Examination of Witnesses (Questions 440-459)
MR JAMES
WALSH, MR
MICHAEL ROBERTS
AND MR
DAVID FROST
26 JANUARY 2005
Q440 Mrs Ellman: Would
they be prepared to pay if it was better? The CBI survey that
you quote says that the annual costs of congestion are £20
billion. If charging was to improve that, would business people
be prepared to pay?
Mr Roberts: Yes, if they had some
degree of comfort that they were going to get a return in terms
of improved service. That is a pretty important caveat.
Q441 Mrs Ellman: Are there
any other comments?
Mr Frost: There has been a sea
change in thinking from the business community, an understanding
of the amount paid in taxes through motoring generally and an
appreciation that if we are going to get major, new, strategic
highways built or roads widened in the UK, that money is not simply
going to come from the Exchequer. Therefore, innovative ways of
raising that finance will have to be developed. I think the construction
of the M6 toll has acted as a precursor to the development of
other ideas and has been a concept that has been embraced by the
business community.
Mr Walsh: I agree. There is no
doubt that business is indeed prepared to pay more as long as
it can see that it is clearly getting more back.
Q442 Chairman: Both of
you have said this but, forgive me: in what sense? On the whole,
my experience of businessmen—I mean no disrespect—is
that they are not easy to convince that they ought to pay more
for services.
Mr Walsh: Our argument is that
the whole equation of road pricing should be revenue neutral.
By that we mean that you get a combination of returning funds
raised to motorists, both through reductions in taxation—most
probably excise duty on fuel—and through putting some of
the funds into extra road capacity. If businesses and motorists
in general can see that they are getting that payback through
a reduction in their straightforward costs, through taxation or
through extra road capacity, they will say, "This is a very
acceptable deal. We will support it."
Q443 Chairman: Does that
except the fact that motoring is getting cheaper in real terms?
Mr Walsh: Our members feel that
the costs of congestion are rising. Congestion is an increasing
business problem and business cost. Although you are absolutely
right in that improved technology and fuel consumption are delivering
some cost savings, the costs of congestion are rising at the same
time.
Q444 Mrs Ellman: When
you say that this should be revenue neutral, what do you mean
by that? Neutral to the individual motorist? What do you think
it means?
Mr Walsh: It means as much as
businesses pay in extra costs through road tolls or road pricing
and road charges, they have to feel that that same amount of money
is coming back to the benefit of the motorist. Essentially, that
the extra funds are ring fenced.
Mr Roberts: The debate about revenue
neutrality is more complex than was first suggested. Revenue neutrality
applied across road users as a whole would probably be desirable
in the early stages—I am being deliberately vague—of
the introduction of, say, road pricing, as an important test and
an important means by which government establishes trust with
the road user that charging is intended to be a way of dealing
with the problem of congestion, for example, rather than simply
raising more money; but, over a period of time, if that trust
is indeed established with the road user through this and other
means, there may be a case for saying that you need to move away
from revenue neutrality as a way of financing future transport
improvements, either specifically in the road network or more
general in the transport network. There is still a lot of discussion
to be had with road users generally, not just business but personal
users of the road network, to establish whether that is indeed
the way that you take it forward, but I do not think one should
automatically assume that revenue neutrality must always be part
of any charging scheme.
Q445 Mrs Ellman: If there
was a national decision taken to have road charging as a policy,
who should set the charges? Should that decision be taken nationally
by government, by local authorities or a combination of both or
someone else?
Mr Frost: There must be some form
of overall national strategy and not simply an ad hoc group
of programmes developing. On the back of that, what we would clearly
want to see is some form of national payment portal where, if
a motorist or a haulier was driving from one part of the country
to another with different schemes, they would not have to keep
paying endless different charges through different mechanisms.
There must be some clarity and a national scheme. Overall, we
would understand if a national programme was developed.
Q446 Mrs Ellman: Should
there be local authority charging schemes?
Mr Frost: If local authorities
had full community support in doing that and clearly involved
the business community in that process of determination, we are
not opposed to it, as long as the monies that are raised are put
back into improving public transport and transport infrastructure
within the boundaries of that local authority.
Q447 Mr Stringer: Edinburgh,
Bristol, and Nottingham have at different times proposed car parking
charges. In Nottingham's case, there is a road pricing scheme
being considered. Have your local members supported those schemes?
Mr Frost: To varying extents because
they are different types of schemes being proposed in different
areas. I think in the case of Nottingham there has not been support
because what has been proposed is a workplace car parking levy.
There is a very strong view that, if there is going to be some
form of road pricing, that should apply to all sectors of the
community and not just target those in employment and those in
business. Therefore, it has not been supported by the business
community.
Q448 Mr Stringer: Does
your local Chamber in Edinburgh support the congestion charging
scheme?
Mr Frost: The Edinburgh Chamber
of Commerce is working with the authorities up there on that scheme,
yes.
Q449 Mr Stringer: They
are actively campaigning for a yes vote in the referendum?
