Congestion charging and brown shoes

There was a bit of a debate at the Assembly’s Transport Committee on Wednesday about the nature of congestion charging.  I made the point that, because the Congestion Charge exists to stimulate behavioural change it should ultimately trend to zero in its projected revenue.  What struck me was that neither Val Shawcross or Jenny Jones could grasp this as a concept, which is illuminating as they are two of the most influential people on Livingstone’s transport thinking.

There is an old saying which states “one should never wear brown in town” meaning brown shoes are inappropriate business wear in the Square Mile.

Never wear brown in town

Imagine I wanted to enforce that tradition by creating a Brown Shoe Charge in The City, people wearing brown shoes would be charged every day that they entered, just like the Congestion Charge. Just like the congestion charge, this would be about stimulating behavioural change rather than a form of taxation.

I expect my plan to be 95% successful in changing people’s brown shoe wearing habits over a 5 year period. So if I get £1,000,000 of charge revenue in the first year I would expect only £50,000 of revenue by the end of year 5 and only £2,500 after another 5 years. My budget would trend towards zero.

If my revenue doesn’t fall it could only because my scheme isn’t working and I would need to think of a different way of getting people to wear black shoes to work.

Why is it those on the left struggle to understand this concept when I talk about vehicles rather than shoes?

8 responses to “Congestion charging and brown shoes

  1. Driving into London is not like wearing brown shoes. I'm disappointed that you can't see that and need me to explain it to you:

    Your brown shoe tax may well trend to zero, but is the congestion charge really meant to eliminate all car travel in London? Do people always have a real choice about travel around London in the same way as they have about shoe colour?

    Deliveries and private use of cars is expected to continue for the foreseeable future, in fact I wouldn't be surprised if it continued to rise. As such revenue is hardly likely trend to zero.

    But surely this should be obvious. Why are you struggling to understand something so simple and blaming your opponents for allegedy failing to understand this?

  2. Jimmy is spot on again.
    What if you had only brown shoes – ie you had no choice but to wear them/enter the zone.

    Another poor analogy bites the dust.

  3. Surely the Congestion Charge merely increases the cost of travel, altering the level of demand to a new price point (in other words, moving demand down to a new equilibrium point).

    In other words, it *won't* trend to zero. It will alter behaviour up to a point, and then stop.

    Nor would your shoe tax trend to zero. You would merely price some people out of the market. But not all people.

    James, I think you've got this wrong (unless you mean something other than revenue, such as profits).

  4. Brilliant! Thank the good Lord that Mr Cleverly is a LAM (salary aside)otherwise we could be in real bother. Although this one is a poor second to the other worldly wise pompous oafery of 'avoid parking fines by not parking illegally'.

    Great material here for 'Cleverly watch'.

  5. Dear all,

    The point I'm making is that behavioural change taxes can either significantly change behaviour, as they are meant to do, and therefore generate decreasing levels of revenue.

    Or

    They are unsucessful in behavioural change in which case they should be seen as just a tax.

    Charles makes the point that in practice they tend to end up as just a tax, a point I agree with.

    If you watch the video of the exchange at the Transport Committee (from 1 hour, 42 minutes in) you can see that I said that if we just concede that the C-Charge is in fact a tax I would be happy to drop the whole “trending to zero” point.

  6. I think you are still missing the basic reason for the congestion charge.

    Numbers of car on London's roads would naturally keep growing as it has done every year since WW2. The congestion charge was an attempt to reduce this growth. I don't have the figures but I believe it has been successful in reducing the growth of car use in central London.

    The exemption for green vehicles, motorcycles, bicycles, and walking has seen an increase in all of these methods of transport, alongside buses and other public transport.

    If it makes you feel better I see no reason not to see it as 'just a tax', just like the duty on cigarettes is 'just a tax'. Both are designed to change behaviour but neither are designed to completely eliminate this behaviour. If the aim really was for everybody to buy green cars then there would be far more effective ways, but the environment is not the primary reason for the c-charge, the main aim is congestion itself.

    Should the majority of people in London switch to electric cars (something that is still a long way off) then I am sure the c-charge would be amended to include them as well. But for the moment the c-charge is one of the few ways that electric cars are being promoted in this country.

    The brown shoes analogy remains a poor one and relies on two assumptions; that all shoes cost the same, and that a general tax on footwear is not introduced in the future – because it is not brown that is the problem, it is shoes.

  7. Brown shoes to one side, as I recall the Dartford crossing was only meant to pay for itself and then wound up. But lo and behold it was sold off to a private company as a very profitable ongoing concern (over 20 thousand users daily).

    Point being – is the congestion charge going to be sold off, or indeed wound down to zero? Interested parties are listening…

  8. Is there any way to convince the US Embassy that the Congestion Charge is a device to change behaviour, and not a tax, so that it pays the ruddy thing?

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