Examination of witnesses (Questions 360
- 379)
WEDNESDAY 1 JULY 1998
MR JOHN
BALLARD, MR
CHRIS BREARLEY
and MR DAVID
ROWLANDS
Chairman
360. You mean, they cheat?
(Mr Ballard) Those are your words, Madam Chairman.
I do not know whether any of my colleagues would like to add to
that, but there is a feeling there.
361. You want to shorten their careers as
well as your own. Yes, Mr Rowlands: fluid interpretations?
(Mr Rowlands) I think it is fair to say that continental
administrations, whether you call it fluid or more liberal, by
comparison with what has historically been the case in the UK,
though you need to be careful that the fluidity does not get out
of hand, the Italian State Railways were recently described as
a disaster of biblical proportions, such was the level of debt
they had incurred. Whatever the approach you adopt, there is a
need for sensible control of public expenditure, it cannot become
a free ride for raising money for this, that and the other, otherwise
you do end up
Chairman: The difference
is, probably, Mr Rowlands, when they are dealing with their executives,
they have other means than retiring them; yes.
Mr Pickles
362. What a charming thought, at this time
of the year. A number of people on various inquiries have said,
"Ah, well, it's all a bit different on the Continent, they
have different definitions"; so are you essentially saying
to us, well, that is not quite right, sometimes there may be a
little bit of liberal interpretation, but by and large what would
count as public expenditure in this country would count for the
same in France, or Germany, or Italy, or Spain?
(Mr Ballard) Yes, I am saying that. To go outside
the public expenditure field directly, you do find, when you examine
some of these propositions, they do turn out to be not quite as
straightforward as anticipated. It is always said that compensation
arrangements in France and Europe are much more generous than
they are in this country; if you only adopted them then our troubles
on the, whatever it is you are constructing, would disappear out
of the window. But, in fact, when you examine the way the compensation
arrangements are put together, the net benefit to the recipient
of the different streams of funding that they are entitled to
actually comes out very similar to what a person in this country
would get.
363. So, if you were facing the same problem,
of trying to have to fund NATS, or the equivalent of London Underground,
if it were in Paris, or if it were in Rome, you would be facing
the same kind of constraints with regard to definitions?
(Mr Ballard) Yes, you would.
Mr Donohoe
364. The Government have recently announced
their intention to partially privatise the National Air Traffic
Control Services, and there is a suggestion abroad that that money
raised will be used on the Roads budget. How much money does the
Government expect to raise from this privatisation?
(Mr Ballard) I think we are still at the stage
ofwe have not got to the stage of writing invitations,
and so on, in terms of to participate, we are at an early stage.
Obviously, the anticipated benefits from this are difficult to
put a price on, because if we do, at this stage, we are constraining
in some way the bidding process. How much actually will flow back
from this is obviously a factor that the Deputy Prime Minister
and the Chancellor will factor in to their forward spending plans.
365. But, surely, they are not going to
even make that announcement unless they have got some idea as
to what they are going to achieve; there must be a figure in your
Department, there must be?
(Mr Ballard) They clearly have a view as to what
they might
366. So what is their view?
(Mr Ballard) I think that is something for them
to disclose when they feel ready, but they are not, I think, at
the stage where they would wish to speculate on the amount that
would come through.
367. But it is the case that, if it were
to be raised and it were to be sold, the monies would be used
on the road-building and road maintenance programme?
(Mr Ballard) I think, at this stage, the Government
has not committed itself as to exactly how the funds would be
used, and I think we have to wait and see what comes through the
Comprehensive Spending Review.
368. So there is no indication within the
Department that the reason that they have gone ahead with this
announcement is on the basis that there was a promise made between
the Deputy Prime Minister and the Chancellor that the monies raised
in this partial privatisation would be used for the road-building
programme; you are saying that is not something that you are aware
of?
(Mr Ballard) I am saying, at this stage, that
I do not feel we can describe the exact arrangements which are
envisaged coming from this process.
369. If we were to, just for a second, look
at it on the basis that you were to raise something like £300
million, which is a figure that is talked of, what proportion
of that money would be used, if it were given to the Department,
for the maintaining of existing road networks, and what proportion
would be used for the building of new roads?
