Sanjoy Sen: Smart motorways need improvements. But there’s no getting away from the self-driving revolution.

8 Feb

Sanjoy Sen is a chemical engineer in North Sea oil. He contested Alyn & Deeside in the 2019 general election.

Back in 2017, I spoke of little else than my new set of wheels. First, the smug satisfaction of trading a gas-guzzler for a hybrid. Later, the anguished howls as Sadiq Khan cancelled its Congestion Charge exemption.   

But I never got round to explaining the main reason for swapping. Saving money, cutting emissions and even virtue-signalling all had their attractions. But what really got me motivated was good old-fashioned self-preservation. 

The aged tank was serving me well until it let me down twice in rapid succession. Getting stranded on the motorway on both occasions was no fun but at least I had a (hard) shoulder to cry on. I certainly wouldn’t have fancied the same experience in a “live” lane of a smart motorway, hoping everyone would spot me in time and swerve past. With the M1 getting progressively converted, I resolved to investigate scrappage schemes and find more reliable transport.  

By early 2020, there had been 38 fatalities on UK smart motorways. But it’s important to relate this figure to a baseline. Sadly, there are fatalities on all motorways so the first question is whether smarts are safer (or not) than conventionals. But scientific analysis is one thing. Public perception is also highly relevant. This matters when we reflect on how transportation is going. 

According to the stats in the Department for Transport Stocktake and Action Plan, smart motorways are slightly safer overall than conventional ones. That’s said to be because spreading traffic over more lanes and adjusting speed limits to conditions improves driver behaviour, thus reducing moving collisions.  

But what is going badly wrong is the rise in static collisions involving broken-down vehicles. The allegedly smart systems don’t always spot the obstacle (i.e. you) in a “live” lane. And even if they do, they rely on every single road user rapidly bearing down on the stationary object (again, you) and taking evasive action. Worst of all, there’s often no safe means of escape for vehicle occupants before rescue arrives.

Following a 2019 fatal accident in South Yorkshire, the coroner called for an enquiry into smart motorway safety. The local Police and Crime Commissioner has called for their ban as has Claire Mercer, wife of one of the victims. Tellingly, Mercer considers the jailing of the Polish lorry driver who hit her husband’s car as the wrong outcome. And following another South Yorkshire crash, the coroner indicated Highways England may face manslaughter charges

One of these days, when cars are all smart, we can safely have smart motorways. (More on that in a moment.) In the interim, the Government needs a clear plan to reduce accidents and restore trust. 

Right now, there are three types of UK smart motorway. Controlled Motorways (CM) retain the traditional permanent hard shoulder but have a variable speed limit. It’s the other two that raise most concerns: in All-Lane Running (ALR) motorways, the hard shoulder is permanently “live” while, more confusingly, in Dynamic Hard Shoulder Running (DHS) motorways it sometimes is and sometimes isn’t. It’s a (minor) step in the right direction that DHSs are being turned into ALRs.  

Few of us get to pick where to break down but in some cases (e.g. a puncture) it is possible to limp along to the next refuge area. The Stocktake calls for these every three-quarters of a mile but we might need more still in places. And they need to get a bit longer so you can accelerate off them safely to prevent the type of accident already seen. Plus better monitoring to detect stationary vehicles, both via technology and increased patrols.  

But the fundamental question is not whether we can make smart motorways safer (we can) or whether we can eliminate accidents altogether (we can’t): it’s do we actually need them? The short-term and the long-term answers could differ. 

The Stocktake notes motorway traffic has increased by 23 per cent since 2000 and contends smart motorways have helped absorb this. But, like most transport infrastructure, motorways are sized for rush-hour demand. With work patterns set to permanently alter post Covid, that peak potentially flattens. With, say, 20 per cent fewer office workers commuting (analogous to working from home one day per week), that translates into a significant reduction. So, with reduced road use a possibility, we could re-examine our traffic projections. On some motorways, we might discover we don’t need to drive in the hard shoulder, after all. 

