Examination of Witnesses (Questions 20-39)
MR RICHARD
TURNER, MR
ROGER KING
AND PROFESSOR
ALAN MCKINNON
12 JANUARY 2005
Q20 Chairman: Your members
have a view about where money comes from, do they?
Mr Turner: I think the question
is whether, in constructing a new road, it is faster and more
expeditious to use public money or private money, and I do not
think this example shows us it was faster. Equally, I do not think
it shows us it was cheaper. So in terms of an example for the
future, we would have to look at those two questions. In terms
of an on-the-ground solution to a problem we had, it is a marvellous
solution, and we can have different views about whether the tolls
were right, but it has actually solved for sometime the problem
in that area. All my members who use it are grateful that road
exists.
Q21 Mrs Ellman: Mr Turner,
you said your members find the toll road very successful, what
are they basing that on?
Mr Turner: The point that was
made earlier, that everything was trying to go along the old M6
before, now there is a choice and whether that choice is being
exercised by motorists or, to a lesser extent, trucks means there
are fewer vehicles on the old road, which means the enormous delays
which were there almost every day of the week, sometimes all day,
are no longer there, and travel through the area is much more
reliable than it was. That is what they are basing it on. People
will have different views on whether they should pay a toll and
how much, but the reality on the ground is much better.
Q22 Mrs Ellman: Has any
assessment been made by the industry of the cost of congestion?
Mr Turner: There is a generalised
cost which was done sometime ago, where we estimated the cost
of congestion being something like £20 billion a year, which
is an enormous amount of money, but it is based on the aggregate
of delays over the whole network.
Q23 Mrs Ellman: If road
pricing were to become more extensive, do you think industry has
done enough work to make a rational assessment of what would be
worth its while in financial terms and which roads to use?
Mr Turner: If we introduced road
pricing across the board?
Q24 Mrs Ellman: Yes.
Mr Turner: The issue is that if
all the work that has been done, the study work and modelling
which has been done, is correct, it suggests that introducing
a charge—quite a modest charge—for using a road at
a particular time of the day could actually change the demand
for the use of that road. If the lorry is paying to use that road,
we would expect the value that the operator gets from reduced
congestion to far exceed the cost of payment. Industry makes choices
about payments in very different ways from individuals, and industry
is driven by what the cost is and all the costs associated with
it and if there is a cheaper way. So therefore paying something
to save more is always what industry would choose to do.
Q25 Mrs Ellman: Do you
think enough work has been done throughout industry to assess
what the cost is?
Professor McKinnon: Industry has
been responding to the increase in daytime congestion. If you
look at the proportion of lorry kilometres which are run between
8 o'clock in the evening and 6 o'clock in the morning, 20 years
ago that was about 8½%, today it is about 20%. So companies
are changing their operations.
Q26 Chairman: Only 20%,
it seems much bigger.
Professor McKinnon: There has
been about a two and a half fold increase in the amount of running
of trucks in the evening and during the night over 20 years.
Q27 Ian Lucas: Going back
to the M6 toll road, from my own personal experience of driving
on the toll road what was very striking to me was, firstly, the
lack of lorries on the road and, secondly, when one returned to
the original M6 the immediate impact of the huge number of lorries
which were on that road. I was wondering whether any assessment
had been made by the haulage contractors using the road about
the time which would be saved as compared with the cost of using
the M6 toll road. It seems to me those contractors were simply
not taking into account the increased speed with which the journeys
would be carried out if they used the new road. I calculated about
30 minutes was taken off the journey I was undertaking as a result
of using the new road.
Mr Turner: I would be surprised
if it was as much as that but it is significant. Of course, not
all lorry drivers and operators make the right decision every
time, and there will be exceptions, but generally I am really
confident that the right decisions are made. If you looked at
that road when the toll was £11, lorries were as rare as
hen's teeth on the M6. Now it has been reduced to £6, there
is an increasing number of vehicles using it. Bear in mind that
the real incentive to use it would be that the old road is really
solid, but in fact the old road is not now because of the car
transfer, so therefore the experience on the old road is generally
much better than it was. So lorry drivers and operators are experiencing
that and benefiting from that.
