Leading article: The meaning of Manchester's No

On the face of it, it looked like an irresistible offer. Manchester was told it could have £3bn to extend its tram network in a major public transport improvement that would create 10,000 new jobs. In return, all the city had to do was agree to a congestion charge which would affect only one in 10 of Greater Manchester's motorists.

But Mancunians yesterday delivered a massive rebuff to the scheme, with 78 per cent of voters saying no in a region-wide referendum which had a turnout as high as a general election. Government plans to roll out hi-tech road pricing in Britain's major cities are in disarray.

It is worth asking why Manchester voted no, when 90 per cent of motorists would not have to pay. That statistic takes us to the heart of the issue: it came from the Yes campaign; the No camp, in contrast, said that one in three motorists would pay, with two-thirds of households affected. One of the most noticeable characteristics of the fierce Yes and No campaigns was their inability to agree on the facts of the case – they even disagreed about whether the city was really congested, and whether traffic flows were rising or falling.

Talk of new jobs was balanced by fears that existing jobs would be lost, or that employees would switch jobs to avoid paying the annual £1,200 tax, which amounts to 8 per cent of the average local take-home pay. One side said that the scheme would pay for itself, the other that the cost of the £1.2bn loan that was part of the £3bn package might eventually fall on council-tax payers. The Yes campaign accused its opponents of spreading disinformation; the No lobby said the other side was using public money to bombard the city with propaganda.

In part, the defeat was about a breakdown in political trust. Local politicians promised that the charge would not be introduced until 2013, by which time 80 per cent of the public transport improvements would have been completed, but most voters appear not to have believed them. It is perhaps revealing that turnout was particularly high in Bury and Trafford, the two areas served by the tram network where complaints are common that the existing service is poorly run. The announcement by the transport secretary, Geoff Hoon, just before the vote, that if Manchester voted no it would not get a penny, was widely seen in the city as bullying.

But details in the plan also worked against the Yes campaign. For all the talk about it being a green tax there was no gradation: eco-friendly hybrid cars would pay the same as gas-guzzling SUVs. There was no attempt to regulate the routes and fares of the city's 19,000 buses which would have been an easy and cheap congestion-buster. The proposal focused on transport in and out of the city centre when the bulk of jobs in the area are outside the centre and involve cross-city commuting. It did not consider the option of taxing parking spaces in the city.

It was an ill-thought-out scheme yet, despite that, the adjustments made to the plans after a public consultation were peripheral. It was a take-it-or-leave-it proposal. And the people of Manchester have left it. Every other local authority in the land will take note.