UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 458-i
House of COMMONS
MINUTES OF EVIDENCE
TAKEN BEFORE
TRANSPORT COMMITTEE
THE EDDINGTON TRANSPORT STUDY
Monday 16 April 2007
SIR ROD EDDINGTON
Evidence heard in Public Questions 1 - 146
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Oral Evidence
Taken before the Transport Committee
on Monday 16 April 2007
Members present
Mrs Gwyneth Dunwoody, in the Chair
Mr David Clelland
Clive Efford
Mrs Louise Ellman
Mr Eric Martlew
Mr Lee Scott
Graham Stringer
________________
Witness: Sir Rod Eddington,
Government Specialist Transport Adviser, gave evidence.
Chairman: Sir Rod, you know some of the ground rules,
I do not need to tell you to speak up.
Would you forgive us one little bit of business, members having an
interest, please declare them.
Mr Clelland: I am a member of
Amicus.
Mr Martlew: I am a member of the
Transport and General Workers' Union, and General and Municipal Workers' Union.
Graham Stringer: Amicus.
Chairman: Gywneth Dunwoody,
ASLEF.
Mrs Ellman: I am a member of the
Transport and General Workers' Union.
Clive Efford: I am a member of
the Transport and General Workers' Union.
Q1 Chairman:
Sir Rod, you are most warmly welcome.
We did think that you were trying to give us the cold shoulder, so we
are delighted to see you in person.
Tell me, did you want to say something first or may we go straight to
questions?
Sir Rod Eddington: Just a couple
of initial comments. Chairman, thank
you for that welcome. I do not have the
courage to give you the cold shoulder.
I was always keen to come back and appear before this Committee once my
work had been presented and I am grateful to you for accommodating my
long-distance travel schedule. Just a
few brief comments, if I could, and then the all-important questions from the
Committee. I tried hard through this
piece of work to look at the links between transport and the economy,
particularly as it relates to productivity and growth, recognising that
governments, when they take decisions around transport, also reflect on the
environment and social inclusion. As
good fortune would have it, at the beginning of my journey I was very keen to
tap into the thinking that experienced transport economists in this country
have to bring to bear on the subject and I got Professor Sir Nicholas Stern to
chair that group, as you know, and that ensured for me that I was right up to
speed with his thinking, particularly in terms of the sustainability issues as
they relate to transport. That, for me,
was an important part of this journey.
I tried through my piece of work to be modally agnostic, by that I meant
I was looking at the links between transport and the economy through the broad
lens of the economy rather than through the lens of a particular mode. Modes are critical to delivery, but that was
not the starting point for me. I
presented my work, as you know, and I am keen that it finds substance with the
key stakeholders, and I will do all I can to support that. Over to you, Chairman, I am happy to take
questions.
Q2 Chairman:
I must say, Sir Rod, if you will forgive me for saying so, being modally
agnostic sounds astonishingly uncomfortable, but I am sure that you survived
this. I would like to ask you some
general questions really. Are you proud
of this study?
Sir Rod Eddington: I am happy
with it. It was a substantial piece of
work and I was very keen that it was strongly evidentially led, that I spent as
much time around the UK talking to as many of the key stakeholders as possible
- freight and passenger associations, NGOs, local and regional governments,
passengers, freight operators, business chambers - and I feel, for me, the
report reflects their substantial input into the work.
Q3 Chairman:
Did it hit all the objectives that you set yourself?
Sir Rod Eddington: Yes, it did
indeed.
Q4 Chairman:
Why have you given the subtitle, The Case
for Action, to your executive summary?
There is really little in the way of direct proposals, you have not
given any timetables for implementation.
Sir Rod Eddington: Chairman, I
am clear that advisers advise and governments act and decide, but I guess I
have chosen that as a subtitle because it is clear to me that transport is
critical to the economy, it is also clear to me that if we do not make the
right investments in transport that the economy will suffer, to say nothing of
the frustration that individuals face every day as they go about their daily
lives. This is a call for action and,
in a sense, that is one of the reasons why I took a bit longer on this than I
had originally anticipated. Section 4
of my report talked to some of the key issues on delivery because I felt if I
did not address some of the delivery issues that ideas would not necessarily be
turned into activity.
Q5 Chairman: That addresses a point which concerns
me. You have talked about the broad
lens of an economic view but, frankly, what concerns me is that it looks as
though - and I hope you are going to give me your view on this - you started
off writing a report which was about economics in transport and then halfway
through you decided it ought to be on the economics and environment in
transport. Is that wrong?
Sir Rod Eddington: I had always
taken the view, Chairman, that the environmental piece was critical. I wrote a public piece in January 2005, when
I was still at British Airways, saying that aviation absolutely had to take the
environmental challenge seriously and proposed that, on balance, I supported an
emissions trading scheme and aviation's participation in that. That was at the beginning of 2005 and, as
you can imagine, it did not necessarily meet with universal acclaim amongst my
opposite numbers in other parts of the world, but I have always taken the view
that the environmental dimension is important.
