Mark Wadsworth

This is a spare 'blog in case my main 'blog at markwadsworth.blogspot.com isn't working

For whom the bridge tolls (2)

To try and round off yesterday’s debate, I just don’t understand how people can try and justify bridge tolls (whether privately or publicly owned) by saying things like this:

“Bridges tend to be fairly isolated (1), except in cities like London, because, I suppose, of the cost of building them. The point is, no-one is preventing anyone from building a bridge a hundred yards away, it’s not a state-protected monopoly. (2)

The fact that, in more than 200 years, no-one has thought it worthwhile to do so rather suggests that there is no economic point. (3) Bathampton Bridge is a private toll bridge with free competition not far downstream, but is still fairly busy, because using it means you don’t have to fight your way through the middle of Bath.” (4)

1) Bridges are clearly not isolated by Bayard’s own admisson (see his example of the Bathampton Bridge, 4).

2) In the instant case “A stretch of river bank [is] included in the price”, so the chances are you can’t.

3) That isn’t at all proven. The original bridge required an Act of Parliament; a new one would require lots of planning consents and would also required new stretches of road to be built to divert the traffic (which presumably the owner of the new one would have to pay for, which the owner of the old one doesn’t).

4) Clearly, it’s not quite in competition; we are comparing slow toll-free route with quicker toll route. What happens if the Bathampton Bridge were toll-free and the one in the middle of town is a toll-bridge?
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Let’s not confuse ‘cost’ and ‘value’. Clearly, if people want to travel from Hereford to Hey-on-Wye, they are happy to pay the 80p toll; and if they want to get from one side of Bath to another quickly, they are happy to pay a toll. This toll is a reflection of the value to the car driver of the time he saves by using that route rather than an alternative toll-free route. But what the heck does that have to do with the costs?

As a thought experiment, imagine that the Whitney-on-Wye bridge belonged to the local council (or The Highways Agency or whomever), as do all the other 23 miles of road between H and HOW except for one short stretch of a few hundred yards, where the owner of the land wangled his way out of a compulsory purchase order and privately owns that stretch, and let’s assume this is dry, solid land where building and maintaining the road is dirt cheap.

So, would car drivers be prepared to pay 80p to drive that short stretch of privatised road? Of course they would; the value to them of getting from H to HOW (or back again) along that route is exactly the same whichever stretch happens to be privately owned. We could divide up the 23 miles of road into a hundred short stretches and sell off each one to a private toll collector, if (let’s assume) the total value of being able to drive that route by car is (say) GBP 10, then each toll collector can charge each car driver 10p.

Furthermore, the local council is delivering customers to the bridge owner; it is maintaining all the other 23 miles of road free of charge (to the bridge owner), and all he has to do is collect his 80p monopoly rent.
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As far as I am aware, the government collects three times as much in VAT and duty on fuel as it spends on road maintenance, so financing roads is a doddle; or if you are a purist, if a particular roads or bridge is a good investment (and most but not all of them are) the cost can be funded out of LVT on the additional rental value of the sites which benefit; there is no need for LVT on roads themselves as VAT and duty on fuel is more-or-less LVT on roads anyway.

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