A Victoria line train. Photo: Wikicommons
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Lessons transit authorities shouldn't be learning from TfL

Like "fare hikes are a good thing". 

On Monday, the US website CityLab ran an interview with Shashi Verma, director of customer experience at Transport for London, under the headline “5 Lessons US Transit Systems Should Learn from London”. The gist of the piece was that running the transport system like a for-profit private company was the best best thing to happen to Londoners since Boris Bikes or sliced bread, and those in the US should be green with envy.

Tonight at 8pm, London Underground power workers from three different unions are due to stage an eight-day walkout in protest against working conditions and pensions plans. While this doesn’t necessarily contradict everything Verma said, it does at least highlight the downside of a (his words) “relentless push” to increase revenue and lower operating costs.

There are aspects of TfL’s £50m restructuring plan, announced last November, that impress: 24-hour weekend services and the possibility of unmanned trains are the biggies. But Verma’s attempt to portray the closure of ticket offices as a positive, rather than something that’s caused widespread protest from staff and passengers alike, is little more than spin.

What’s even odder is his success in re-framing constant inflation-busting fare rises as A Good Thing. The CityLab piece names “Make fare increases routine” as an apt lesson for US Transit authorities, explaining:

There are loud objections over there just as there are here, but the critical difference is that TfL has set an expectation in the minds of travellers, not to mention politicians, that fares must rise on an annual basis.”

Londoners may be rather less convinced that this is a lesson worth exporting. This graph pits consumer price inflation against the percentage year-on-year rise of the price of a single cash ticket (that is, those not paid for via the Oyster automated ticketing system) within zones 1-4. (We know most commuters don't pay cash fares, but due to the Oyster's short history they're the most easily comparable figures.) 

 

Two big rises – of a pound each, in 2007 and 2011 – account for most of the overall increase. If you stack those percentage rises on top of each other, the concession to a minimal, inflation-level rise for this year doesn’t look so impressive. The CityLab piece applauds London's gradual fare increases, as opposed to US Transit Authorities' tactic of holding off until fares take a big jump, but this graph shows that this isn't always the case. We’ve gone from £3 for a single in zones 1-4 in 2004 to £5.70 in 2014. And, last week, the National Union for Rail, Maritime and Transport Workers (RMT) claimed that fares will rise another 24 per cent by the end of the decade; that’s over a third faster than the expected rise in earnings.

Don’t get us wrong – some of TfL’s flashy improvements, such as those fancy screens on bus stops or contactless paymens, are great. And it would be handy to get the tube home after a messy night out in Camden.

But the story’s just a little bit more complicated than Shashi Verma would like to make out. Contrary to what he might like American transport bosses to think, Londoners are not exactly delighted with the tube, either. 

This is a preview of our new sister publication, CityMetric. We'll be launching its website soon - in the meantime, you can follow it on Twitter and Facebook.

Barbara Speed is comment editor at the i, and was technology and digital culture writer at the New Statesman, and a staff writer at CityMetric.

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What is the EU customs union and will Brexit make us leave?

International trade secretary Liam Fox's job makes more sense if we leave the customs union. 

Brexiteers and Remoaners alike have spent the winter months talking of leaving the "customs union", and how this should be weighed up against the benefits of controlling immigration. But what does it actually mean, and how is it different from the EU single market?

Imagine a medieval town, with a busy marketplace where traders are buying and selling wares. Now imagine that the town is also protected by a city wall, with guards ready to slap charges on any outside traders who want to come in. That's how the customs union works.  

In essence, a customs union is an agreement between countries not to impose tariffs on imports from within the club, and at the same time impose common tariffs on goods coming in from outsiders. In other words, the countries decide to trade collectively with each other, and bargain collectively with everyone else. 

The EU isn't the only customs union, or even the first in Europe. In the 19th century, German-speaking states organised the Zollverein, or German Customs Union, which in turn paved the way for the unification of Germany. Other customs unions today include the Eurasian Economic Union of central Asian states and Russia. The EU also has a customs union with Turkey.

What is special about the EU customs union is the level of co-operation, with member states sharing commercial policies, and the size. So how would leaving it affect the UK post-Brexit?

The EU customs union in practice

The EU, acting on behalf of the UK and other member states, has negotiated trade deals with countries around the world which take years to complete. The EU is still mired in talks to try to pull off the controversial Transatlantic Trade and Investment Partnership (TTIP) with the US, and a similar EU-Japan trade deal. These two deals alone would cover a third of all EU trade.

The point of these deals is to make it easier for the EU's exporters to sell abroad, keep imports relatively cheap and at the same time protect the member states' own businesses and consumers as much as possible. 

The rules of the customs union require member states to let the EU negotiate on their behalf, rather than trying to cut their own deals. In theory, if the UK walks away from the customs union, we walk away from all these trade deals, but we also get a chance to strike our own. 

What are the UK's options?

The UK could perhaps come to an agreement with the EU where it continues to remain inside the customs union. But some analysts believe that door has already shut. 

One of Theresa May’s first acts as Prime Minister was to appoint Liam Fox, the Brexiteer, as the secretary of state for international trade. Why would she appoint him, so the logic goes, if there were no international trade deals to talk about? And Fox can only do this if the UK is outside the customs union. 

(Conversely, former Lib Dem leader Nick Clegg argues May will realise the customs union is too valuable and Fox will be gone within two years).

Fox has himself said the UK should leave the customs union but later seemed to backtrack, saying it is "important to have continuity in trade".

If the UK does leave the customs union, it will have the freedom to negotiate, but will it fare better or worse than the EU bloc?

On the one hand, the UK, as a single voice, can make speedy decisions, whereas the EU has a lengthy consultative process (the Belgian region of Wallonia recently blocked the entire EU-Canada trade deal). Incoming US President Donald Trump has already said he will try to come to a deal quickly

On the other, the UK economy is far smaller, and trade negotiators may discover they have far less leverage acting alone. 

Unintended consequences

There is also the question of the UK’s membership of the World Trade Organisation, which is currently governed by its membership of the customs union. According to the Institute for Government: “Many countries will want to be clear about the UK’s membership of the WTO before they open negotiations.”

And then there is the question of policing trade outside of the customs union. For example, if it was significantly cheaper to import goods from China into Ireland, a customs union member, than Northern Ireland, a smuggling network might emerge.

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.