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Mr. Chapman: I think that it can be met from the resources of Merseytravel and that there is scope for making more use of the ample resources that are available in Merseyside. I will develop that point later, I hope. I do not think that tunnel users should be expected to pay for other transport projects. It is a tax on them and it is not fair. My point, which is not a constituency one, is that, overall, if a tunnel toll is particular to the Merseyside economy, it will serve as a considerable competitive disadvantage to that economy because it deters investors, it deters foreign direct investment, and it costs people.
For example, if John Lewis were to take a lorry through the tunnels four times a day, five days a week, 50 weeks a year, according to my calculation the overhead would be £10,000 in that lorry alone. If we multiply that figure by the number of lorries going to and fro from the docks, the number of delivery vans going through and all the people who are legitimately trying to get to work, we realise that we are talking about a considerable disadvantage to the Merseyside economy. If we then increase that considerable disadvantage year on year, whether we need to or not, we will be shooting ourselves in the foot.
Liverpool has just won the title of capital of culture, which will allow its development in various ways. Why, then, should we hinder that development by passing this Bill? Hindering that development is precisely what this Bill would do.
Mr. Howarth: My hon. Friend's amendment proposes a five-year review, yet he keeps referring to annual increases. What he means is annual reviews, which are not necessarily the same thing.
Mr. Chapman: I thought that I had already answered that point, so I will not repeat it. What I am trying to say in my own awkward way is that it is said that Merseytravel goes in for some creative or unusual accounting, which allows profit from the tunnels to appear to be less than it really is. One difficulty with this issue is that when we try to raise it, somebody always tries to shut us up. When people raise it publicly, they are threatened with action. We may not be exclusively right in the views that we hold, and there may be nuances of error; but it is surely right and proper that we discuss these things openly and freely.
Stephen Hesford: My hon. Friend mentioned an internal loan and accounting practices. Does he agree that the internal loan appeared to be—
Mr. Deputy Speaker: Order. This cannot have anything to do with the amendment at all. The only threat to the free discussion of this issue by the hon. Member for Wirral, South (Mr. Chapman) is from the Chair, in that I have to uphold the rules of the House to ensure that debate is strictly relevant to the proposals that he has placed before the House. He has been speaking for 43 minutes already and he is in danger of becoming a little repetitious. I simply give a first warning on that.
Mr. Chapman: I shall move on, Mr. Deputy Speaker, and try to deal with some other points. I have probably covered the point about Merseytravel's accounts, although not in the detail that I would have liked. However, there will be further opportunities to discuss it.
The tunnels are in profit and there is no sign of them ceasing to be so. A five-yearly rise seems perfectly adequate to me, and, taking into account the fragility of the Merseyside economy, my amendment would limit the damaging effects on local industry and business of an opportunity to apply a year-on-year toll rise. The current arrangements are thoroughly bad, and a five-yearly review would be better.
Mr. Wareing: My hon. Friend might like to consider one aspect of the memorandum to the Bill. Merseyside passenger transport authority said that the
- "two cornerstones of this Government's policy on integrated transport are to develop public transport and reduce road traffic".
Mr. Chapman: That is absolutely right. The fact remains that, judging by the bus services in my constituency and the letters that I receive about train services, switching to rail or to public transport in the form of coach journeys is not a practical alternative. Similarly, as I said earlier, switching to the Runcorn bridge is undesirable and not a practical alternative. It is already chronically congested to such an extent that proposals for another Mersey crossing as a response to the problem have already been made. Although the Bill is presented as a means of controlling traffic, it has nothing to do with that. It is simply another means of raising dosh—nothing more, nothing less.
5.30 pm
I shall proceed by examining the RPI minus X formula, which is specific to my proposed amendment. It uses a formula for raising tolls slightly different from Merseytravel's model. The current framework requires Merseyside passenger transport authority to justify any increase in tolls to the Secretary of State. The removal of that condition amounts to removal of accountability. Tolls could be raised in perpetuity, regardless of cost-effectiveness and efficiency, and without the approval of any outside authority or tunnel users. If the MPTA is to maintain any semblance of accountability and credibility, it must either institute a robust and, to some extent, binding system of consultation or adjust its formula to that of RPI minus X.
The aim is to have X set as a figure by the Secretary of State. The amendment would effectively institute a system commonly used among natural monopoly utilities to provide a regulatory check on rising prices. Price regulation is designed to control the abuse of market power. The aim is to ensure that prices are no higher than would be charged by an efficient company operating in a competitive market. As I have said, I view the MPTA as an organisation with a tendency to profligacy, which necessitates the introduction of such a system in order to enforce efficiencies in preference to allowing the current unchecked growth.
Stephen Hesford : Does my hon. Friend agree that the formula that he is helpfully setting out is similar in effect to the one that was applied to the privatised utilities? It has worked well in respect of the former public companies, to the benefit of consumers.
Mr. Chapman: I agree with my hon. Friend and I was going to make that point in a few moments.
I have always felt that Merseytravel's chosen formula for annually reviewing tolls was flawed. Putting up prices in relation to inflation may seem reasonable, but inflation may not always be at its present level. During the Thatcher years, it reached 15 per cent., or thereabouts—my hon. Friends will correct me if I am wrong. If we increased tunnel tolls by 15 per cent., without any effective consultative mechanisms in place, it would indeed be disastrous for the economy of Merseyside. It has to be remembered that the retail
prices index is based on the price of a basket of goods—essentially products such as food and fuel. The MPTA, the Mersey tunnels and other public utilities do not use them—or at least not in any large measure.I am not happy about the fact that Merseytravel is asking for an arbitrary power to raise tolls year on year.
When price increases have been justified in the past, they have been granted, and I can see no reason why they should not be granted in future, provided a case is made for them.
Stephen Hesford: Is my hon. Friend aware that while the Bill passes through the House, under the scheme for raising charges that currently exists, the Merseyside passenger transport executive—somewhat cheekily—is putting through an order to raise the cost of using the tunnels? That is happening under the old system, as we speak, which demonstrates that it can be used as and when necessary.
Mr. Chapman: Absolutely, and I have no problem with tunnel toll increases if they are justified. In the past, when the executive has justified increases, it has obtained them. That is why I did not raise any objection in the consultation on the toll increase. If the executive can establish a need to do so, tolls should be increased. However, the Bill asks for toll increases without justification, save that the cost of living index has risen.
RPI minus X is effectively a price control and a method of bringing efficiency and cost-effective service to a monopoly organisation, which is what the Mersey tunnels are, being publicly owned. It was originally implemented in the 1980s and 1990s to deal with poorly managed nationalised industries and it proved effective. Costs were cut and, eventually, significant price reductions were passed on to customers. Would not we like to see that in relation to the Mersey tunnels? Merseytravel should be made to conform to the restrictions, and efficiency savings need to be made if tolls are not to keep rising. I can see no case for increasing tolls, whether or not there is any cause to do so. In fact, I can see considerable harm being caused to the public of Merseyside and to the economy.
It seems unfair that Merseytravel expects tunnel users to give and give, while it gives nothing back.
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