Why 80mph speed limits will damage the economy

Much has already been written about the environmental and road safety implications of Phillip Hammond’s plan to raise the speed limit on motorways to 80 mph. It’s been correctly argued that the increase will lead to a rise in serious accidents and carbon emissions, but hardly anyone has so far looked at what economic effects it might have. In fact, this is where the greatest consequences may lie.

Let me explain. Last year in Britain, cars travelled  a total of 243.8 billion miles, roughly 48.3 billion of which were on motorways. If we take average fuel consumption for these journeys at a rather optimistic  46.4 MPG (the average of official overall fuel consumption figures for new petrol and diesel cars) then drivers on motorways alone used 4.8 billion litres of fuel in 2010. In itself that is a colossal figure, but what difference will the speed limit make? Studies vary, but the general consensus is that the rise to 80 mph will increase fuel consumption by 10- 20%. If we use 15% as a reliable average, 720 million more litres of fuel will be used each year as a result of the change. The environmental impact of this has been well documented, but the cost aspect has not.  Fuel prices currently average around 137.2 p a litre, which means that the increase will cost British motorists £988 million every year. And that’s not the worst of it. These figures are optimistic, based on new cars in laboratory conditions. In the real world the fuel bill is likely to rise even further.

Of course, the Department for Transport has a counter-argument; that the change will save everyone time and therefore get the economy going again. Not only does this point rely on a rather tenuous link between quicker journeys and productivity, but it also falls apart when the figures are examined. The 86.2 million hours that the speed limit increase appears to strip from journey times seems quite impressive, until you realise that to make up for the cost of additional fuel that is being used motorists would have to use that time to earn at least £11 extra per hour saved! Clearly there will only be marginal, if any, economic benefits from 80 mph speed limits.

So why is DfT pushing ahead with a plan that will hurt the environment, the economy and road safety all at once? The answer is surprisingly simple. Through fuel duty and VAT increased fuel use from the change will net the Treasury at least £615 million per annum, more than a half a billion pounds. Far from getting Britain moving or revitalising the economy the speed limit rise is little more than a stealth tax. For me, such a small gains can hardly be worth the damage it could do to both to family budgets and Britain’s attempts to cut greenhouse gas emissions.

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What Lib Dems should be saying on the economy

It has always been the temptation for Lib Dems, especially when in opposition, to ignore the big issues of the day in favour of time-worn favourites; the environment, electoral reform and civil liberties. To a certain extent that has had to change now we’re in government, but the perception remains. Too often it seems to the public that the Tories are running the economy by themselves, while we tinker with whatever scraps they throw us. If we want to become a serious party of government we must change this image and show that we are having a major influence on the government’s economic policy. Now offers the perfect time to do so, with new ideas needed to maintain austerity and yet promote growth at the same time. Lib Dems can provide those ideas and turn ourselves into a party with real economic credibility, but only if we take the right decisions.

Firstly, we must continue to support the government’s deficit reduction target, simply because to do otherwise would be both political and economic suicide. But now the first round of cuts have done their job, with confidence restored in the markets and the foundations for future fiscal discipline in place, the focus must return to trying to force some growth out of the economy. To do so Lib Dems should advocate that between £7-12bn is invested back into key drivers of economic growth; enough that it would provide a real boost to production, but not enough to endanger the deficit reduction programme. However, this money should not be wasted on huge infrastructure projects that have dubious economic gains, cost a great deal of money and rarely benefit anyone but big business. Instead we should aim for more liberal schemes that provide advantages to all and revolve around key growth industries. For instance, a big investment in broadband availability, especially in rural areas, could open up a whole new market to thousands of SMEs, allow consumers to more readily access a whole raft of online companies and generally take the shackles off an industry that shows phenomenal potential for the future. The same goes for renewable energy, which is taking off properly for the first time in many parts of Britain, but still requires large amount of capital and infrastructure investment to succeed, which the government could help to provide. In fact the list of growing sectors that could really benefit from a relatively small amount of government support goes on and on, and besides any of these focused projects would almost certainly drive growth faster than the old-fashioned ideas of building spectacular bridges or motorways. We would be crazy not to push for such simple, but effective idea.

