The scandal of voodoo economics

The ‘research’ carried out to justify opposition to Westminster’s new night time parking restrictions has got me so enraged that I can barely articulate my contempt for it. It is a quite disgraceful use of supposedly ‘independent’ research to back up a conclusion which had already been made long before any work was carried out.  And the Standard has not only splashed it all over its front page, but also, in a leader,suggests that it provides strong evidence for the damage that the new parking restrictions will cause.

It does nothing of the sort, and should be a stain forever on the work of the authoritative sounding Centre for Economics and Business Research whose reputation will be deeply damaged by associating itself with such nonsense.Rant over, here’s the facts: the ‘research’ claims that 5,000 – well 5,100, actually, to give it spurious accuracy – jobs will be lost as a result of the new charges of £4 80 per hour between 6 30pm and midnight. On what does the researcher base this extraordinary claim? Well, the report says that there will be an £800m loss of output which will come from catering – £330m – entertainment – £314m – and retail – £145m (despite the fact that most shops are closed by early evening.

So where do these figures come from? Well it is difficult to say. The report, which cost a mere £10,000, enough for say 10 days work at best from an average consultant,  admits that : ‘There was not scope for a thorough investigation of the business and economic impacts of the new parking charges. However, we have made some indicative estimates based on some rough-and-ready, yet not implausible, assumptions’.  There is then some detailed ‘analysis’ of each sector which amounts pretty much to more guesswork. In fact, delving further, the report reckons that the total income generated by the West End is £88bn,and therefore the £800m figures represents a mere 1 per cent, which is hardly significant.

The figures are also based on the CEBR’s estimate – for which there is no evidence – that between 20 per cent and 25 per cent of evening visitors come to the West End by car, an impausably high figure when normally, as the report admits, private car’s modal share, excluding taxis,  in central London hovers around the 10 per cent mark. From this, the report extrapolates that there will be loss of profits of  ‘£714 million and a predicted loss of almost £590 million in the West End’.

So at best the report is based on , euh, ‘not implausible’ assumptions. In my language, that’s called guessing. The report’s author, clearly a bit abashed at pocketing £10k for this rubbish, admits ‘Note that we do not pretend that our analysis is anything other than indicative’  Yet, by splashing with the 5,000 jobs figures and saying in a leader that ‘we now know just how great that cost [economic cost of the restrictions] islikely to be the Evening Standard suggests that the figures are authoritative. This is junk research given credence by junk journalism.

Shares