Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence

Examination of witnesses (Questions 360 - 379)




  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 of—we 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.


  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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