Mr King: I would just point out
that Birmingham is a hub-and-spoke part of the national distribution
system and many lorries are coming into the conurbation to exchange
goods and move on. Secondly, not all can use the M6 toll, some
are heading off down towards the M5 whether they are coming up
from the South or North, but there are many other factors which
impact on this. For instance, you would not pay to use the road
at night time when the existing road is relatively clear. Off-peak
during the daytime the M6 Link, as it is called, is still quite
clear. If the matrix signs which the Highways Agency have conveniently
put up are not suggesting there are any delays or hold-ups, the
driver will not divert and pay extra money to use the toll road.
Q28 Ian Lucas: Even if
it takes less time?
Mr King: Well, it does not, it
is a slightly longer route actually by a mile and a half or so,
which is really neither here nor there. Going through a conurbation
at 50 mph is no different from using an M6 toll route at 50 mph
if the former road is closed.
Q29 Chairman: It might
have a slight difference because it might be illegal.
Mr King: 50 mph?
Q30 Chairman: Yes.
Mr King: On a motorway?
Q31 Chairman: No, through
the conurbation.
Mr King: Where the M6 goes through
the conurbation, that is still on the motorway.
Q32 Chairman: As long
as we make that quite clear because we feel rather strongly about
miles per hour on this Committee. Before I call Miss McIntosh,
could I ask you both, have you supported the introduction of national
road pricing all the way through? Have the views of your members
changed in the last five years in the light of all the different
things which have happened—congestion charging, the M6 toll,
the Transport White Paper? Has there been any change in the view
of your members?
Mr Turner: If I can respond on
behalf of the Freight Transport Association, we put out a policy
paper in 1995 recognising that national road user pricing would
be an inevitable consequence of the growing demand for road use.
So prior to that it was not strong, but over the last ten years
we have been stronger on the view that eventually it will happen.
However, importantly, adding to that, that is not a substitute
for doing what needs to be done in the short-term and can be done
to improve the capacity of existing roads.
Mr King: I think it would be fair
to say, Chairman, that our members were very agnostically inclined
towards road pricing of any kind if it was going to be used as
a substitute for reasonable road investment programmes. If we
get those road investment programmes, then many or most of our
members believe in the fullness of time, when the technology is
available, road pricing may be the only way forward. Indeed, they
themselves may be subject to variable charges and pricing, but
it can only be seen in the context of everybody being subjected
to the same pricing regime, so there is a real decision to be
taken about whether you want to run a truck at peak periods in
the knowledge that ordinary motorists, commuters, may have been
priced off the road.
Q33 Mr Stringer: Would
it be true to say that your two associations have become more
enthusiastic because the road-user charging for lorries actually
levels out the playing field with foreign operators? Is that the
driver for your policy?
Mr King: There has to be a lot
of support for a system which is going to produce that level playing
field in operational costs which British hauliers want in competition
with their foreign counterparts. There may only be 0.4% of vehicles
on the road in the UK at any one time which are foreign-owned,
but when you reduce that down to the element of competition those
foreigners represent it probably rises to about 3% or so, because
obviously the foreign trucks are not competing against dustcarts,
petrol tankers, milk tankers and so on, it is general haulage
vehicles they are competing against. We recognise that if we can
get that level playing field, it will remove a distinct disadvantage
for British hauliers, but above all else, it is annoying and irksome
to see these foreign operators using our roads absolutely free,
gratis and for nothing, when we in turn in Europe have to pay
to use many of their roads. So to that extent the LRUC offers
us an opportunity to level out that playing field. It is not without
its problems and snags, and we have a number of points with which
we are dealing with the Department to produce a system which is
simple, straightforward, cost effective, cheap and accurate.
Mr Turner: Our view has not been
substantially affected by the lorry road-user charging scheme.
Our view, as I mentioned earlier, has been based on industry always
being prepared to buy better if they can get better value out
of it. Universally, my members would say they already pay enough
in tax and they would expect the road system to be better than
it is, but if you start from the point that it is not going to
get much better than it is, how do we improve the way in which
people can use it, and this is an obvious way of doing it.