Further down the line (but not much further), however, transportation is on the cusp of a revolution. Within a decade, vehicles are not only set to go electric, they’ll also become highly autonomous. Yes, some might write all that off as unrealistic, “woke” nonsense but even the quickest search on what real-world car companies are actually up to suggests otherwise. And when vehicles become smart (and can automatically respond to hazards), smart motorways finally make sense.  

Although UK motorways are among the safest in the world, the traditional hard shoulder has never been without its risks. Such facts are little consolation to those affected by smart motorway tragedies, however. If we’re going to retain public confidence, we need to see improvements. Let’s not lose sight of the big picture: post-Covid traffic patterns are set to change things but nothing like as much as the self-driving revolution will. 

Sanjoy Sen: How can the Government accelerate a cleaner, more efficient future for transport?

10 Sep

Sanjoy Sen is a chemical engineer in North Sea oil. He contested Alyn & Deeside in the 2019 general election.

“It’s a bit like saying we’re banning the sale of steam engines by 2040″. So responded Aston University’s David Bailey to the axing of “conventional” (i.e. petrol and diesel) new car sales. As green alternatives improve and prices fall, which they both are at last, today’s vehicles will become obsolete long before any government deadline.

On the face of it, the road to zero-emission transport ought to be straightforward. Anything too big to lug around massive batteries (lorries, buses) works fine as a hydrogen fuel-cell vehicle (FCV). Small stuff (private cars) are well-suited to becoming electric vehicles (EVs). And intermediates (taxis, delivery vans) could be either.

That, of course, overlooks myriad “where” issues: where to source the hydrogen and electricity, where to obtain battery metals, where to plug in. And that’s just one future scenario: the automotive industry is feeling highly uncertain with autonomous (self-driving) technology set to ultimately consign driving and car ownership to history. Furthermore, Covid-19 might fundamentally alter travel patterns, with greater flexibility replacing rush-hour madness.

Here in ConHome last month, Ruth Edwards MP proposed bringing forward the cut-off to 2030 whilst accelerating electric vehicle (EV) roll-out. Although I can’t violently disagree with that, EVs still aren’t an option for everyone yet. Meanwhile, others who could switch remain confused about technology and are wary of legislation changes. So, in the absence of a clear roadmap, how best might the Government help transportation to support the economy – and the environment?

Short-term: all about EVs?

Last year, I made some tentative EV queries. At one leading manufacturer, the UK’s annual allocation had long been snapped up on-line. At another, the dealer had plenty more customers than cars. Whilst I chose to hang back, EVs are fast becoming a practical, affordable proposition for many: it’s supply that can’t keep up until battery production ramps up and new models hit the market.

An increased purchase grant or scrappage scheme would offer manufacturers a much-needed short-term boost. But, as per Norway, could these become largely subsidies for the well-off? There’s only one thing I might contest in Edwards’ article: even Jeremy Clarkson isn’t berating EVs any more, it’s the dearth of plug-in facilities that infuriates him. To tackle the public’s fundamental concerns, government support might be better directed towards the charging network. (And, for that matter, energy storage.)

For many, however, EV prices and charging headaches remain a deterrent for now. But commuting on a small battery backed-up by a petrol engine whenever required might offer a near-seamless transition. So, rather than focussing solely on EVs, let’s see the Government recognise the value of plug-in hybrids and support these also.

But the biggest short-term improvement in urban air quality might be via an early switch towards zero-emission public transportation. Whilst the Government has provided urgent sector support during the current crisis, the Bus Service Operators Grant (BSOG) still favours diesels over FCVs and EVs: an obvious candidate for review.

What does the long-term future look like?

