Philip Hammond, the Transport Secretary, clearly sought to please the crowd at the Tory party conference by repeating the commitment to move to increase the speed limit on motorways from 70 mph to 80 mph. Certainly it seemed to have gone down well among those who believe there really was a ‘war on the motorist’ conducted by the Labour government, but actually Hammond has opened up a can of worms by suggesting there are ‘net economic benefits’ to the move.
In fact, there are wider implications for both roads and rail by increasing the limit. Environmentally the effect will be damaging with an increase in emissions, and there are obvious safety implications. However, it is the economy that accounts, or, at least the Hammond view of it, and that now overrides all considerations. The notion of this government being the greenest ever has surely lost all credibility.
In his speech Hammond suggested that the move would improve productivity and deliver ‘hundreds of millions of pounds of net economic benefits’. Moreover, the man who has admitted he has picked up three speeding points in the past, argued that it would be ‘putting Britain firmly in the global economic fast lane’. He based these claims on an analysis by the Transport Research Laboratory (‘An evaluation of options for road safety beyond 2010’, available at http://www.trl.co.uk/online_store/reports_publications/) which looked at a the cost benefit analysis of a variety of options for roads policy, including both reducing and increasing speed limits, and the widespread introduction of 20 mph zones in built-up areas. Interestingly, because of the expectation that a higher speed limit on roads would lead to more deaths, the 80 mph option was only looked at in less detail than other proposals but it is the option that Hammond has picked up on.
Certainly, in the analysis, it did show a positive result in terms of the benefits. These analyses are carried out on the basis of Net Present Value which means they look at the impact over time and then ascribe the benefits an ever decreasing value over time for the simple reason that £10 in your pocket is worth more than a promise to have £10 in five years time. The rate at which the values are reduced – the discount rate – is now 3.5 per cent per year (3 per cent after 30 years).
The benefits calculated this way of increasing the speed limit were found to be reduced journey times of 4.1 minute per hour, though this assumed that everyone currently obeys the speed limit – and that the new 80 mph would be enforced by the installation of a series of 800 camera systems to monitor average speed. On the downside, there would be extra emissions of both carbon dioxide and nitrogen oxides of around 1.7 per cent, and of course extra casualties amounting to 18 deaths per year, plus 64 serious injuries and 363 minor ones.
Nevertheless, according to the impersonal gaze of the cost benefit analysis, the effect of the extra deaths – calculated at £5m each – will be outweighed by all those 4 minutes per hour saved by the survivors being able to whizz around the motorway network more quickly. In all, over a ten year period, the Net Present Value will be £2bn, hence Hammond’s statement about millions of economic benefits. The way that Hammond talks suggests that this is real money, and that Britain, as a result will be in the fast lane. This , of course, is nonsense. It is very unlikely that many of these saved minutes will be used to boost Britain’s productive capacity.
If Hammond had got up and said, ‘I am going to cause an extra 18 deaths on the motorways every year’, I suspect he might not have got much applause. Imagine if he had said that about the railways. I’m sure he could find the odd speed restriction which could be removed that would cause only the occasional derailment or perhaps he could reinstate passenger-operated doors – much faster than centrally locked ones even if a few more people would fall out of trains.
Now actually, I quite understand that safety measures need to be assessed in terms of the economics. But this is a misuse of the methodology of cost benefit analysis. There were other suggestions in the TRL report with a higher net present value, such as doubling the road safety engineeering budget which would have a dramatic increase in road safety. Indeed, while raising the speed limit would produce some economic benefit in the narrow terms the analysis, Hammond failed to mention the conclusion of the analysis which said: ‘However there is an increase in casualties which makes the proposal unacceptable to DfT as part of a road safety strategy’.
Not, it seems any longer. There is an implicit implication in the decision that suggests Britain’s roads have become a bit too safe. There has been a stunning reduction, with deaths being cut by 75 per cent since 1965 and last year’s total was a historic low at just 1,857, a fall of 16 per cent on the previous years. However, instead of trying to work towards a zero death rate, as they are in Scandinavia, the Department is actually suggesting that the roads should become more dangerous again. The Department argues that since vehicles have become safer thanks to technological advances – actually much of it is down to stricter drink driving laws and seat belt legislation, the sort of things that the Tory right opposed when they were introduced in the 1960s and 1970s – ‘the government feels it is now time to look again at whether the speed limit set in 1965 is still appropriate’.
