Rod Eddington’s unedifying proposals
Austin Williams | 16 December 2006
Rod Eddington’s transport study is the latest in the long line of Treasury-driven policy initiatives designed to counter the lack of political certainty in government circles. While ministers are noticeable by their absence in real transport debates, refusing to discuss any clear initiative for fear that it might turn around and bite them on the bumper, it is much easier to have a third party do it for you.
A recent spate of government-sponsored reports produced by allegedly impartial (read, ‘unelected’) financial commentators, provides the government with a certain air of detachment, and an unquestionable moral authority. It allows it simply to shrug its shoulders and acknowledge that it is obliged to follow the independent, fair-minded, economically-driven expert recommendations. Coincidentally, it also absolves it from blame. But while MPs would like us to believe that this is responsive, consultative government in practice, it is in fact, simply policy-making by pundit.
From economist Kate Barker’s desire to ride roughshod over the democratic process in her report on planning policy in the UK; to economist Nicholas Stern’s world air tour dedicated to telling the developing countries about the evils of flying; or the Eddington report (drafted by ten economists – headed by…er, Sir Nicholas Stern) suggesting that economic principles are the be-all-and-end-all of transport policy, you have to ask yourself, since when have we ever reduced politics to such simple fiscal equations? Historically, issues such as transport infrastructure, planning guidance and energy initiatives, were determined as much by political will, social ambition and ideological beliefs as economic payback. Were that not the case, most public transport systems, let alone national infrastructure networks, would never have been built.
The Eddington report exemplifies such a monetarist mindset – assessing transport schemes by cost/benefit criteria and concluding that ‘smaller projects offer the highest returns.’ In other words, the existing networks of road, rail and airports are in the right locations, we just need to squeeze more efficiency out of them. Sound fiscal sense maybe, but not a great visionary ambition. Isabard Kingdom Brunel, on the 200th anniversary of his birth, would not be impressed.
The government may think that just because a man with a spreadsheet has suggested that we make-do-and-mend, that we should treat this turgid, four-volume transport report as gospel. But since when have we blithely accepted the insights of that most unworldly of professionals – Economics academics? We would do well to question their Zen-like wisdom.
The latest guru pundit is Rod Eddington, who used to be the CEO of British Airways until six months ago when he became, amongst other things, the non-executive director of Rupert Murdoch’s News Corp. Whether this makes him more, or less, impartial is anyone’s guess, but here we explore some of the biases thrown up by Eddington’s Transport Study and hint at the real condition of the transport sector that should be addressed by political , rather than purely financial intervention.Competitiveness
Eddington says that he wants to ‘tell a balanced and thoroughly evidence-based story about the relationship between transport systems and economic success.’ An admirable aim, but unfortunately Eddington’s starting point is less than generous. While recognising that good transport systems improve the flow of information, services and resources he states that ‘economic growth itself causes rising transport demands which, if left unchecked, can put the transport network under strain, damaging productivity and competitiveness.’ In other words, he is describing a Catch 22 whereby economic development leads to increased traffic, which jams the existing infrastructure, thus jeopardising economic development.
Historically, this might have been dealt with by a ‘predict and provide’ approach to alleviating the stress on the network by building more infrastructure to cope with increased demand. Today however, Eddington’s economists argue for a demand management approach, concluding that the piecemeal management of the existing infrastructure is more cost effective than building new and warning against being ‘seduced by “grand projets”’. But there’s little fear of that. Unless there was any doubt about what Eddington means, he concludes that ‘ambitions and dreams of extensive new networks… should be put on hold… some of the best projects are small-scale, such as walking and cycling.’
Here we go again. This is indicative of political defeatism rather than a clear ideological belief in the economic merits of muscle-powered locomotion. Real competitiveness comes from growth, productive capacity and dynamism rather than saving a few quid on capital expenditure. The business bottom line can be made to look healthy by cutting back on expenditure, but it tends to mask an underlying productive malaise. Eddington’s patch and repair approach to transport might balance the books, but it risks tipping the balance of payments towards those countries with fewer qualms about real, dynamic investment in their infrastructure.
In fact there has been no new infrastructure built in this country for years. After a major slump in rail travel in the 60s and 70s, passenger numbers on the rail network have just climbed back up to 1963 levels, the year in which the railways were slashed by a third. An economist might call this a 30% efficiency per passenger – without acknowledging the increased overcrowding, discomfort and inconvenience thus caused. Similarly, there are 28% more passengers on London Underground as there were ten years ago, but no new tube lines, Trying to maximise the productive returns for the least amount of expenditure becomes a miserly objective, in which Eddington advocates better signalling and increased train lengths to eke out the infrastructural efficiencies a bit more.