Environmental concerns and new technology put transportation into a state of flux long before Covid-19 did. And no-one seems more uncertain than the automotive industry itself. In Germany, Mercedes-Benz abandoned hydrogen cars just as deadly rival BMW announced its own FCV. Over in Japan, Toyota has long backed hybrids allowing Nissan to forge ahead in EVs, including Sunderland’s top-selling Leaf. Whilst in the States, GM’s Volt competitively-priced plug-in hybrid flopped (Vauxhall Ampera to us) – yet the public just can’t enough of upstart Tesla’s super-pricey EVs.

But there is growing acceptance that autonomous technology will prove a game-changer. Responding to the threat of sector entrants Google and Uber, Volkswagen’s vision of the future is a self-driving, shared-use ‘pod’, summoned up via an app. (So the next time you hear “I’m never buying an EV” or “you won’t catch me driving one of those plug-in things”, you’re probably listening to an enlightened futurist, not a frustrated Luddite.) This is a reality government needs to contend with in years to come, not decades.

Self-driving is often seen in a purely urban context but its opportunities could go much further. In rural areas, bus operators often ditch lightly-used routes uneconomic for a large, manned vehicle. Here, the Government might encourage early adoption of autonomous mini-buses operating in response to real-time demand: the Industrial Strategy Challenge Fund is a welcome first step in this field. As well as a lifeline for the elderly and the socially-isolated, as we work from home in remote locations or commute at different times, it’s economies with flexible transportation that will emerge the strongest post-Covid.

And what shouldn’t the Government do?

Gone are the days when you could freely drive any vehicle down any street at any time. But let’s not make the future any more complicated than it needs to be. In addition to addressing infrastructure bottlenecks and supporting new technology, the smartest thing the Government can do is not confuse or antagonise motorists.

ConHome regulars will recall my satisfaction at trading an ageing gas-guzzler for an eco-friendly hybrid – quickly followed by indignation at the withdrawal of its Congestion Charge exemption. Clobbering folks nudged into doing the right thing might prove highly counter-productive, creating uncertainty and provoking resentment. Similarly, the Scottish government’s Workplace Parking Levy (a hastily thought-out concession to the Greens) penalises those lacking a public transport alternative, whilst in itself doesn’t reduce emissions.

No-one can predict precisely how the future of transportation is going to pan out. But it’s critical for the Government to consult consumers, industry and experts alike before taking the big decisions. The consequences for getting it wrong are significant. Remember, diesels were once touted as the clean future. And why rolling out smart motorways before the advent of smart vehicles was never going to end well.

Ryan Bourne: “Levelling the playing field” is no argument for an online sales tax

5 Aug

Ryan Bourne holds the R Evan Scharf Chair in Public Understanding of Economics at the Cato Institute. 

Some time soon, we’ll see more automation in the fast food sector. Burger-making machines are real. Franchises such as McDonald’s have rolled out self-ordering touchscreens. It’s not difficult to imagine a world in which fast-food worker numbers collapse. In the longer-term, when the technologies become widely affordable to businesses, cost reductions from these sorts of labour-saving investments will benefit consumers through lower prices.

Not every competitor chippie, kebab shop, or burger outlet will make the transition, of course. Some will struggle under what will then become the higher cost, labour-intensive model, finding their niche in the market. Others may simply go out of business – unable to compete on price and without the ability to invest in the machinery.

Would this be a problem? Or is it simply an example of capitalism’s creative destruction? 

Imagine if the struggling companies and their employees demanded Parliament pass a “burger automation tax” under the premise of “levelling the playing field” with those companies that took the plunge. Think how dangerous supporters of consumer-led capitalism would consider it for popular price-reducing innovations to be held up as a problem. Consider how bemused we’d be if the savings in labour costs were dubbed “unfair competition,” simply because not every company realised them.

Well, we are seeing an analogous argument capture policymaking today. And, bizarrely, free-marketeers within the Conservative party are not really speaking out against the muddled thinking.

The UK government is kite-flying about an online sales tax of two per cent, or taxing online deliveries to consumers. One of the many justifications given for even considering these Luddite measures is to “level the playing field” between online retailers and the High Street, given the latter face business rates.