Lib Dems also need to keep pressing for increased lending to businesses, especially SMEs. The current measures, implemented by Project Merlin, are clearly not working well enough and the banks are still reluctant to lend to anything other than a totally safe bet. The time seems to have come, therefore, for the government to provide loans direct to companies. There are a number of ways this could be achieved, but the two most likely would be the Bank of England using a complicated technique to increase lending to businesses instead of quantitative easing, or through the founding of some form of government bank or agency to dispense loans. Either method would undoubtedly give a great boast to ambitious start-ups and growing companies who want to expand their business, and in so doing drive some growth into the economy. Over the long-term it would even help reduce the deficit, as the initial outlay would be more than payed back through interest repayments. All in all it would a very sensible, business-friendly way to grow the economy, and one that Lib Dems should support.

As a party we must also enure that the financial crisis is dealt with in concert by countries around the world, in the best Lib Dem traditions of internationalism. In particular we must ensure that Britain does not draw away from the negotiations on the future of the Eurozone. We may not be part of the Euro, but that doesn’t mean we won’t be affected if it collapses, and we should make sure that we do all we can to support our European neighbours and guide them down the correct path. Similarly, we should make absolutely sure that the eurosceptic Conservatives do not weaken our relationship with the EU. Now, more than any other time we should value and protect the billions of pounds generated by our trade with Europe that would not be possible, or at least, not as profitable, without the benefits of the European Union. Lib Dems in government should also work to sign more trade deals with countries around the world to create as much overseas business as possible for British companies, not less as many Tories might want. And finally, we must ensure that populist protectionism does not, as seen over issues such as Bombardier, does not damage the principles of free trade that add so much to the British economy, both at home and abroad. In short, these are all traditional Lib Dem aims and ideas, but also ones that will help the economy in these desperate times, and so we must fight to protect them.

In the same light, Lib Dems must attempt to reverse the government’s policies on immigration that are doing a great deal of damage to Britain’s chances of experiencing economic growth in the near future.It is now widely accepted that the long term economic advantages from migration more than outweigh the short term social costs from increased use of health and education services. When the economy is struggling to grow at all it  seems crazy therefore for the government to carry on its draconian cap on skilled migrants from outside the EU, especially when companies are complaining that there is a shortage of just these kinds of professionals.Furthermore, we need to show that migrations can be an economic success to convince a sceptical public  that our social policies are correct. Once again, Lib Dems must champion something that Tories fear to for the greater economic good of the country.

Lib Dems must also push for reform of the tax system. In particular, we should call on the government to accelerate plans to increase the income tax threshold, and to bring it up to the level of £12,500, the amount earned by someone working full-time on the minimum wage.  This would not only be fairer, but drive consumer spending (and therefore growth) organically, from the bottom up, as opposed to through the unsustainable expenditure of the wealthy. The big question of course is how to pay for it. In truth there are a number of ways. Lib Dems have been pushing for some time for a Mansion Tax, or something similar, to be introduced, which would more than cover the cost, as would some form of the Financial Transactions Tax (variously known as an FTT, Tobin Tax or Robin Hood Tax) proposed by the European Commission this week, as long as it was implemented across all of the major economies, including America. At the same time we must keep the pressure on George Osborne to keep the 50p tax rate. Not only does such a stance play well politically, but it is also the right thing to do morally and economically. However, the boldest reform that we should lobby for is the abolition of the personal allowance. Why, you might ask? Because, to take one example, because of the personal allowance in absolute terms the Lib Dem policy on raising the income tax threshold (and thereby the personal allowance) would benefit people on the highest rate substantially more than those on the lowest. It would be far more progressive, and simpler, to reduce tax rates, but make people pay tax on all of their income. With these initiatives we could make a big difference to the economy, through relatively minor changes to the tax system.

Finally, we need to make sure that the banking system is truly reformed and not just tweaked, as no doubt George Osborne would prefer. The Vicker’s reforms are a start and we must make sure that they are implemented as soon as possible, especially with British banks’ exposure to Greek and European debt, but we also need to go further, particularly on increasing the number of banks and the competition between them. Until that happens we will always have banks that are “too big to fail” and have to be bailed out by taxpayers. Personally, I would also favour a full split between investment and retail banking, but many think that Vickers goes far enough in proposing a firewall between the two. Whichever way, with the Tories reluctant we must make sure that these reforms are passed into law, to ensure the safety of our financial system in the years to come.

