Examination of Witness (Questions 60-79)
MR JOHN
HUGH REES
WEDNESDAY 23 JANUARY 2002
Mr Donohoe
60. You said earlier that you would not want
me to fly from Glasgow to the Mediterranean.
(Mr Rees) Sorry; I did not say that. I said I would
not expect you to go by train from Glasgow to the Mediterranean.
Mr Donohoe: I certainly would not be doing that
in the present climate, would I? Can I just go back to the point
in terms of the White Paper itself. We rather missed the answer
in that it does seem very cantilevered, if you read the White
Paper, towards railways against air transport in particular. For
those in the regions that are further away and have not got an
infrastructure on the railways, that demonstrates that they will
always have the problems that they do have in the region. This
document looks very much as though it is written for the railways
and it is written for central Europe and not for the regions.
Chairman
61. I am sure he has got the point now.
(Mr Rees) Yes, I have got the point. My interpretation
is rather different from Mr Donohoe's. I would have thought that
if we can transfer more passengers in the centre of Europe, as
Mr Donohoe says, to rail services and offer them an equal, if
not better, service by rail, they will then free up space over
the congested airways of central Europe for passengers from Scotland
who are flying to the Mediterranean, if I can continue to use
that example. So this sort of policy recognises the need of peripheral
areas to have improved services, and offers them this possibility
by diverting people, where there is an alternative between air
and rail, to use the railways.
Mr Donohoe: A final point: you say on page 29
that companies cannot count - rail companies that is - yet the
document itself does not have a page 28.
Chairman: We will not expect you to answer that.
Mr Grayling
62. On this point, whilst I understand the logic
of the strategy you are outlining, it seems to omit the fact that
there is an extremely rapid growth, not simply in this country,
in low-cost airlines. There is a great battle taking place between
RyanAir and Lufthansa in Germany, for example. Have you factored
in the potential impact of low-cost airlines in setting out your
plans?
(Mr Rees) Yes, we have tried to do that because we
have assumed in the forecasting models that are employed that
there will be some reduction in the real cost of movement, and
hence we have this increase in the base line of our forecasts
of 90 per cent, nearly 100 per cent, in the period at which we
are looking. This comes partly because of a natural increase in
the demand for air transport and partly because air transport
becomes cheaper. What we are trying to do is to reconcile that
increase with the environmental problems. We are hoping that by
a series of measures that we have put here, we can find ways to
limit this increase to between 60 and 70 per cent, which is still
a lot. It is far higher than any other mode of transport.
Chairman: You have just said that the Community
is not going to issue any Directive on the environmental side
of it, and presumably is not going to pay either.
Mr Stevenson
63. There was a section on road safety in the
White Paper. There were two or three very important references,
particularly to the enormous amount of people killed and injured
on European Union roads. You talk about harmonising signs and
signals on the trans-European network. What does the trans-European
network mean in relation to that objective?
(Mr Rees) The trans-European network was agreed by
the Council of Ministers in the Parliament back in 1996. The White
Paper does have some indications, I think it is for the railways,
of what the trans-European network means. Effectively, it is a
network of the major roads and railways in the Community carrying
long-distance international business. We would really like to
see a movement towards a harmonisation of signs in general but,
as we have got this trans-European network, which is given a special
status by the decision of 1996, we propose that we start with
this network and hopefully, if this can be proven to be justified,
then extend it to the rest of the network. In this way, we hope
this would contribute the very ambitious target we put into the
White Paper of cutting the number of people killed on the roads
in the Community by 50 per cent over the period covered up to
2010.
64. The main thrust of the White Paper in this
regard is giving priority to exchanges in practice, but the White
paper is then rather sceptical about the success of that policy
in that the Commission reserves the right to propose legislation
if there is no drop in the number of accidents. You make reference
in the White Paper to the candidate countries. The White Paper
then goes on to talk about three measures: checks and penalties;
speeding and drink driving; and the harmonisation of signs at
dangerous black spots. Are those three areas the limit of your
ambitions in terms of possible legislation in the future?
(Mr Rees) Ideally we would not wish to legislate if
the Member States can be seen to be moving in the right direction,
but here perhaps I should point out, if you look at the little
book of statistics, that in 1999 there were about 3,500 who lost
their lives in the UK on the roads (page 182 in table 3.61); in
France with roughly the same number of population, about 59 million,
there were about 8,400. We are looking at a difference of over
double for the same sort of population. We interpreted that as
implying that if we could learn from each other in the Member
States, if we could use best practice, it should be possible to
have a considerable reduction in the number of people killed without
legislation. We reserved the possibility in terms of acting in
locum parentis for tourists, for international drivers,
to say that the Community, particularly as the Community now has
certain powers in relation to road safety, if there is no improvement
visible by 2005/2006, should think of the possibility of legislation
to try to move towards common legislation, but we do not want
to do that. If the best practice exchange of good ideas can bring
figures down everywhere to the level of the UK or Sweden, which
is even better, fine, then the Community will not need to act,
but if this does not happen, then I think we should at least think
of the possibility of doing something in terms of legislation,
technical standards, et cetera.
