Select Committee on Transport Minutes of Evidence

Examination of Witnesses (Questions 1-19)


12 JANUARY 2005

Chairman: Good afternoon to you, gentlemen. We have one small piece of domestic housekeeping before we begin, and then I shall give myself the opportunity to welcome you. Members having an interest to declare?

Ian Lucas: Member of AMICUS.

  Mr Stringer: Member of AMICUS.

  Chairman: Member of ASLEF.

  Mr Donohoe: Member of the Transport and General Workers' Union.

  Mrs Ellman: Member of the Transport and General Workers' Union.

  Miss McIntosh: Member of the Public Policy Committee of the RAC Foundation.

Q1 Chairman: Gentlemen, you are most warmly welcome this afternoon. May I ask you firstly to identify yourselves for the record?

  Mr Turner: My name is Richard Turner, Chief Executive of the Freight Transport Association.

  Mr King: I am Roger King, Chief Executive of the Road Haulage Association.

  Professor McKinnon: Alan McKinnon, Professor of Logistics, Heriot Watt University, Edinburgh.

Q2 Chairman: Thank you very much indeed. Did any of you have anything you wanted to say before we begin?

  Mr Turner: Madam Chairman, we agreed beforehand we did not want to make an introductory statement other than just to emphasise a point which might help the discussion subsequently, that lorry road user charging, which I am sure we will discuss, is more about how we apply taxation to lorries, and road pricing, which is the main theme of this inquiry, is more about how we manage demand and how we raise money to pay for infrastructure. We wanted to apply that distinction before we started.

Q3 Chairman: I think that is helpful, I have no doubt we shall be asking you about both of those. Before I come to the Professor, can I ask you, Mr Turner and Mr King, do you agree it is impossible to build our way out of the congestion problem without limiting traffic growth?

  Mr Turner: I agree that road building is not going to provide the ultimate solution. We do need to do some more road building but ultimately we do have to look at ways of managing demand.

  Mr King: I think, Chairman, we can go a lot further towards providing infrastructure. We have never really predicted and provided, because predictions have always been wrong and we have never attempted to provide. It would be wonderful to think we could have a system of predicting and providing. Whilst I would say we do need to improve the existing infrastructure with additional build on motorways, attention to pinch-points within the system, ultimately with unbridled access to the roads by all those who want to use them we will have to find another way of being able to control traffic flows.

Q4 Chairman: Do you have a kind of scale you could give us?

  Mr King: I would think technically, as we understand it, it would be difficult to see a system of road pricing for everyone to be introduced within the next ten or 15 years.

Q5 Chairman: I am thinking in terms of road building. What size would the road building programme need to be in your estimation?

  Mr King: In our view, a fairly modest exercise in road building. That would mean widening some of the existing motorways as well as improving road junctions within the strategic road system. One would want to distinguish between the needs of the strategic road system run by the Highways Agency, which needs a rolling investment programme and not one which stops and starts, and all the roads run by local authorities where obviously it is in their gift of decision as to how they invest in those.

Q6 Chairman: Surely if you widen these strategic points, particularly the pinch-points, that space would be occupied almost immediately by private cars, which would not benefit the freight industry, would it?

  Mr King: I think one needs to be very careful in putting that argument forward because whilst traffic growth is increasing nevertheless the capacity of the road with an additional lane to accommodate even a third more traffic is quite considerable. You have only got to look at some of our motorways which were built as two-lanes in the late 1950s and were widened to three-lanes in the mid-1960s to see that they have stood the test of time for nearly 40 years. So it would not be unthinkable to suggest another lane to bring them up to four-lanes would last another 40 years.

Q7 Chairman: What is the biggest problem? Is it the average travel time or the unpredictability of trying to travel on congested roads?

  Mr Turner: For industry, predictability is important. Speed is not the issue, predictability is important. The loss of productivity because of congestion for industry is currently estimated to be in excess of £20 billion a year. That is just unacceptable in a modern economy, and I know of no other modern economy that has congested inter-urban roads—urban areas are different—which are not planning to widen and improve them to cope with that. That is what I believe we should do. That is what the RHA, the FTA and the motoring organisations put forward last year as a solution in terms of widening our key trade routes by an extra 12 feet. That would mean that over about a five year period an extra £1 billion would have to be spent on road building and that would, I believe, get us into a position where we could afford to wait for a solution that managed demand, and that would keep our economy moving in the meantime.

Q8 Chairman: Are you really saying some sort of road pricing is inevitable as a management tool?

  Mr Turner: Personally I believe it is, because I believe we will get to the stage where we need to modify behaviour and encourage people to behave in a slightly different way, and price I believe is the only way we are going to do that, but it is not possible in the short-term. It is not possible in the short-term I believe partly because of the politics, because I do not think any of you would want to go into a general election saying, "We are going to charge the motorists more to use roads", and secondly because of the technology, which is just not there. Whilst you might think it is there, just think of the spectre of trying to retrofit 28 million vehicles with it; you just could not do it. The road pricing feasibility study with which I was involved with the Department for Transport and many others looked at this issue and said the only way it would be practicable to apply road pricing to all vehicles would be if you allowed time for this equipment to be built in by the manufacturers at the start.

