Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witness (Questions 1-19)



  Chairman: Good afternoon. Before the Committee begins its session, there are one or two housekeeping matters. Will members of the Committee who have interests to declare please make them public.

Mr Stevenson: I am a member of the Transport & General Workers Union.

  Miss Jackson: I am a member of the Transport & General Workers Union.

  Chairman: Gwyneth Dunwoody, member of the Rail Maritime and Transport Union.

  Mr Donohoe: Brian Donohoe, member of the Transport & General Workers Union.

  Miss Ellman: Louise Ellman, member of the Transport & General Workers Union.

  Miss McIntosh: Anne McIntosh, I have a declared interest: I am on the register of the RAC; my husband works for an American airline; I have minor shareholdings in BA, BAA, Railtrack and Eurotunnel.



  1. Thank you very much for coming to see us. Would you be kind enough to identify yourself officially and then we can take a record.

  (Mr Rees) My name is Hugh Rees. I am Head of the Sectoral Economics Unit in the Energy and Transport Directorate of the Commission.

  2. Did you wish to open the batting with a few remarks of your own?
  (Mr Rees) I can do, if you wish. I hope that you have received what I might call the glossy version of the White Paper, plus a statistical publication, which I thought you might find of interest.

  3. It has only just arrived. We have the White Paper.
  (Mr Rees) If I may, I will give a word of explanation. This is called a White Paper but I think it is rather a white-green paper in the sense that we have deliberately attempted in the paper to provide something readable for the general public. It is not the usual rather academic style that the Commission sometimes adopts in White Papers. We are attempting here to stimulate a debate on the transport situation in the Community, particularly in the period since the last White Paper, which dated from 1992. The last White Paper, as you will recall, was written at the time of the development of the Single Market. This White Paper aimed very much to create a single market in the sector of transport. That meant that the paper was directed very much at what we term opening markets - liberalisation, removing of rules and rather arcane restrictions that limited the efficiency of the transport sector. Looking back over the last ten years, I think we can say that this has been a success. It has been a success in the sense that the transport sector has grown; more services have come on offer; there has been a better development of services, particularly, for instance, in civil aviation, and, as a result of this, there is more transport now than there was ten years ago for passenger and freight. But the success is limited by the fact that we can see quite a number of problems arising generally throughout Europe now in the transport sector. First, we have the problem of congestion, which is affecting all modes of transport, particularly the road mode in urban areas and airports. Railways are also suffering problems and there are also problems in some of the major ports of the Community. So we have this problem of congestion. The second problem we have is the environment, where we have emissions which particularly affect urban areas. We also have the greenhouse gas problem where, in terms of greenhouse gas, today around 30 per cent, about one-third, of the greenhouse gas emitted in the Community comes from the transport sector, and over 80 per cent of this comes from the road sector. So we have this problem, which makes it very difficult to meet the Kyoto Accord. We have the problem of safety. I have the latest figures but the published figures are of around 40,000 people killed on the roads and we also have the problem of energy dependency, where 98/99 per cent of the energy requirements come from a single source of energy - oil. So we have all these problems and I think they have arisen from two facts: first, the problem that the investment on the supply side of the transport industry for transport infrastructure investment has gone down in real terms. Around the beginning of the 1980s, on average the Member States were putting about 2 per cent of their GDP into transport infrastructure investment. Today, from the latest figures we have, it is about 1 per cent. We have this increase in the demand for transport but we have not had a parallel increase on the supply side for transport infrastructure. The inevitable consequences are congestion and other problems. For the future, and looking to the period 2010, with all the caveats that you have to attach to long-term forecasts, we do not see really any signs of a change. The demand for transport is continuing to increase and, with the enlargement of the Community, it is likely that there will be a continued push on the demand side for transport. Our forecasts are that for freight transport we could have up to a 40 per cent increase in the period up to 2010 in the Community as a whole. For passenger transport it is somewhat less, more like 20 or 25 per cent because the Community is getting older and congestion is affecting the urban centres in such a way that there is very little opportunity for more trips to be made. What can be done? I am afraid we have not come up with the magic solution. There is not a magic solution. The only solution is to look at the long term. What we aim to do in the White Paper is to provide a way forward, which we hope around the year 2010 would have stopped the situation getting any worse. This does not sound very optimistic. We are hoping to stop the situation getting any worse and to allow the man and lady in the street to see that existing politics is working to avoid a pressure building up perhaps for rather more draconian solutions to transport problems. So we are putting forward a package of measures using regulatory means, which are standard - more efficient pricing and taxation, research and best practice - to try to avoid the situation getting any worse by 2010. The calculations that we have made indicate that if most of the measures are put into force we will actually have stopped the increase in greenhouse gases and the other emissions, Nox, et cetera; sulphur will have come down considerably by 2010. We think there is an opportunity now but the choices are difficult, hence the title of the paper "A time to decide". The choices are difficult; we have the opportunity to make these choices. If the Community can succeed in putting in place the policies and parallel policies are put in place at the national level, then I think there is an opportunity to create a sustainable transport system by 2010. With the very interesting research work that is currently going on into hydrogen, the use of new systems to control transport, plus the fact that we should have better planning to involve transport much more closely with urban and land use planning, et cetera, all these things can come into place after 2010. After 2010, I think we will really see a sustainable transport system being built. What we are doing here is to put forward a policy which we believe to be realistic and, if it is put in place, we think it will stop the transport situation getting any worse; it should get somewhat better. It will not be a solution but it will give us the opportunity to put in place the real solution in the period up to 2010.