Not all of these ideas would become law due to Conservative opposition, but if the Lib Dems were to take these ideas, promote them, build them into a kind of mid-term economic manifesto and get at least some of them passed into law we can be sure of two things. Firstly, that they would help put some growth in the economy and probably set us on the road to a full recovery, and secondly that our economic credibility as a party would be, if not quite complete, then certainly a lot more secure. If we decided not to, on the other hand, we would probably be doomed electorally as puppets of the Tories and growth would be damaged, if it existed at all. With such rewards on offer, and such risks to avoid, it would be foolish not take the chance.

What Cory Wheelabrator did next

It’s not really surprising that Cory Wheelabrator  are a little bit desperate. 93% said no to the King’s Lynn incinerator in a West Norfolk referendum. 97% said no in the Norfolk-wide planning consultation, including the majority of parish councils that responded. 22 local doctors, the Environment Agency,  Natural England,the Eastern Inshore Fisheries and Conservation Agency, the Norfolk Wildlife Trust and the Wash Estuary Strategy Group have all raised serous concerns or objected to the plan. However, their latest ploy really is something.

Yesterday, there were a few reports that a survey team was going door-to-door asking questions about the incinerator. One person they asked was allowed to see, and write down, what was on the survey paper, which has since been forwarded to me. Here it is;

1) The Willows Energy-from-Waste plant is a proposed development on the Saddlebow Industrial Estate, to the South of King’s Lynn , that will deal the bulk of non-recycled household waste in Norfolk . Have you heard of the Willows?
(Yes, No, Don’t Know)

2) If Yes, …. how did you hear about it?
3) In general terms, do you think it is right for waste left after reuse and recycling in Norfolk to be safely burnt, to produce energy, rather than being landfilled?
( Yes, No, Don’t Know)

4) Do you have any particular areas of concern about the Willows proposals, or any topics on which you would like more information?

5) Which of the following statements best describes your opinion about the Willows proposals?
(I support; I support this proposal but have some reservations; I have some concerns about the proposal; I oppose the proposal; I have no strong feelings about this proposal).

6) Do you have further questions or comments to add?

7) If supportive in answer to Question 5 – Would you be interested in submitting your views to the Council or in receiving more information updates from us? (If YES, collect contact details including email and telephone number).

There are couple of points to be made here. Firstly, nowhere does it mention the word “incinerator”, which is what this proposal is known as by most people. I wonder how many won’t have a clue what the survey means because of this choice of words, and therefore not answer as they would want to? In addition, the questions are clearly enticing people to say they support incineration, particularly Question 3 which gives only the option of landfill or incineration, and makes it sound as if waste is already recycled as much as possible.

Most importantly, though, is Question 7, which asks only people who support the incinerator whether they might be interested in writing to Norfolk County Council or getting updates from Cory Wheelabrator. In other words, they are trying to get as many people as they can to tell NCC that they support the incinerator. Not only is this obviously an act of desperation because practically nobody supports the plan, but personally I also think it’s disgusting that part-way through the planning process the applicant is essentially paying for people to go out and find who supports the idea, so they can get them to write in. We can only hope that people see this for what it is; a clever ploy by Cory Wheelabrator.

UPDATE: The survey is being carried out by a company calledhttps://jonaholiver.wordpress.com/wp-admin/post.php?post=90&action=edit Bellenden, which specialises in political, planning and corporate communications, who have been hired by Cory Wheelabrator. Perhaps surprisingly, as far as I can see (and I have not yet verified this), Bellenden is not a member of the British Polling Council. Of even greater interest, however, is that Norfolk County Council has hired Bellenden as a consultant on campaigns previously, most notably regarding the dualling of the A11. In fact, Daniel Cox, the ex-leader of NCC gave a glowing appraisal of the company saying

“By working together, we have achieved a stunning victory to bring forward completion of the dualling of the A11 by 18 months. Bellenden’s advice and engagement with decision makers in Westminster has been an important part in our success.”

However, they don’t seem to have been involved in this latest act.

Did Norfolk County Council break its constitution?