Q34 Miss McIntosh: Mr
Turner, you say your members broadly welcome the M6 toll road,
are there any other roads which you think would be suitable for
that kind of exercise?
Mr Turner: The welcome we got
for the M6 toll road is because of the fact it is there, it is
a bit of infrastructure we can use and it has improved everything.
Whether a toll facility of that nature, constructed in that way
out of private money is the right solution, I do not know. One
of the topical questions at the moment is whether we should have
another toll road north of Birmingham up to Manchester. My answer,
and the answer of my members, is yes, we do not mind what sort
of road it is but the important thing is to choose a route and
build it quickly. What is important is getting it available because
day to day I can guarantee that road comes to a standstill because
of too much traffic, so the sooner we get it the better. Our support
would be, if a toll route would deliver it quicker than any other
route, let us have it because we need a solution.
Q35 Miss McIntosh: How
long do you expect the M6 toll road to remain congestion-free?
Mr Turner: I would imagine forever,
because the M6 toll road will be managed by Macquarie who operate
it in a way which maximises their revenue and they will not get
any revenue if it is congested because nobody will use it. So
they will price it to keep it free-moving.
Q36 Chairman: So we are
contemplating a £20 toll, are we?
Mr Turner: There is no control
on it. There is no control on what toll they charge at all, they
can charge what they like.
Chairman: They might have a nice empty
road then.
Q37 Miss McIntosh: I do
not think that was quite the intention. Mr King, in your memorandum
you expressed uncertainty about the technology which is being
proposed, the CBI have said in their memorandum that they think
satellite position-fixing technology is the most reliable. Would
you like to share with the Committee what your reservations on
the technology are?
Mr King: Reservations on the technology
are the technical solutions which will have to be arrived at which
will take into account every single road in the UK being subject
to the lorry road-user charge. The different scales of charge—based
on axles, weight, euro emissions rating condition of a truck,
environmental regulations of the truck, night or day, type of
road, whether it is a motorway or ordinary road—and then
the collection of the charge has to be effective, for each truck,
and accessible by the operator if he is to know which truck has
run up what bill. Then, coupled with that, the fuel duty rebate
system will have to be available for each truck so he can set
his lorry road-user charge against his fuel duty rebate and then
settle with the Government, or the Government settle with him,
at the end of the accounting period. That is in our view a big
challenge. There is also the challenge of Northern Ireland, with
130 roads across the border with the South, as to how actually
you get this system to work at all. As far as we know, you cannot
have one system for one part of the UK and ignore the other part.
Until that position is resolved we do not see at the moment how
the technology is there to accommodate that requirement. We are
told it is.
Q38 Chairman: I thought
we were doing that all the time. Do you want to comment on this,
Professor?
Professor McKinnon: My feeling
is that the LRUC as currently proposed is much more complex, costly,
and elaborate than is required at this stage. I think we should
go back and think about what the objectives are for doing this.
The industry's main desire is to level the playing field for foreign
operators, there is also the desire to decouple the taxation of
trucks from cars, and a third one is to move to a distance-based
system of taxation. My feeling is that those three fundamental
objectives can be achieved with a much simpler, cheaper, less
risky system.
Q39 Miss McIntosh: What
is that?
Professor McKinnon: I could describe
that in a moment. The only reason for going for a LRUC as currently
proposed is if you want to vary the toll by type of road, by time
of day, by geographical area, and you only want to do that if
you are going to congestion-charge trucks. My argument is that
it does not make sense at this stage to impose congestion charging
on a single category of traffic which only accounts for 14% of
all traffic and only 5% of the growth of traffic up to 2010. The
alternative way of doing it is a very simple way of converting
fuel taxes into a distance-based system of taxation, so we would
avoid the need to track the vehicles. What we propose to the Committee
is an alternative way of taxing trucks which will meet those first
three objectives fairly cheaply, quickly and easily. If I can
take a few minutes to describe our system?
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