The Samovar


Ideology posing as rationality
August 27, 2007, 11:37 pm
Filed under: Economics, Environment, Politics

One of the defining themes of the New Labour government is that it claims not to do anything ideological, but just “what works”. But in fact, it’s largely just a cover. They invent elaborate and confusing ways of evaluating options so that their preferred choice seems to be objectively the best. PFI/PPP projects are the usual example of this, but this extremely interesting (although a little dry) article shows they’ve been doing the same thing with their road building programme.

Studies show that new roads do not solve congestion – they just generate more traffic. They add to pollution and, of course, they raise Britain’s greenhouse gas emissions. Road transport already generates 142m tonnes of CO2 a year – about 25 per cent of Britain’s total. As the European emissions trading scheme puts an ever-higher price on carbon, those emissions could cost the taxpayer increasingly dearly.

The Treasury and Department for Transport know this, so why do their economists give their blessing to Labour’s £13bn roads programme?

The answer lies far away from public scrutiny in the arcane and biased rules under which proposed roads are assessed. These New Approach to Appraisal (Nata) rules were introduced by Labour in 1998…

Under Nata, road builders such as the Highways Agency and local authorities must submit detailed assessments of proposed transport projects to the government. These are meant to be balance sheets showing the costs, benefits and environmental impacts. In theory this is a good thing, but in reality the rules are designed to make road schemes look better than any greener alternative, every time.

Take section 3.5.11 of the Nata rules. This awards extra points to schemes that generate more traffic because more cars and lorries on the road mean more fuel sales – and hence more tax revenue for the government. By contrast, public transport schemes, which take motor vehicles off the road and so reduce fuel sales and tax revenue, have points deducted.

Then there’s the rule on journey times, where planners can claim that a road will bring economic benefits if they can show it will cut the average journey time of each user. Every minute saved for a car driver is valued at 44p – which can be offset against the cost of building the road.

Just how biased this system can be is set out in the Nata rules that assign lower values to other types of traveller. A minute saved on a cyclist’s travel time, for example, isn’t worth 44p but just 28p. A bus-user’s time is valued at 33p a minute. The implicit assumption is that cyclists and bus-users make less contribution to the economy than car drivers.

Read the article for more… 

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2 Comments

Thanks for the link – excellent article. I’m quite shocked by the sheer arrogance of the DfT in making their own economic valuations of landscapes and natural beauty, and claiming their arbitrary figures are objective. This is an abuse of language – such a method is clearly subjective in the extreme. The idea of assigning an economic value to such things as landscapes, tranquility and biodiversity is extremely distasteful. Also, using a prediction that oil prices will fall 26% by 2025 as a basis for roadbuilding is just unbelievable! Using such a precise figure (26%) is just another way of introducing bogus ‘objectivity’.

Comment by Simon West

Hey Simon, I completely agree of course. It’s quite useful to have such a specific example of the absurdity of their thinking about this sort of thing, which one can only imagine goes on all the time without our hearing about it.

Comment by Dan | thesamovar




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