Q9 Chairman: How short is the short term? Is it ten years, 30 years? What is your short-term?

  Mr Turner: I think you are talking up to about 2015, 2020.

Q10 Chairman: Do you agree with that, Mr King?

  Mr King: I do indeed. I think the systems themselves have still to be technically evaluated. It is one thing, as the Government intends to do, to levy a road user charge on 425,000 heavy goods vehicles, it is entirely another to levy a charge on 28 million other road users which will have sophistication, variable time charging, zone charging, regional charging, added to it. So we would suggest the technology is still yet to be devised. It may be available in two, three, five years' time, in which case vehicles need to start to be produced with the system in for switching on ten years later.

Q11 Chairman: Do you have a comment on that, Professor?

  Professor McKinnon: Merely to add that it seems to me once you extend electronic road pricing to all categories of traffic, with 28 million vehicles covered the collection costs are going to be huge relative to the current systems we have for collecting tax from transport, namely fuel tax and vehicle excise duty. There are figures like collection costs of £5 billion as opposed to the total revenue of £9 billion, so the net tax then is a lot less than we currently get, and I simply wonder how we would make up the shortfall in taxation.

Q12 Mr Donohoe: If national road pricing was introduced, should the tariffs be fixed locally or nationally?

  Mr Turner: Are we talking about national road pricing for all vehicles?

Q13 Mr Donohoe: Yes.

  Mr Turner: I think they have to be fixed by the people managing the road. There is a case for local pricing in urban areas, but if you are putting in pricing, and if the purpose of putting in pricing is not about raising money but is about managing demand, then the person who should be fixing the tariff should be the person who is managing the demand. That would be nationally for some roads and locally for others, but clearly they would have an impact on one another.

  Mr King: I would add to that that the unpredictability for the road haulier in knowing what the journey is going to cost, because they are going to have to understand dozens and dozens of different area pricing schemes and that is going to make the operation of the transport sector in the UK a very difficult challenge indeed. Understanding that, what does that do to the UK's productivity and competitiveness in Europe if you cannot get an understanding of what your transport costs are going to be?

Q14 Mr Donohoe: Do you think part of this charge should be peak-period charging as well as charges outside the peak hours? If there was variance when you were sitting on the road, that would help you, would it not? So part of this should be off-peak tariffs as well as peak tariffs?

  Mr Turner: A reduced off-peak tariff as well as a peak tariff?

Q15 Mr Donohoe: Yes.

  Mr Turner: It has its attractions. Obviously if everybody was subject to the same pricing regime, cars as well as trucks, obviously taking account of the weight of the vehicle, then if at peak periods other motorists could be priced off the road, road haulage operators might be prepared to access those roads at that time of the day in the knowledge they were not going to be held up in congestion. But one wonders at what level that charge would have to be to get commuters off, say, the M25 in the morning and evening. It would probably be almost a penal rate, in which case paying that sort of high tariff is not something anyone would particularly welcome.

Q16 Mr Donohoe: Does the Professor want to add something?

  Professor McKinnon: The issue here is whether we would be varying tolls just for trucks or for all categories of traffic. I think it would be quite wrong to impose congestion charging on trucks in isolation without doing it for all categories of vehicle. For one thing, road hauliers would feel that if they are paying premium tolls at peak times they might like something in return for that, namely freer flowing traffic, and that will never be achieved until the same charges are imposed on cars.

Q17 Mr Donohoe: How successful has the new M6 toll road been for your members, Mr King?

  Mr King: I do not think it has been successful or unsuccessful. The take-up by road hauliers on that particular road was negligible when the rate for one journey, for the 27 miles or so, was set at £11. Now it is reduced to round about £6, the take-up has been a little more significant. I do not think we can learn a lot from the M6 toll because, right from the early stage, no estimations were ever made about traffic flows, about the percentage of trucks which were travelling from the South East to the North West which were not in the position of dropping off goods in the middle of the West Midlands conurbation and then picking up more goods to go up on their journey north. There are very few through-traffic figures—I know because I asked the question in the late 1980s—which had never been kept or arrived at by the Department of Transport to identify the traffic flows around the West Midlands conurbation, because if there had been a significant case for it we would have seen the road being used far more than it is at the moment.

Q18 Mr Donohoe: Notwithstanding that, have you had feed-back from your members? Have you done surveys of your members to establish whether or not they think it advantageous to have the road, whether they still use the original M6, whether that has improved? Have you had any feed-back?

  Mr King: The feed-back is that motorists are using the M6 toll, thus reducing the congestion on the existing West Midlands link, which road hauliers continue to use.

Q19 Mr Donohoe: That has been to your advantage?

  Mr King: That has been to our advantage.

  Mr Turner: From my members' point of view, they see this as a marvellous new road asset. No mistaking, the West Midlands was an absolute mess until this road was opened and now it is not and is much better. How long it took and whether or not it should have been constructed from private money from Australia is another question.

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