Of course, most probably by the time the extra deaths occur, Hammond will be elsewhere. But his fellow ministers should beware of the most famous misuses of cost benefit analysis, the Ford motor company’s decision in the 1970s not to recall the Pinto, a car which had a rather worrying tendency to burst into flames when involved in a rear-end shunt. Ford carried out a cost benefit analysis which showed that the cost of recalling the model and fitting the alterations was more than the cost of the injuries and deaths and the subsequent lawsuits likely to be caused by the fault. Ford failed to take into account the bad publicity that resulted from the accidents and though the precise number of deaths and injuries is a subject of dispute and there are even doubts whether the Pinto was that bad, the damage to its image was longlasting. A big rise in road deaths – whether related to the change or not – will come to haunt Tory ministers.
All this is not only revealing of the Tories’ transport policy and its emphasis on economic growth at the expense of the environment and safety, but it is relevant to the railways for two reasons. First, by making it possible to travel faster legally – make no mistake, but the same 49 per cent who currently break the law will do so again, simply travelling at nearly 90 mph rather than the 80 mph they do at the moment especially as Hammond made no mention of the extra speed cameras which the TRL said was a necessary prerequisite – rail travel becomes comparatively less attractive. The policy will make the car superficially that much more attractive than the train.
The second reason is the application of cost benefit analysis to the policy. Hammond seems to have missed the point that he is actually undermining the case for high speed rail since motorists will now save less time by using the train than they would otherwise. If their car journey is shorter, this reduces the benefits in the HS2 so called ‘business case’ for the 8 per cent of users who are slated to be attracted onto the trains from their cars.
Although ultimately the difference may not be enough to change the benefit cost ratio for HS2 significantly, this example highlights the precarious nature of the business case. Whereas ministers confidently speak in public about £2 benefits for every £1 spent, in truth this is a very moveable feast, It is indeed ironic that by changing the law on motoring, the case for HS2 is weakened. Who knows what other changes will be made in the near decade before the first sod of earth is turned to start building the line?
Amtrak, how not to run a railway
For the second time in a year, I travelled on Amtrak, the American federal-owned passenger railway, partly to research my forthcoming book on American railways. This time I took a couple of trips in the north east, the busiest part of the network, whereas last time I had travelled all the way around the country. Again, however, I was left wondering aghast at how the richest nation on earth ended up with such a poor passenger rail service.
Travelling by train in the US is made harder by the obstacles placed in passengers’ paths. You are supposed to buy your ticket in advance, and have to present ID when you do so. Then you are told to arrive at least 15 minutes before departure but not allowed onto the platform until just before the train arrives, ‘for your safety’. Then your ticket is checked on the way to the platform, and again on the train,and woe betide people without ID. Then oddly, the conductor on board checks it again and issues you with another ticket which he sticks on the rack above the seat. The overmanning is ridiculous as there is a conductor for every two or three coaches, and not surprisingly most of the time they sit in the restaurant car chatting.
The frequency and speed of trains are also both found wanting. We took a train from Altoona, Pennsylvania, to New York and the journey of 400 miles, the distance between London and Edinburgh, was seven hours, probably the same length of time it took in the early 20th century. And there was just one train per day. Even between major cities frequencies are not mostly not more than one per hour.
Amtrak cries out for reform and cost cutting. It is hamstrung by the fact that most of the track is owned by freight companies hostile to passenger rail. And it has never had enough money for investment, though it gets around $1bn (£630m) per year to carry 30 million passengers. A competent railway operator could undoubtedly get more out the service for the same bucks.
But two things Amtrak beats British railways hands down: fantastic leg room – in reversible seats – on every train – and few but very relevant announcements, though once or twice there was a ‘suspicious package’ message from Amtrak. Nevertheless, despite the clunkiness of the service, it is still the best way to travel between the various cities of the north east, and elsewhere if you want a slow ride through this vast country.