65. Could I ask a question about the railways?
The White Paper refers to railway safety requiring Member States
to establish wholly independent national bodies to be responsible
for investing in accidents. The Commission would want to establish
a Community-wide body to ensure co-operation between Member States
possibly as part of a future Railway Safety Authority. Who would
that future Railway Safety Authority be responsible to, if it
was set up?
(Mr Rees) Actually, this is one of the proposals that
the Commission approved today, the creation of a Railway Safety
Agency.
Chairman
66. Can I ask you this, before you go any further:
this is a package proposed by the Commission and what status does
that have?
(Mr Rees) This has a normal status.
67. So is it the basis of a Directive or a Regulation?
(Mr Rees) This is a Directive.
68. This is a Directive which has been approved
by the Commission. Has it been through the European Parliament?
(Mr Rees) No, it was only approved by the Commission
this morning and it will be sent to the European Parliament and
the Council of Ministers I guess in the next two or three weeks
when the translations are finished, and then it will probably
be subject to the usual debate. The idea behind the Directive
to create this agency - and agencies exist in quite a number of
fields, as you know - is to try to bring together best practice
in the railways in relation to safety, which would then provide
a basis of technical expertise for the Member States and the Community
in relation to new actions relating to railway safety. This would
be the body that would be working with the national agencies in
railways and organising discussions, exchange of best practice,
et cetera. It would not have any legislative powers; it would
purely be advisory and technical to try to see why there are differences
in the occurrence of certain accidents in Member States and whether
there is anything we can learn from that and ensure that there
is a proper dissemination of information.
Mr Stevenson
69. I am still not sure why the Commission feels
it needs a European Union body actually to do what you have described,
Mr Rees. After all, it is described in our advice - and I think
you confirm this - as a European Union Rail Safety Authority.
Is that the correct terminology?
(Mr Rees) It is an authority or an agency, depending
how you translate it.
Chairman
70. Agencies have control, do they not?
(Mr Rees) Yes, there will be a controlling body. The
controlling body, if it follows the practice of other similar
bodies, such as the Environmental Agency in Copenhagen, will have
Commission representatives, national representatives, which will
be the governing council of the body. Mr Stevenson, we are not
proposing bodies simply to create bodies. It is basically that
we think there is a need for a group of people, experts, to look
at this question and they need a certain status, a certain structure.
The Commission cannot do it: we are civil servants, for all the
advantages and disadvantages of that.
71. I did not know that.
(Mr Rees) These people will not be civil servants;
they will be experts, not like us. We are recognising our own
inadequacies here and saying that there are complex technical
issues here.
Mr Stevenson
72. Pass me the handkerchief! At least one other
member around this table and myself have spent some time in the
European Parliament. Every time I hear someone from the Commission
saying "We are not the experts. We need the help. We really
do not know where we are going here. We need help and assistance",
I can tell you that the hairs on the back of my neck stand up.
The Commission are very expert at what they are doing and where
they are going. What I am not clear about and the purpose of my
question is: whilst the point about co-operation and co-ordination
and all the rest of it is of value, I am still not clear about
what the long-term purpose of a European Union Rail Authority
would be.
(Mr Rees) We could treat this in different ways. Mr
Stevenson has been flattering the Commission civil servants by
saying he believes we can do everything but perhaps we have certain
doubts ourselves. We think that, with the development of a greater
international aspect for railway services, there are clear differences
in practice between the Member States' railways.
Chairman: Mr Rees, I am going to stop you. I
think we have the theory. What we want from you is a fairly straightforward
answer.
Mr Stevenson
73. I will change to another subject now and
go back a second on road safety to something I forgot to ask.
Does the Commission see the fact that in the UK we drive on the
left-hand side of the road as a road safety issue?
(Mr Rees) No.
74. My last question is about effective charging
for transport. I am looking at the White Paper here with the commitment
or the intention to develop the following guidelines: harmonisation
of fuel taxation for commercial users, particularly in road transport;
alignment of the principles of charging for infrastructure use;
and the integration of external costs. Would these be guidelines
that you intend to develop or would they be legislation, either
under the form of a Directive or a Regulation?