Here’s the problem: there already is a level playing field. Just as all businesses face the same minimum wage laws, they also face the same overall tax regime. This includes business rates – which is a tax on the rental value of commercial property, not sales.

Faced with those policy realities, businesses are free to decide how to operate and structure. Innovative online sellers such as Amazon have simply adopted business models that repudiate the need for a high fixed‐cost physical presence in expensive inner‐city areas.

Operating from out-of-town warehouses is a cost-saving business decision akin to the potential automation in fast food. To then suggest that online retailers not needing to rent high-value property is some distortion of competition that requires a corrective tax, as the Treasury reportedly believes, is just bizarre.

It’s this business decision that partially explains why online sellers can provide low prices for consumers, enhancing their welfare. The idea that adopting this model is some underhand advantage is as daft as saying that Amazon’s packaging costs are a disadvantage for it, requiring a “packaging-equivalent tax” on High Street stores’ sales.

To echo the 19th century classical liberal economist Frédéric Bastiat, the bricks-and-mortar retailers using this level playing field argument are akin to candlemakers petitioning the Government about the sun flooding the market with cheap light.

Now if the Government thinks that the current business rates regime is an inappropriate tax on rental values or has distortionary impacts on commercial property use (I agree, but think the impact overblown) then, by all means, they should change the law faced by all. If councils are worried about car parking charges’ impact on high street retailers, then they are within their rights to adjust them.

But let’s not talk as if it’s unfair competition when firms, faced with a tax regime, innovate to reduce costs to provide a service in a way that consumers prefer. For make no mistake, it is customers that will ultimately bear the costs of any new sales or delivery tax in the form of higher prices, especially those whose use of delivery is less responsive to price, such as in rural areas.

Of course, increasingly traditional retailers are themselves re-orienting to online, especially during Covid-19. Any cuts to business rates (to the extent they are passed through by landlords) might allow for some consumer price reductions to “compete” better with online firms for sales. But if these same traditional retailers then face a new tax on their growing online sales anyway, the Government will have given with one hand and taken with another. 

And which companies will suffer disproportionately from the new administrative burden of having to deal with an online sales tax, do you think? Will it be Amazon? Or is it more likely to be smaller companies navigating the online market for the first time?

This whole debate highlights a broader gripe I’ve had with Conservative policy thinking for some time. Conservatives used to understand the case for consumer-led markets, as extolled by Jeff Bezos in a US Congressional hearing last week. They trusted customers to make choices in their own best interests. Our revealed preferences were thought to represent us trying to maximise our wellbeing under the circumstances we face.

But increasingly MPs seem to think they know better. Sure, customers might be flocking to online retail, especially during a deadly pandemic. But what they really want, we are told, is a thriving High Street. Who you gonna believe: MPs or your lying eyes?

The idea that any business providing the same product must face the same tax and regulatory cost base to truly compete on a “level playing field” is easily dismissed. Wind and nuclear power both produce electricity. But if someone told you we needed a tax on wind power to make up for the safety costs of nuclear, you’d think they were utterly mad. So what do we think is different about retail, after we’ve decided that it’s appropriate to tax commercial property consumption?

Now perhaps the Government’s real aim is not to “levelling the playing field.” Some say a tax on online deliveries would reduce congestion – a daft argument given a van delivering to 30-40 places would cause far less traffic congestion than everyone going to stores. Some say that the Government simply needs the revenue – in which case £2 billion is a relative drop in the ocean. Our communitarian friends, with their stale 1950s vision of High Street’s somehow engendering “community,” want to pull any lever to try to preserve the town centres of yesteryear.

Yet those arguments are self-evidently absurd or futile in the face of ongoing trends. The “level playing field” line is more dangerous precisely because it sounds as if it’s pro-competition. If Conservatives really believe, however, that the role of Government is to correct for businesses finding ways to reduce their fixed costs, as if this were some unfair advantage, then they are further through the economic looking glass than I’d realised.