If you’re wondering what I’m referring to, you can read the full story of what happened yesterday on my last blog. Basically, the Lib Dems walked out of full council at County Hall because of the disgraceful conduct of the meeting, and the way they were not allowed to reply to a closure motion on their own motion or ask points of order. However, Norfolk County Council appears to believe that this was all constitutional and that nothing was wrong with the meeting. Having looked through the constitution I have to disagree. As far as I can see yesterday’s meeting was a serious breach of the constitution. I lay out why below.

  • In yesterday’s meeting the Chair refused to take points of order from Labour, Lib Dem and Green councillors. However, Appendix 9 12.12 of the NCC constitution states;

“A member may raise a point of order at any time. The chairman will hear them immediately.”

  • Paul Morse, the Lib Dem group leader and proposer of the original motion was only allowed to get a few sentences into his introduction before he was interrupted by the closure motion, but Appendix 9 12.4 is clear that;

“Speeches must be directed to the question under discussion or to a personal explanation or point of order. No speech may exceed 5 minutes without the consent of the chairman”

  • Furthermore, the closure motion was introduced before Cllr. Morse had finished his speech, despite the fact that Appendix 9 12.11 a) says that;

“A member may move, without comment, the following motions at the end of a speech of another member”

  • Once the closure motion was put Cllr. Morse was not even allowed a right of reply, even though Appendix 9 12.11 b) states that;

“If a motion to proceed to next business is seconded and the chairman thinks the item has been sufficiently discussed, he or she will give the mover of the original motion a right of reply and then put the procedural motion to the vote.”

That’s four points where I believe that the Norfolk County Council constitution was breached. How can the decisions the council took be legitimate when they were so profoundly against the constitution? They can’t and that’s why I hope as many people as possible will make formal objections to NCC, asking for the decision to be struck down and the motion heard again.  This is no way to run a county, and the people of Norfolk must hold their representatives to account.

Drama at Norfolk County Council

As many of you will already have heard today was Norfolk County Council’s full council meeting, which every member can attend. Up for debate was a motion tabled by Paul Morse, the leader of the Lib Dem group at County Hall, which called for an independent investigation into the process that led to the procurement of the King’s Lynn incinerator. The text of the motion is here;

“This Council is concerned that the behaviour of the
Council Leader and Cabinet Members within the decision
making process for the award of the contract to build an
incinerator at Saddlebow is bringing Norfolk County Council
into disrepute, and has not met the standards of open &
transparent decision making expected by the people of
Norfolk. In particular, though not exclusively, this Council is
concerned about proceedings at the March 7th Cabinet, the
impact of any decisions made at the Conservative Group
Meeting three days earlier and any pressure exerted
upon members of Cabinet Scrutiny Committee.

This Council therefore instructs the Chief Executive to initiate a
full, public and independent investigation by an appropriately
qualified independent body into the behaviour of the Council
Leader and the Cabinet in this entire process. Should this
investigation establish that at any point the Council Leader or
any Cabinet Member misled the public or Councillors or that
they did not act in accord with the Constitution, they
should relinquish their position with immediate effect.”

There was some debate about the wording, but all the opposition groups and most anti-incinerator campaigners agreed with the intent. However, no one really expected it to be passed because of the huge Conservative majority (38 seats).

What actually happened, though, was quite a shock. The debate on the motion started with the whole cabinet and Janet Murphy, the leader’s wife, declaring a prejudicial interest as they were implicated in the motion, or related to someone who was. David White, the chief executive (not strangely Victoria MacNeill, the head of law) then gave his legal opinion that the debate should not go ahead because it would damage NCC’s defence against the ongoing judicial review. As we will see below that claim is largely nonsense.

However, what came next was a real surprise. Roger Smith, a loyal Tory backbencher put forward a closure motion, which would mean that the Lib Dems’ motion would be ignored, and the council would move on to the next item on the agenda, even though the motion hadn’t been introduced by Paul Morse! This was immediately pointed out by George Nobbs, the Labour group leader, forcing the Chair, Shelagh Hutson, to reluctantly allow Morse to talk, but only if he introduced the motion and didn’t speak in support of it, a rather impossible task.

He had only just started speaking, explaining how Norfolk County Council’s defence in the judicial review couldn’t possibly be compromised by the debate or an independent investigation, as long as the people concerned had told the truth and continued to do so, when the chief executive advised the Chair that the closure motion meant that Paul Morse wasn’t even allowed to speak for the five minutes the constitution allowed.

