The Greater Manchester referendum on improving public transport and congestion charging is important to local politics for a number of reasons. For the benefit of readers who have not been following this, voters of Greater Manchester voted by four to one to reject the proposal last week. First, the result shows the folly of having a referendum on an issue which can be widely construed as a tax on ordinary people, especially at a time of economic recession. Following publication of the Lyons review into local government finance there was an interesting debate about whether councils should have the power to organise referendums for new capital expenditure on schools and other infrastructure. The Manchester vote shows that the public are highly unlikely to back such initiatives. It is important to remember that the only successful attempt to introduce a congestion charge in a major European city was introduced without a referendum and received voter endorsement in the subsequent London-wide elections, two years later. Second, it shows the power of the motoring lobby, and not just in this country. In March this year, the New York State Government rejected a congestion charge for Manhattan. Many drivers have an almost emotional attachment to their cars. Any proposal to improve public transport which relies on road pricing as a pre-condition will face a high hurdle to jump in the next few years. But, as Sir Richard Leese, the capable leader of Manchester City Council, pointed out, the issue of poor public transport and increasing congestion in Greater Manchester remains after the vote, and local councils in the sub-region have to find a way forward. Politically, the Government has to respond. Politics is always the art of the possible, and it needs imagination and courage to devise an appropriate ‘plan B' before the next election.