In the last couple of days we have had two stories running regarding the effect of parking charges on high street shopping
The first came from Cardigan, Wales, where all the town’s parking meters were smashed by vandals last month. A local retailer Keith Davies who has been a long time campaigner against parking charges claims trade has gone up by 20-50%
He doesn’t say what this is compared to, Cardigan is a seaside town and business is expected to increase significantly in the summer months anyway.
Another business owner
Jane Roche, a cafe owner, said shoppers were taking advantage of the free parking to stay longer.
“The town is much busier, with customers saying that it is really nice not to have to rush back to their cars,”
Though of course the only people she is speaking to are those who have managed to find a parking space, not those who have given up and gone to another town for lunch.
Within hours the government ministers were espousing knee-jerk reactions as they are prone to do to popular but factless newspaper articles.
Marcus Jones, Minister for High Streets (WTF?)
‘Those areas [without parking meters] seem to be doing better and I think it’s really important that councils understand that and develop their policies to make sure that they are attracting people to come and shop and frequent the high street.
Unfair parking fines push up the cost of living and undermine high streets. Instead councils should be focusing their efforts on supporting our town centres and motorists, not by raising money through over-zealous enforcement.’
No evidence required of course, but it’s always nice to get a few popular words in the Daily Mail. He’s not even saying he can do anything about the matter, it’s up to the local councils.
All this of course flies in the face of some fairly basic economic theory, that of scarce resources. The basic point to be made on scarce resources is that when there is not enough of something to fulfill the needs of those who wish to obtain it, then we use a pricing mechanism to ensure we get the maximum economic benefit for those resources.
With regard to parking there are two factors to consider when imposing charges. You want to keep the spaces as full as possible while still making it reasonably easy for newcomers to find an empty space, this is the occupancy rate and I have seen estimates that the most efficient rate is in the region of 75-85%. The next thing you want to do is to make sure that the people coming to the town are going to spend money, though this is largely a subset of occupancy.
Occupancy rates of 100% imply that the charging is too low or even free. 100% occupancy sounds good on paper, but in reality it will mean that a lot of customers can’t find parking spaces and many of those spaces will be taken up by people bringing little or no economic benefit to the town, a shop assistant or the owner of a local butchers parking from 8am to 6pm for free, for example.
If you charge £5 to park, people are unlikely to visit your town to buy a newspaper, but they might visit it to buy a washing machine as the parking charge is proportionally lower. Of course people buy washing machines far less frequently than newspapers so you need to find an optimal price point, and this is where the occupancy rate helps. Provided that the occupancy rate of Cardigan was around that 75-85% target during shop opening hours then we can rest assured that the parking charges are bringing the most economic benefit to the town, by ensuring a good turnover of spaces to people who have money to spend.
I would be surprised if a self appointed parking charges campaigner was not aware of these facts so it would be interesting to know what the occupancy rate for Cardigan’s town centre car parks is. It may be that the charges are too high, or that they need to amend their scale of fees for different times of day to encourage a good occupancy rate throughout the day and across the year. If the figures show an occupancy rate below 75% even with free parking, then it might be argued that parking spaces aren’t scarce and so no charging is required, but this would be highly unlikely. Just street-viewing Cardigan shows that it is a busy town with limited space for parking and so a charging mechanism is required to stop the owners of butchers shops bay-blocking all day for free.
The fact nobody has presented any evidence about parking or economics of Cardigan should not of course be taken as a reason why a government Minister can’t make pointless statements about parking.