Having said that, the links between transport and the environment is a
big issue and I could not do it justice in the context of the time and
resources I had, so I recognised that the environment was important and having
Sir Nick Stern as chairman of my academic friends group helped me weave that
in.
Q6 Chairman:
Could I ask you about that, sorry to interrupt, but when did your friends of
the academic world appear, at what point?
How long had you been working on the report?
Sir Rod Eddington: I started
----
Q7 Chairman:
But you did not mention him yourself?
Sir Rod Eddington: I started
this journey when I was asked to do this piece of work by the Chancellor of the
Exchequer and the then Secretary of State for Transport, Alistair Darling, in
March 2005 and I used the next few months to prepare the ground, so that when I
retired from BA I could be on it full‑time for several months, which I
was. One of the things I did as
background for myself through that was to look at some of the history, as it
were, to the debate. One of the things I
looked at was the presentations made to this Committee in January 2005 on road
pricing and listening to people like Peter Mackie, Stephen
Glaister and people like that talking about road pricing which convinced me
that not just on the issue of road pricing but across a much broader church it
was important to try and get a group of senior transport economists together to
pressure-test some of my own thinking.
I got them together pretty much at the beginning of this journey and
asked Nick Stern to chair that long before he was asked to lead the work on
climate change.
Q8 Chairman:
That brings me pretty well to the next bit.
Your conclusions are entirely dependent on the robustness of your
assumptions and your cost‑benefit models.
Sir Rod Eddington: Yes.
Q9 Chairman:
Are you, in fact, sure these are robust enough?
Sir Rod Eddington: I am
absolutely confident that they are based on the best data available to me at
the point at which the work was done, Chairman. There are some issues in there, for example what price of carbon
do we assume in the context of this piece of work. I used the best thinking from Defra available at the time. I recognise that you can challenge the
number I have used and put forward other numbers, but I was very clear about
what assumptions I had made on which to base that work and I recognise that
some of these things will evolve as we move forward, but I hope the paper trail
is clear.
Q10 Chairman:
Does "evolve" mean "change"?
Sir Rod Eddington: Yes, I think
for some of these issues we are only just beginning to understand them and
their force. Some of them are well
established.
Q11 Chairman:
Forgive me, you have given welfare and environmental factors, in effect, a
monetary value.
Sir Rod Eddington: Yes.
Q12 Chairman:
That is the way you have done it. How
did you work out what was the monetary value of welfare?
Sir Rod Eddington: Again, I used
the best information available to me.
Q13 Chairman:
From?
Sir Rod Eddington: From the
Government, and I recognise that in doing so I made assumptions which may well
change in the fullness of time.
Q14 Chairman:
Would those be, in effect, political, with a small "p", rather than economic?
Sir Rod Eddington: I hope
not. In looking to quantify things I
think you need to try and do just that.
Clearly, quantifying some of these things is a challenge but,
nevertheless, it is a challenge we have to meet.
Q15 Chairman:
Forgive me, but if your figures and models are not correct, if they are not
toughly balanced and checked against what you know from other sources, then
most of your work becomes nonsense, it becomes highfaluting nonsense.
Sir Rod Eddington: I think there
are some things which you can be very certain about because we understand them
from a long period of time. For
instance, let us take the congestion debate.
We know the number of cars on the road today and the distance they
drive, and we can track that back every year for the last 40 years; similarly,
we can track back how much road capacity there has been in the UK over the last
50 years, so some of this stuff has a robustness.
Q16 Chairman:
But welfare?
Sir Rod Eddington: Other things
are more difficult to quantify, but not to try and quantify them is to base
decisions on anecdote rather than on facts.
I am happy to have those numbers challenged and they may well evolve,
and I have been quite open about where the data comes from, not just in the
written report but in the many pages of on‑line data which support it.
Q17 Chairman:
You do not think your economic remit was too limited?
Sir Rod Eddington: I think it is
important to understand the links between transport and the economy, and I do
not think historically we have done that very well. I recognise that there are other things that governments take
into consideration when they take decisions on transport, and welfare, social
inclusion and the environment are uppermost amongst them, but they are major
issues in their own right. As I said in
the context of the work I did, I could not do a thorough job of including those
issues.
Q18 Mrs Ellman:
Sir Rod, your report has been criticised for being unimaginative. Is that because you were warned off
advocating any proposals that would cost a lot of money?
Sir Rod Eddington: I do not
think it is unimaginative. I think in
focusing on things like the importance of cities and their surrounding areas,
regions, the importance of intercity links and our international gateways, I
have provided a focus which we have not seen in the past. If some people find my conclusions unimaginative,
that is a matter for them but it raises a whole series of issues, including on
the all-important delivery side. By
getting into issues like planning national and sub-national governance I think
I have taken the transport debate to areas where it has not traditionally been
based.
