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Mr. Miller: Will the hon. Gentleman clarify which year he is talking about? According to the accounts, there is only one year in which total expenditure was £28 million, and that was 1999–2000. Expenditure in all the other years was substantially less.

Dr. Pugh: Anyone who pretends that there has been no substantial loss on the operating costs of the tunnel is not living in the real world. We could argue the figures indefinitely—the hon. Gentleman and I both have figures in front of us—but I genuinely believe that there was an operating loss that had an effect on services. However, even if the operating loss were only small, and not substantial, the fact remains that it has to be made up—elderly ladies in Speke, Crossens, Prescott and elsewhere have to play some part in making up the loss. In effect, such people are subsidising the haulier and the motorist.

Mr. Peter Kilfoyle (Liverpool, Walton): Does the hon. Gentleman agree that my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) might feel a little differently about the £28 million cumulative loss if he,

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and his local councillors in turn, had to explain where the transport precept was going? Does the hon. Gentleman agree that my hon. Friend does not have to face that reality, unlike MPs representing the five boroughs on Merseyside?

Dr. Pugh: It is not only MPs but councillors who every year have to deal with the Merseyside passenger transport authority precept and explain the basis on which it is calculated.

The fact is that there was a loss—it happened—and there is nothing in the system as currently defined that can stop it happening again. Regardless of the details, the facts and the figures, what we have is a system of deficit financing that is cumbersome, unpredictable and incapable of dealing with a range of perfectly likely scenarios. Any long-term safety issues or requirement to meet new standards cannot be dealt with under the existing funding system. Environmental problems affecting people living near the tunnels increase as traffic increases, but they are not addressed in any way by the current funding regimes. The present system contains no mechanism to deal with major structural problems that might give rise to an emergency in the tunnels. There is no mechanism to deal with any change in fiscal rules, VAT treatment or interest rates.

The system is absolutely inflexible, and it cannot guarantee that granny will not end up subsiding Eddie Stobart. I have nothing against Eddie Stobart—he is a very fine chap in his own way—but I see no reason why people who have no use for the tunnels should end up subsiding something that does not specifically concern them.

Any council leader on Merseyside knows the yearly agony of trying to fix the budget while waiting for input from the Merseyside passenger transport authority. The PTA can make a substantial difference to what the council has to tell council tax payers, and to the taxpayers themselves. A feature of the system that has been identified year after year is its sheer unpredictability, and the tunnels and the various associated charges contribute to that unpredictability.

Mr. Joe Benton (Bootle): To confirm the hon. Gentleman's comments, I well recall the many torturous hours spent in budget preparation in Sefton, and I have no doubt that other local authorities had the same experience. Does he agree that that experience of having to wait until the last minute before we could set a rate arose because it often depended on the Merseyside PTA levy? Does he agree that the Bill is motivated by the desire to modernise the system and overcome the arcane process that councillors on Merseyside still have to undergo?

Dr. Pugh: I certainly do agree, and I am grateful for that intervention. In fairness, I have to say that sometimes budget negotiations within Sefton council were torturous for reasons that were not related to the MPTA, but that is another matter.

It would be disingenuous, wrong, inaccurate and dishonest of supporters of the Bill to say that it is designed solely to establish a stable financial platform. If the Bill

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does that, that is in itself sufficient reason to support it, but I think it is designed to do other things, and it is fair to identify what they are.

Stephen Hesford: Perhaps, like me, the hon. Gentleman has had the opportunity to examine the Mersey Tunnels Bill briefing update produced by the Promoter of the Bill, Merseytravel. In no year since 1992–93 has there been an operating loss. The hon. Gentleman talked about stable financing, which is precisely what we have as a result of the increased tunnel toll in April 1992 and a further rise in November 1999. He is talking about history, which is not relevant to the position today.

Dr. Pugh: The hon. Gentleman is slightly missing the point—he is a bit like someone who tries to persuade me not to take an umbrella tomorrow because it did not rain this afternoon. There is nothing in the present system to inhibit or prevent a loss, but the Bill includes a provision that leads one to believe that a loss is far less likely. As a loss is undesirable in principle, I support that provision.

The Bill allows the people running the tunnels to create an operating surplus—I am not against that.