(Mr Ballard) I am sorry not to be able to respond
more positively. You are very skilfully trying to draw from me
some figure, but I do not think I can go any further than simply
saying the resources that will be available to the Department,
across all its programmes, including transport, are something
which will be resolved very shortly through the CSR process, and
I do not think that, in advance of that process, Ministers would
want to be committed to any particular allocation of any particular
part of the likely sums available.
370. But the difficulty, Mr Ballard, by
your answer, that I face is the fact that, given what we have
had is discussions elsewhere, there was a suggestion that this
was what the quid quo pro was all about. You are indicating
to me that it is possible, highly probable, that the Treasury
will not give your Department the necessary monies from the sale
of Air Traffic Control?
(Mr Ballard) No, I am not, I am not making any
comment on that at all. I am simply saying that what flows through
the Department in terms of its available resources for transport
and other programmes will be determined through the CSR process,
and no doubt in that overall scheme of things the benefits of
moving forward on that will be taken into account.
371. Can I just try in a different way then
to establish something. Can you give us, and this is just a general
point, what the latest estimated cost is for building one mile
of motorway?
(Mr Ballard) I think I would ask Mr Brearley for
that.
(Mr Brearley) It depends where it is, and so on;
it is about £10 million, would be a round number.
Chairman: For a mile?
Mr Donohoe
372. For one mile: £10 million per
mile of motorway?
(Mr Brearley) Roughly speaking.
373. Something about £8 million for
a dual-carriageway, and £7.3 million, is it not, for a trunk
road, something in that order?
(Mr Brearley) Orders of magnitude, yes. It does
depend where it is, conditions, and so on, yes.
374. Now if one takes that and looks at
what you are likely to achieve if it is the case of some £300
million, it is not giving an awful lot of road, is it, something
like 30 miles, if my basic arithmetic is right?
(Mr Brearley) Obviously, your arithmetic is right.
Chairman
375. That is a dangerous assumption, Mr
Brearley. Can I ask you something else then. Is this going to
be additional money, or is it going to be replacing existing money
in the Vote? We are not talking about anything sordid, like accurate
figures, but if you could just give us an indication, a flavour,
is this going to be additional or is it going to be replacement?
(Mr Ballard) We are in the happy position, or
otherwise, that, looking forward to 1999, 2000 onwards, all the
figures are up for review, so there is no absolute entitlement,
so there is not a base on which you can add it up and say it is
plus or minus.
376. Did they tell you that before you arrived,
Mr Ballard, or did you reach that agreement there? Frankly, you
see, where did this idea about NATS get abroad? Let me ask you
something simpler. Where did the idea get abroad, if not from
your Department, that there was going to be a degree of hypothecation
and that the result of the Chancellor's statement was, in effect,
a negotiation between him and the Deputy Prime Minister; who could
have started that particular hare running?
(Mr Ballard) One could only speculate.
377. Well, why do we not break the habit
of a lifetime and speculate on this?
(Mr Ballard) I think that might be, as you might
expect, a dangerous thing for me to do.
378. You have carte blanche, I assure
you?
(Mr Ballard) I am very grateful for that but I
think it is an invitation I must decline.
379. Mr Ballard, I am very serious about
this. There is no way that this Committee can assess the accuracy
of the sort of figures that are being put forward if we are told,
"No, we don't really have a reserve price, or if we do we're
not going to tell you what it is; we don't really know. Because
that will, in some way, limit the bids they're going to put in,
and we therefore can't give you that information. We don't know
whether it's additional or whether it's a replacement, and anyway
all the figures are going to be up in the air within a couple
of years' time. So, with the greatest respect, you're not going
to get very accurate information." How would you say this
Committee should therefore question you, tell me the question
I should ask which would elicit from you some information which
bore some faint resemblance to figures that we could use to assess
what is happening in your Department? How would you advise me?
(Mr Ballard) I think, the advice, which may not
actually be particularly welcome, would be that, I think, if one
can wait a relatively short period there may be a much firmer
basis upon which questions can then be asked. I think it is a
question of two or three weeks.
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