About this time councillors from Labour, the Lib Dems and the Greens started trying to put points of order to the Chair, but after the first few these were declined. Everyone I’ve spoken to, including current councillors,  said it was almost unprecedented in local government for a Chair not to take a point of order. John Dobson, one of the few Conservatives to openly oppose the incinerator pointed out that Paul Morse had the right to reply to the closure motion according to the constitution, but the chief executive said this was not the case and that it was at the Chair’s discretion whether there should be a debate on the closure motion, or not. At this point it is probably worth mentioning that it was Dobson who is often credited with writing the current Norfolk County Council constitution. Cllr. Hutson decided that a democratic debate was not needed and moved to a vote.

All the Lib Dems in the chamber then walked out in protest at the conduct of the whole meeting, joined by Andrew Boswell, the Green Party Environment and Waste Spokesmen. The public started slow handclapping. By this point the meeting was in chaos; the opposition kept calling for points of order, the Tories were heckling back and the debate was being controlled by whoever had the loudest voice, not the Chair. The vote still went ahead, and without the Lib Dems, the Conservatives won an easy victory. The public proceeded to walk out. Many Labour and Green councillors only stayed because they had to debate the next items.

In short, it was a disgraceful meeting. Members weren’t even allowed to debate a motion on whether they should debate another motion on whether to hold an inquiry! It would certainly appear that the provisions of the constitution were breached several times, and the general behaviour of Conservative councillors was despicable. Yet again we see Norfolk County Council refusing to engage in democratic debate simply because it may be embarrassing for his party. We can only hope that somebody takes notice of the flagrant abuses of power and authority we are now seeing, and holds them to account for their actions.

The Incinerator Paradox

The King’s Lynn incinerator is a sufficiently controversial subject that I would imagine that most people in West Norfolk have formed some opinion about whether it should be built or not. 65,516 have made their views very clear indeed. Don’t worry if you haven’t though because, whether you realise it or not, you’ve already taken sides. Both of them in fact.

Confused? Let me explain. One of the ways that the Borough Council of King’s Lynn and West Norfolk has come up with to fight the plan is the allocation of around £150,000 for legal fees. It is expected that this would be used at some point in the future for a judicial review against the way Norfolk County Council has dealt with the whole saga. So far so simple. However, any legal action would be taken against the county council, who would have to set aside money for their own legal costs. NCC is already fighting a separate application for a judicial review from the campaigner Michael de Whalley. The costs of the two will probably spiral into the hundreds of thousands, and may even reach into the millions. And of course, both of these will be funded by the taxpayers of Norfolk.

So every West Norfolk taxpayer is paying for, and therefore supporting, both sides. You see what I mean about a paradox. But there is a serious point here. What could be more absurd than our taxes  being squandered in contrary legal challenges that no one really wants, and shouldn’t even be needed, just because Norfolk County Council refuses to listen to the democratically expressed views of West Norfolk? Particularly at a time of deep cuts to vital services, it has to be asked why the county council won’t just do the decent thing and scrap the whole sorry idea.

Norfolk County Council admits it doesn’t have enough expertise for incinerator planning application

Recently there have been a number of calls for the King’s Lynn incinerator planning application to be called in. The arguments for this are quite simple; how can Norfolk County Council impartially judge whether the incinerator should go ahead, when senior officers and cabinet members have been promoting its virtues for over a year? Naturally, the county council has been desperate to prevent this happening, saying that as Waste Planning Authority they are the most appropriate body to take the decision.

So imagine my surprise when I found this quote in a planning submission from Norfolk County Council’s own employee, Ed Stocker;

“I also question whether we can base the Appropriate Assessment on the applicant’s conclusions of their own data. NCC does not employ anyone who is qualified to interpret the air quality data and predicted levels of impact on marine life, (primarily shellfish).

We would need to employ an expert to advise on that part of the Appropriate Assessment”

In other words Norfolk County Council lacks the expertise to determine whether the plan would have a significantly detrimental effect on ecology, and would have to employ external consultants. Inevitably that will cost even more (adding to the £5.2 million already spent by NCC on this project ), at a time when services for young people and vulnerable OAPs are being cut. Surely it would make more sense for the county council to support the call-in so that an entirely impartial inspector, with all the expertise needed available, could make the decision, eradicating all concerns about cost and objectivity. The question is, why won’t they?