although public transport leaves much to be desired here in Hampshire, there are so many things to do and places to go and we are close to the beautiful areas of Dorset and the Isle of Wight.
jgovernor says:
May 27, 2008 at 10:22 am
Richard Brown: I can’t believe you’re regurgitating the Prius vs SUV “study”.
Adair: the chances of us doing anything better than the Aussies are slim to well, none. Just wait – we won’t even have the transport working right *during* the show.
Peter Hampshire: Right on the money. I am a big believer in “localisation”. I am originally from Berkshire, and I know just what a beautiful part of the country it is.
ian says:
July 7, 2008 at 10:36 am
I share your concern about congestion charges in the wider context of taxation. We all know that we have to pay. We all think that too much tax is taken in one way or another. The most frustrating thing is that we all know that much of it is wasted and there is nothjing we can do about it.