Mr. George Howarth: Does the hon. Gentleman agree that the Bill seeks to acquire for people the power to increase tolls in line with inflation if necessary? His point is perfectly valid: if there is no need for an increase, the tolls will not necessarily go up; but if a rise is required, there is the power to increase the tolls appropriately.

Dr. Pugh: The Bill provides the people running the tunnels with a tool to prevent a loss, should one be on the horizon. I do not think that anyone in the Chamber would seriously claim that such an enterprise as the one operating the Mersey tunnels should never have an operating surplus in principle. Lots of tunnels across the world have a surplus, as do many traffic management schemes.

Mr. Wareing: I am much obliged for the graciousness with which the hon. Gentleman gave way. Did he see in the Merseytravel briefing that there will be a surplus on the Mersey tunnel tolls by 2005, which could be hypothecated and used for other purposes? Is not that why the Freight Transport Association and the Automobile Association oppose the Bill?

Dr. Pugh: I shall not explore the reasons why the AA opposes the Bill but, as the hon. Member for Crosby (Mrs. Curtis-Thomas) made clear, if there is an operating surplus, it will be needed by the operators to meet considerable demands to comply with European safety requirements. I went through the tunnel as a child so it must, by definition, be fairly old and in need of substantial refurbishment. We need a system that enables us to tackle that. A key feature of the Bill is that it creates the possibility of integration with the local transport plan; it brings the tunnels into the frame so that we can achieve a coherent and sensible local transport plan. There is not a political party on the planet that does not support local transport plans that propose an integrated transport system. Rejecting the possibility of such a system is crass stupidity and against the spirit of the Government's own 10-year plan. It is simply not possible to have integrated transport nationally, but not locally.

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It is only sensible that a transport body should have the power and tools to secure economic prosperity, social inclusion and a wholesome environment. The body that we charge with the task of executing an integrated transport plan for Merseyside is the MPTA. What is there to fear? I do not understand the force of the objections to the Bill. The MPTA is a democratically elected body of people who have been nominated by their own councils because they know something about transport and have a grasp of the issues. The MPTA is not the haunt of slavering Trots, and it is not a bunch of misguided anoraks. I dare say its members have their faults. I know many of them personally, including Councillor Dowd who will acknowledge that he is by no means perfect in every respect. None the less, he is recognised for his vision, abilities and skill in determining what is needed on Merseyside, and has been nominated as transport personality of the year.

Stephen Hesford: It is a pleasure to intervene in this debate. Is the hon. Gentleman talking about the same Councillor Dowd who was chair of the authority which sponsored the previous Bill, which would have privatised the management of the tunnels? Is that the same perspicacious person?

Dr. Pugh: I understand the hon. Gentleman's confusion, as there are two well-known Councillor Dowds on Merseyside. However, it is the same Councillor Dowd.

The MPTA, the Minister will concur, has received tangible praise from the Government for its vision, and for its ability to understand what might be required in a transport plan for Merseyside. It submitted a transport plan which was so good that the Government, most peculiarly, asked whether it wanted more money. It was given more money as it was thought to be able to spend it properly.

The people sponsoring the Bill therefore have an acute idea of Merseyside's transport needs. Where is the danger in giving them a power that they need? Why the animus against some of the benefits that may flow from the Bill? The MPTA predicts that there will be £2.5 million of additional revenue. That figure may vary, and may be a little less, but even if it were only £1 million, that would make an appreciable difference to people on Merseyside, who could have better bus networks and stations; various environmental improvements to soften the effects of transport congestion at the tunnels; and park-and-ride schemes. They could have a range of things once money is available from the transport plan. At the moment, however, there is no guarantee that there will be any further income coming their way.

To conclude, the Bill solves the long-standing problem of unpredictable finances. Even its opponents must accept that it offers potential benefits. It is thoroughly in line with integrated transport and modern thinking. Importantly, it is subject to appropriate safeguards. If I am wrong, and if the MPTA ends up as the haunt of slavering Trots or anoraks, the only way it can damage the motorists of Merseyside is to go to the Minister and ask whether it can do so, as ultimately he has control over whether it can raise charges above the retail prices index. I hope that all Labour Members would trust the Minister to make a sensible and reasonable decision in that respect.

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They should be assured by the fact that he is nodding and agreeing that the safeguard will be in place when the legislation goes through.

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