The drifting economics of British winter

A bit of snow, goes the familiar refrain, and the country grinds to a halt. It’s not like this in Moscow or Chicago where they have snow ploughs and proper contingency plans.

We British love a good moan, but how much economic sense would it make to invest in fleets of snow-clearing equipment? When days of serious snow hit London last year the mayor, Boris Johnson, said it did not necessarily make sense to make a major investment in snow-ploughs if they were only used once every two decades. Though the capital is still relatively snow-lite at present, the mayor’s notion of once-every-two-decades is looking a little unrealistic. With global warming we can expect ‘freak’ weather to become more normal. But when does the cost-benefit analysis show that a major shift in thinking is required?

The major argument is always that snow hits the overall economy. If 10 per cent of the nation’s 30 million workforce is snowed in that costs Britain £600m a day. Not only is direct output lost but they don’t buy coffee, sandwiches and newspapers on their way to work.

But that is only true up to a point. Money not spent today doesn’t disappear like snow when the thaw comes. Some of the work we can’t do today we simply do tomorrow. And the things we can’t buy today often get bought later in the month.  Likewise though there are fixed costs in snow-clearing – more ploughs, gritters and salt – some of the extra cost incurred, in wages for example, is returned to the economy in taxes and spending. And very cold weather boosts the profits of power companies.

Moreover, increasing numbers of people can work remotely or do deals online.  Nor are the costs constant. Employers’ organisations will testify that the first day of snow is always the worst. After that people find that people do find ways to get back into work, though there can be longer-term problems with childcare when schools stay shut.

Having said that, councils who have sought to make public spending cuts by decreasing the stocks of salt and grit they hold – relying on just-in-time deliveries for replenishment – are indulging in a fool’s economising. That is where the rethinking needs to be done. But we do not yet need to start do the sums on snow-ploughs.

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