  4. That is very helpful but, before I begin the questioning, I want to ask you one or two technical things. Exactly what is the status of a White Paper with green edges? Are you saying that it is a discussion document, that you would expect all of the Member States to discuss the implications of this, which are very far-reaching, because, after all, it does have a great many implications? I hope we are going to go through some of the points you have raised this afternoon. Can I just be clear in my own mind what the status of this document is. Is it something that will be put to the Member States or is it something that you would regard as being your advice, your parameters that you would put to Ministers in the Council of Ministers? What is the status of this document we have in front of us?
  (Mr Rees) I am sorry that possibly I was less than clear. I was trying to think what would be the combination of white and green and I could not remember.

  5. Usually trouble, Mr Rees!
  (Mr Rees) I am afraid so, but we hope that this is not trouble. What we are doing is to spell out our view of the problems that exist today.

  6. And "we" in this case is the Commission?
  (Mr Rees) Yes.

  7. And "we" in this case have been asked to produce the White Paper for general discussion?
  (Mr Rees) We were not asked to produce a White Paper.

  8. So "we", being the Commission, have initiated this as a policy document, which will be generally discussed before it is agreed at any level?
  (Mr Rees) It does not necessarily have to be agreed.

  9. So it is parameters; we can take it these are the general parameters, the way that you see forward for the present time?
  (Mr Rees) Yes.

  10. What is the estimated cost to the United Kingdom of implementing all the White Paper proposals?
  (Mr Rees) We do not know. We are not in a position to cost all the proposals of this nature. We would like to be able to do that ideally in terms of policy making. It would be perfect to be able to say that we have a cost benefit analysis for all the policies, and we then obviously would want to choose the policy that gives the best cost-benefit ratio, but so many of the things here are unknown that we have to make a judgment with the best information we have available. We have not got a comprehensive set of information that would enable us to tell you exactly what these policies would cost.

  11. And yet many of these recommendations in the White Paper are written in very specific terms. They vary from some of them being extraordinarily general to some extraordinarily detailed. What financial systems would be available from the European Union?
  (Mr Rees) If you were talking particularly about transport infrastructure and the Trans-European networks, there we have a fairly clear idea about what the projects will cost because they are all projects that have been developed by the national authorities that are responsible for them.

