Tuesday, 19 September 2017

Merely eliminating the negative

The Secretary of State for Wales told us at the weekend that cutting just over a pound off the cost of crossing the Severn bridges will ‘power [a] new business boom with Bristol’.  It’s probably just as well that he made no attempt to explain how the one thing leads to the other, although it would be interesting to have seen him try.  It’s simply not credible that such a small change – or even the larger change which is in the pipeline when the tolls are abolished – will have as large an effect as he claims.
It’s certainly true that the tolls have, from the outset, been a disincentive to companies basing themselves in Wales.  It may not be a huge extra cost, but small costs repeated many times can become large sums, and it’s easy to see how that becomes a factor in deciding on location.  But the absence of a negative isn’t the same as the presence of a positive, as my old maths teacher would have said, and the removal of a disincentive doesn’t magically create an incentive.  The idea that a reduction in tolls – or even their abolition – can suddenly create new economic growth is fanciful at best.  During the years that the tolls have been in place, companies have already taken their decisions on location, and they aren’t suddenly going to change those because of this change; creating a more level playing field for future decisions isn’t the same as tilting it in our direction in respect of past decisions.
But when the promised land predicted by prophet Cairns fails to arrive, it will no doubt all be the fault of the Labour administration in Cardiff.  He seems to think that he’s done his bit now.

1 comment:

Anonymous said...

The severn bridge tolls are very much a conundrum. High tolls means greater cost of travelling to Wales [or going out and coming back].

Low or no fees benefits the Bristol region. Almost the entire region will benefit whilst south wales will drain to that region. The costs of living and commuting for an employee/worker going to or working or living in Bristol at the moment suddenly evaporates - cheaper housing [house prices considerably lower than Bristol - even in Gwent/Monmouthshire, higher salary [less any car/petrol costs] than in wales [private sector anyway]. Employer - no need to have a factory/warehouse etc in S.Wales, cost of transport suddenly drops or evaporates and with M4 improvements its a win win. Gradually left with no actual local jobs but people working away in the Bristol region?

The economic benefits and costs are not yet properly researched. Sometimes the improvements to the wales economy and infrastructure leech over to Bristol more than expected.