Steve Luce, The Deputy of St. Martin, and Environment
Minister had this to say about a question on parking costs in town:
“I am not sure if the Deputy means me or the Minister for
Infrastructure but I think that both of us would say there must be a direct
correlation between the price people pay for their parking and their willingness
to use their cars to drive into town. It is one of many on a list of things
which is available to us. Some people would say if you want to force or
encourage people on to public transport, making it more expensive to park their
cars in town, is something that we would need to look at. We will continue to
look at it just like we may also continue to look at the provision that private
people make for parking their cars on private land in town. There are a number
of levers which we can pull and we will continue to look at them.”
Of course, what would be ideal would be for parking to be
directly correlated to amounts going back to transport, for car park
maintenance, and for resurfacing roads, mending potholes etc, but in practice
if more money is levied, it will go into the “central pot”.
This answer doesn’t really make a huge amount of sense. You
can measure price. What is much harder to measure is “willingness to use cars
to drive into town”. Unless you can quantify that in some objective
mathematical way, it makes no sense to talk about a direct correlation. Steve
Luce is using it more as a metaphor, and speaking as a mathematician, it rather
irks me when politicians do this. It conveys a spurious plausibility to their
arguments.
What I suspect the Deputy is really looking more at is
elasticity of supply and demand. In other words, if you put the price up for
parking in town by £x, how much will it diminish the number of road users
coming to park in St Helier.
Differentiating between short-term parking (for shoppers)
and long-term (for commuters) is also a necessity, otherwise there will be
reduced footfall in St Helier, a result that I am sure town retailers would be
unhappy about.
But the oil shocks of the 1970s showed, as E.F. Schumacher
pointed out, that supply and demand for oil is rather inelastic
“It used to be said that the oil exporting countries
depended on the oil importing countries just as much as the latter depended on
the former; today it is clear that this is based on nothing but wishful
thinking, because the need of the oil consumers is so great and their demand so
inelastic [insensitive to price] that the oil exporting countries, acting in
unison, can in fact raise their revenues by the simple device of curtailing output.”
What happens when oil and petrol costs increase is a
marginal effect on behaviour. People question whether they need to make
journeys, they plan ahead more, but they do not give up on the convenience of
their cars. Instead, they cut spending elsewhere, and other luxuries – goods,
holidays, dining out, etc – get scaled back.
The result is a slowdown in the circulation of money, and
that can, of course, impact on other sources of government revenue – in the
case of Jersey, on indirect tax like GST. And that is not just my opinion, the
best evidence we have from statistics on spending patterns backs it up.
J.P. Morgan produced a study based on a massive sample (25 million people!) on
the subject in October 2015. The writers looked at spending patterns in America
and concluded exactly this – note that “gas” is the American term equivalent to
English “petrol”:
“We conclude that people are spending their savings from the
pump to a greater extent than previously thought, and that the recent gas price
declines are fuelling growth in personal consumption in nongas categories. This
boost to consumers spending could be here to stay and even strengthen with time
if gas prices remain low or continue to decrease as predicted. On the other
hand, a substantial increase in gas prices might proportionately dampen
consumer spend.”
What will happen if parking costs increase? Probably much the same as if petrol costs do - a dampening of consumer spending. That is the real correlation here.
https://www.jpmorganchase.com/corporate/institute/document/jpmc-institute-gas-report.pdf
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