  12. There are also existing systems and although you talk, for example, about Trans-European networks and how they should be dealt with in the future, what I am asking you is: is there a specific type of set-aside within the European budget that is meant not for existing systems but for support of the changes that are envisaged in this policy document?
  (Mr Rees) You have the existing lines for support for infrastructure. In the context of this particular paper, in relation to the development of multi-modal policies, we will be proposing before the end of this month a new line which we call Marco Polo, which is specifically designed to support the development of multi-modal services, services involving more than one mode of transport. The proposal is currently under discussion within the Commission services. We hope it will be approved by the Commission by the end of this month, and then we will be going to the Council and the Parliament next month.

  13. What consideration have you given to the impact of the ten-year plan for transport on your proposals in the White Paper?
  (Mr Rees) The ten-year plan for transport in the UK seems to start from much the same premise from which we started with the analysis of the Community as a whole, in the sense that there is a problem with the increasing demand for transport and there is also a problem that the public sector resources are not available to provide the steel and concrete solutions to this. So you have to look for a complex mixture of policies, and the ten-year plan in the UK seems to me - and I am speaking for myself rather than the Commission - to be a good example of how to tackle, in the case of one Member State, the UK, the sorts of problems that are affecting the Community as a whole.

  14. Have you got a timetable for your own proposals?
  (Mr Rees) Yes; we would like to see the measures adopted before the end of the decade.

  15. Let us be quite clear about which decade we are talking about. Are you saying 2010 or 2020?
  (Mr Rees) 2010.

Mr Grayling

  16. May I ask you about the railways and the issues of interoperability? There is a considerable amount of paperwork sitting on the Directive table in Brussels about interoperability but we have the enormous challenge that this country operates to an entirely different gauge to continental traffic. Can you start by addressing the question of what assessment the Commission has made about the cost and the logistics of requiring Britain fully to meet interoperability standards?
  (Mr Rees) Perhaps, in reply to Mr Grayling, I should say that this morning the Commission approved a new package of railway measures, which is the second package. One of the specific proposals that the Commission approved this morning concerns interoperability, both for the high-speed network and the conventional network. It may be useful, if you would allow me, just to clarify that when we are talking about interoperability, basically we are talking about the interoperability of new systems and we are not supposing that the UK would convert from the kinetic envelope, which is the technical term.


  17. That is fine as long as you are not suddenly going to come up with a timetable that says a new system must be in operation by the end of the decade. I am sorry, Mr Grayling, but the Committee is at a bit of a disadvantage because we do not know what the wording is. Does it say on this new programme on interoperability that this must apply to new systems and does it define what it means by new systems because, frankly, if you are going to require changes in gauge and changes in practically the whole of the railway system of the United Kingdom, then I think we would expect you not only to provide the cash but also to have a very clear idea of what you are talking about. It may be rather bigger than even the Community's budget.
  (Mr Rees) It certainly would be. There is no such proposal and there never will be because clearly it would be quite out of court in terms of any sensible economics.

Mr Grayling

  18. Can I press you? You say it never will be but can I ask you to think of a hypothetical. There are two or three principal routes to the Republic of Ireland: the route that goes via Holyhead; and two routes that go southerly in that direction through Wales. Those routes clearly tie in through the British network to the Channel Tunnel to provide proper interoperability of services all the way across the UK to a point where they are close to Ireland. So effectively the Irish can hop on a ferry, whether with freight or with passengers, and then benefit from a through-service right the way through into continental Europe. That could require the upgrading to continental gauges of a very substantial part of the British network. Are you actually saying that is never likely to be a requirement the Commission would make?
  (Mr Rees) I cannot commit the Commission for ever and a day. I would only say that I would be astonished, on the basis that the 1996 Directive required projects to be subject to a cost-benefit analysis. If you are talking about the routes to Fishguard Harbour and to Holyhead —


  19. They would not say no to a dual carriageway all the way round. If you wanted to give them large amounts of money other than for the route to Holyhead, you would be very popular.
  (Mr Rees) The Community has provided in the past substantial support for both of those routes actually but in this particular case for the railways, let us think of what the reality is. To Fishguard Harbour we probably have two trains a day; we have the same to Holyhead, with maybe three in the summer. To justify substantial work on the north Wales coast mainline, even to electrify it, apparently does not meet the Treasury requirements in the UK, as I understand it.

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