While road transport has grown by 81% in since 1980, motorways (consistently accounting for less than 1% of the total road length in the UK since 1980) and major trunk roads each only grew by 120 miles between 1996 – 2002. The main increase in the road network comes from new minor roads and housing estate access roads (or from revised methods used by the Department for Transport to calculate road length). Using his penny-pinching logic, Eddington recognises that reducing the amount of traffic on the existing insufficient network is more cost-effective than building more roads. Not only that, but by using an economist’s sleight of hand, his report suggests that ‘not building’ can actually make money. Road-pricing then, as Eddington says, is a no-brainer. Pricing policy
Eddington states that ‘without roadpricing, beyond 2015 there would be a case for significantly increasing the current rate of enhancement of the strategic road network’. God forbid. The essence of road pricing is therefore to put off that terrible scenario for as long as possible by minimising the number of people using the road network. The logic is Stalinist in its simplicity.
The fact that ‘congestion’ still doesn’t have a meaningful, quantifiable definition doesn’t stop Eddington arguing that ‘eliminating existing congestion… would be worth some £7 – 8 billion of GDP per annum’ or suggesting that a 5% reduction in travel for all businesses could generate £2.5 billion of cost savings (0.2% GDP). Indicative of the rhetoric masquerading as statistical reality, the report states that if rising demand is left unchecked ’13 per cent of traffic will be subject to stop-start travel conditions by 2025.’ Whatever stop-start travel conditions means, or however it is quantified is not explained, but what is certain apparently, is that Eddington’s economistic cabal believe that it will mysteriously increase by exactly 13 percent.
Most of us have been softened up to accept mandatory road pricing by years of lobbying by the Commission for Integrated Transport and advisers like Stephen Glaister (an contributing economist to the Eddington report) on the pretext that road pricing would be revenue neutral. There is little evidence to suggest that this is the now the intention. Eddington has few qualms about saying that if you want to change individual behaviour, there must be a real sense of being penalised. People, he says, need to ‘feel the consequences of their decisions.’ This patronising and authoritarian approach implies that once we recognise that restricting our desire to travel is good for us (and good for the planet), we will take our punishment like a man.Eco-Cost/ benefit
Gordon Brown’s pre-budget speech was roundly condemned by environmentalists for its limited eco-penalties on personal mobility. The Chancellor introduced an extra fiver on Air Passenger Duty (when hardly anyone knows that there is such a thing); and put the price of petrol up by 1.5p (just after it has fallen 10p from its £1/ litre price on most forecourts). Such piecemeal measures, argued environmentalists, were not enough to stop enough of us driving. Such is the acceptability of demands that people be financially disciplined for having the audacity to travel, that the only remaining question is, ‘how much? Answer: Eddington predicts around £13 billon of income from penalty charges on motorists (around £620 per person per annum)
Rod Eddington says ‘I firmly believe that the world needs to face up to the reality of climate change, and that implies learning to live within a carbon-constrained future’. On cue, David Milliband announced that carbon ration books will be available in four years time, so that if we exceed our allowance, by driving over our mileage limit or taking too many flights, then we will have to pay the price, currently set at £70/ tonne CO2 emissions (although you can find as many different made-up prices as there are carbon calculators on the web). He is at pains to differentiate, however, between necessary journeys and unnecessary ones and recommends that investment be concentrated only in areas that are ‘highly congested; have international gateway capacity links and are on inter-urban corridors.’ Apart from this being a recipe for more towns to claim to be congested in order to attract inward investment, a lot of genuinely needy places can whistle Dixie.
The report assesses that there will be around £15 billion saved in productivity gains due to less traffic on the roads. This is based on more finger-in-the-air guesstimates which draw on a range of extraneous ‘value-added’ extras – such as environmental gains taken from Nicholas Stern’s worst case scenarios. All of this should be taken with a pinch of salt, as some of the ethereal benefits costed in this report include environmental gains as well as improvements in personal satisfaction and happiness: ‘what economists call the “welfare” of society,’ says Eddington. And so the happiness agenda, popularised by yet another economist, Professor Layard is now treated as if it is a quantifiable scientific fact instead of cod scientific piffle. By building in spurious economic implications of the worst case scenarios of climate change, dubious quality of life issues and pseudo-psychological guff about the economic measure of personal well-being, the cost/benefit analysis of transport networks can be made to do whatever you want it to.
But in essence, accepting the central importance of carbon emissions and the need to reduce them by any means necessary, undermines the argument for increased transport provision, since that means more emissions. If carbon counting became an Olympic sport, Britain would certainly win gold. The latest target figure that has been accepted in most radical environmental circles is that we need to reduce emissions by 90 percent in order to forestall global disaster. However, this hasn’t come from the IPCC (who are due to report next February) but from that other great environmental authority, George Monbiot who says in his latest best-seller that he got the figure from a bloke called Colin: a Friends of the Earth activist from Dundee who has no need, apparently, to explain where the evidence for this unfeasibly high figure came from.
I believe that those who want better infrastructure and greater mobility need to downplay the so-called harm that carbon does. Yes global warming is happening, yes it’s a potential problem, but we will be helpless to do anything meaningful about it unless we put some political ambition, technological aspiration and social advancement back on the agenda. This report does none of those things.
Austin Williams is organising a London seminar (February 29th) challenging the pseudo-scientific, therapeutic claims made for urban infrastructure.