(Mr Rees) There are two different points there. You
are of course quite correct that the White Paper makes two points
about taxing diesel. The first is that there are tremendous differences
in the Community between the upper and the lower levels, with
the UK having the upper level. This creates difficulty for the
road haulage industry. We are recommending that there is initially
a reduction in the difference and that we move towards harmonisation,
a harmonisation above the average level. We make another point
in relation to diesel, if Mr Stevenson allows me, that there is
no common sense behind the differences in taxation that exist
between diesel and petrol. Diesel is just as bad as petrol in
terms of its effect on the environment and in terms of how we
cannot see any justification for de-taxing diesel, in a way. That
is the diesel issue. As far as infrastructure pricing is concerned,
infrastructure pricing is a mishmash of taxes and prices which
has developed over time without any real good intention behind
that. We believe that, if we are facing a problem of a shortage
of supply for infrastructure, we have to find ways to better use
the existing infrastructure in the various means of transport.
For this reason, we are developing a combination of guidelines
in the form of a Directive which sets out objectives for the Member
States but does not tell the Member States how they should achieve
these objective. It is not a Regulation.
Chairman
75. It tells you where you must go but it does
not tell you how the hell you are going to get there?
(Mr Rees) It helps you with some guidance.
Mr Stevenson: I wonder if I may interject? I
am taking up far too much time and I will be stopped in a moment.
Of course my limited knowledge of these things clearly suggests
to me that a Directive, even though it allows Member States to
choose how they get there, has the force of law, whereas guidelines
and recommendations do not.
Chairman
76. Shall we let Mr Rees answer his own question?
(Mr Rees) The Commission can issue guidelines but
what we are intending to do here is issue guidelines in the form
of a Directive which, and Mr Stevenson is right, is applicable
by law. But, let me add that there are strong arguments in favour
of this. A number of Member States are now thinking of changing
their infrastructure pricing system: Germany is moving over to
a kilometre-based system in 2003; the Netherlands is thinking
of doing it; Austria is considering it; other Member States are
doing it. What we are concerned about is a sort of Balkanisation
of the systems across the Community which leads to problems, particularly
for international road hauliers. We would like to see certain
rules set down, which would include interoperability in terms
of these charging systems; we have that in mind as well. We would
not be imposing on Member States that they have to charge so many
pounds, pence, euro, for their infrastructure charges, but there
are certain principles that we would like to see set out.
Mr Stevenson
77. I have two more questions. With fuel taxation
for commercial users, particularly in road transport, there is
a differential by definition between Member States, but would
you accept the proposition from me that when you consider all
the costs of operating commercial road transport, then those differentials
are nowhere near as marked? What I am suggesting to you is that
by concentrating on fuel taxation, you are only concentrating
on one, albeit an important, element in the cost of operating
commercial road transport. Inevitably, if the Commission goes
down this road, it will have to look at other costs, such as employment
taxation, if they are to be serious about harmonising the costs
of fuel taxation for road transport?
(Mr Rees) Mr Stevenson is right: obviously there are
large differences in all the costs applied to the road haulage
industry but in this particular case the difference seems to be
between 1 and 100 per cent between the highest and the lowest
in the Community. Particularly, as national road haulage is the
fastest developing part of the market, it seems to us to be totally
illogical to have such wide differences. Initially we would like
to reduce the differences. We think that the way to go in the
long run is to establish a single rate, but this would take time.
78. The White Paper says that by taking external
costs into account in a good many cases these harmonisation measures
and taxation measures will produce more revenue than is needed
to cover the cost of the infrastructure used. Then the White Paper
goes on to say that the available revenue could be channelled
into specific national or regional funds in order to finance measures.
Who would be responsible, in the Commission's view, for distributing
those funds for specific national and regional projects?
(Mr Rees) I will not hide from you that here we are
copying from the example of the Swiss where in Switzerland, to
finance the new long railway tunnels, the Swiss have put on a
road charge for vehicles crossing the country, which is creating
capital for these projects to go forward. In the specific case
Mr Stevenson is referring to, we would create enabling legislation,
which would allow the Member States to do something like that,
if they want to. It would not be Community money; it would be
Member States' money. If, for instance - and I cannot think of
a case in the UK - say, between France and Spain, crossing the
Pyrenees where there is talk of a new tunnel, the Spanish and
the French authorities create a system applying to the Pyrenees
area where they ring-fence a certain amount of the revenue from
tolls, et cetera, in this area and that goes into the funding
of a new road or a new rail tunnel through the Pyrenees, then
it is the Spanish and the French authorities doing it, not the
Community.
Chairman: I think it is clear at least where
the Commission thinks it is going.
Miss McIntosh: May I welcome Mr Rees to the
Committee. Can I ask you what relationship this transport plan
has to the Government's ten-year transport plan?
Chairman
79. Of course, Mr Rees, that was the question
we asked you at the beginning. Could we not take too long on that.
(Mr Rees) It does not have any direct relationship,
except that the UK Government is facing the same sort of problems
as the Community.
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