Mr Frost: They are following with
interest, not going as far as campaigning for.
Q450 Mr Stringer: What
does that mean? That they are not opposing it or that they are
supporting it?
Mr Frost: Exactly. They are not
supporting it or opposing it at the present time.
Q451 Mr Stringer: They
are sat firmly on the fence?
Mr Frost: At the present moment,
they are monitoring progress.
Q452 Mr Stringer: Can
you give us further insight? Is that because the different businesses
who comprise the Edinburgh Chamber have different views and they
cannot reach agreement?
Mr Frost: I can only speak for
the one business group that we represent. I will come back with
further information.
Q453 Mr Stringer: That
would be helpful. You also said that money should go into local
transport schemes if it is raised from a local congestion charge.
Could it not go into another public good? One of the academics
before us previously said that the money from these schemes could
usefully go into regenerating areas which would help business,
which would concentrate commercial activity and that would help
transport.
Mr Frost: There is a large degree
of cynicism by the business community in terms of road taxation.
They do not perceive motoring as being cheaper. What they see
is essentially somewhat over £40 billion being collected
and a considerably smaller figure being spent on road improvements.
The concern would be that the money was collected from some form
of local road pricing scheme and that simply was used as a substitute
for the existing expenditure; then that money was siphoned off
to support some other area of local authority activity. The driver
for this seems to be very strongly the need to improve public
transport within localities and therefore the view from business
is, okay, if that is the explicit intent, the money that is raised
should be clearly earmarked against that.
Q454 Mr Stringer: Do you
think the M6 toll road has been a success?
Mr Frost: I think the M6 toll
road has been an enormous success and the business community would
say so. When we did the research, it was clearly seen as a major,
strategic highway. This was not a road purely for the West Midlands.
The evidence that we have now is that the business communities
that appear to be benefiting significantly are those in the north
west, those in the east of the country and those in the south
east.
Mr Walsh: Our members feel the
toll road has been a significant success. We asked them in a survey
that we ran a few months ago and we included mention of it in
our written evidence to you, I believe. 84% of our members who
use the toll road say they have faster, shorter journey times
and better traffic flow. They are very enthusiastic. The one note
of scepticism was about the HGV charges. Those have now been reduced
from £10 to £6 since we conducted the survey. We have
no up to date data on how the current level of charge is going
but I would imagine it is better received.
Q455 Mr Stringer: Do you
see it as a model for developing a motorway system in the future
or do you think it is just a one-off that is relevant to that
particular corner of the country?
Mr Walsh: I do not see it as a
one-off; nor does it have to be the only template that we follow.
We should certainly be looking for building extra capacity. It
seems to me the Expressway proposal for the M6 north of the toll
road is not so different from the principles we have seen put
into action with the toll road itself. It is a new motorway, probably
built by a private provider being allowed to raise revenue subsequently
through tolls. Yes, I think it provides a good model to follow
and a good lesson to learn, especially about how you have to make
sure that you have your prices set at the right level to maximise
the use of the motorway and smooth out demand as effectively as
possible.
Q456 Clive Efford: Has
the view of your organisations changed towards congestion charging
or inter-urban road tolls in the light of the experience of the
London congestion charge and the M6 motorway toll?
Mr Frost: In the survey that we
carried out last year, there was a significant percentage that
did support the concept of road pricing. In the case of London,
the London Chamber of Commerce did accept the congestion charging.
It was opposed to the extension of it and a price hike but it
believes there should be perhaps some fluidity in the structure.
There should be windows within the day which would allow certain
sectors to get through.
Q457 Clive Efford: Mr
Walsh said earlier that his members recognised that there was
a cost of congestion to their business. Do your members accept
that?
Mr Frost: Absolutely. A survey
that we did equated that out as being something of the order of
£27,000 per year to business, which came out at £15
billion a year to the economy.
Q458 Clive Efford: They
are opposed to the congestion charge in London?
Mr Frost: No, they are not opposed
to the congestion charge in London. They supported the congestion
charge but they are opposed to an extension of the congestion
charge within London.
Q459 Clive Efford: What
about the issue of whether your views have changed over the last
five years in the light of the experience?
Mr Roberts: From the CBI perspective,
the experience with the London charge has not altered our support
in principle for a move to road pricing subject to meeting a range
of conditions. There have been issues of concern in London about
the way in which it is operated. Some of those are procedural
about how the fleet system is operated. I know there certainly
has been a concern among certain parts of the business community,
particularly in retail, about the extent to which the charging
scheme may have an impact upon their business. The important thing
to remember with regard to the London scheme is that it is a reasonably
crude scheme. It is a flat charge which operates for a large part
of the day. It does not vary according to time of day; nor does
it vary according to particular locations in the capital. Those
of us who are supportive of the use of road charging in principle
see the value of it in time as being a flexible tool which is
responsive to road conditions which vary either by geography or
by time. The London scheme does not really offer that.
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