Q19 Mrs Ellman:
You seem to dismiss the possibility of a high speed north‑south rail link
very easily. Was it suggested to you
that proposal would not be welcomed by Government?
Sir Rod Eddington: My decision
to talk about projects which have very limited economic backup was nothing to
do with any discussions with Government.
As a businessman, I looked hard for the evidence which supported
particular corridors and I was particularly keen not to embrace solutions
looking for problems. Rail is a very
important part of the infrastructure in this country, and if you think of the
three major priorities I have set, heavy rail is an important piece of all of
them. That does not mean to say any
particular solution which is put forward without a strong business case to back
it up is something I would embrace. As
I say, I tried to be modally agnostic.
Q20 Mrs Ellman:
I did not ask you if you had discussions with Government, I said had it
indicated that certain things were not acceptable.
Sir Rod Eddington: Absolutely,
not at all.
Q21 Mrs Ellman:
At all stages you felt entirely free to come forward with any proposals?
Sir Rod Eddington: I absolutely
did. One of the great advantages of not
being paid for this piece of work was that I felt it liberated me to say what I
thought.
Q22 Mrs Ellman:
Do you think that if people in the past had adopted your approach there would
never have been railways built nationally?
Sir Rod Eddington: I have no
doubt, because in our most densely-packed corridors heavy rail is, without
doubt, the best solution.
Q23 Mrs Ellman:
Would this ever have happened in the past if people had adopted your way of
thinking and not wanted to have any imagination?
Sir Rod Eddington: No, I would
absolutely reject the view that I have no imagination. The rail network in this country was built
by private enterprise, by people who had a vision for improving the lot of
national folk, and I support that entirely.
Q24 Mrs Ellman:
Would you say your report shows vision or rather a very cautious, piecemeal
look at the situation?
Sir Rod Eddington: Vision
without sound backup, in my experience, is not worth very much. Vision that does not stand the test of time
and challenge is no more than a vision.
I am very interested in vision, but vision that can be supported, and I
am particularly keen not to pursue solutions looking for a problem.
Q25 Mrs Ellman:
You seem to be very strongly committed to road pricing as the major solution,
if not a major solution, but you seem to be dismissive of the problems that
stand in the way of going forward with that.
Why have you taken that forward?
Sir Rod Eddington: Again, I do
not accept that. There are a couple of
paragraphs in my piece of work that talk about the challenges which come with
the implementation of road pricing, in particular the way in which a road
pricing regime needs to be understood against the context of the other charges
that motorists face, so I recognise it is a challenging issue and my report is
about a lot more than road pricing.
Road pricing is but a small piece of it. It might be one of the more newsworthy pieces but it is only a
small piece.
Q26 Mrs Ellman:
Let me stop you at that point. What I
want to focus on is the way you have worded statements about road pricing and
in your report you repeatedly come back to that as the major way forward. You refer to problems that have to be dealt
with as though you have not taken the problems very seriously?
Sir Rod Eddington: I do not
regard it as a major way forward, the major way forward for this country is to
make the right investment in the key transport links. Road pricing is a small piece of the big picture. It may well be the bit that is most
interesting in the general debate but the major priority in my work is not road
pricing, it is focusing on the key transport links and their importance to the
economy of this country.
Q27 Mrs Ellman:
You refer in your report a lot to dealing immediately with areas where there is
congestion and where land and other values are handled. Does that mean that you are not looking
forward and concentrating solely on the present, you do not have an imagination
that takes you forward?
Sir Rod Eddington: In any
environment in which resources are limited the question becomes where do we
best spend the money we intend to invest.
My response to that question is very simple, start by looking at the
centres of the economy which generate growth today and where congestion is a
significant problem, because that is of the first order, a good guide to where
the greatest challenges lie. That was
one of the things in the service economy that led me to a view about cities and
their catchment areas, intercity links and international gateways. That is where the vast majority of people
create economic wealth in this country and, therefore, that is the piece of the
economic jigsaw that is most important.
Q28 Mrs Ellman:
You also referred to surface access to ports when you were talking about port
development. Does that mean, again, you
would be looking solely at where there are congestion issues at this moment and
would you be looking at port development as part of regional economic growth?
Sir Rod Eddington: My work looks
at 2015 and beyond, 2015-2030, and by definition you have to make some
assumptions about economic growth, about key parts of our transport
infrastructure, where there is congestion today and where we anticipate
congestion tomorrow. In looking at the
issue of port capacity I have tried to look forward in that way, but I have
also looked at the all-important surface access to ports, the road and rail
issues which were raised with me as I went around the country looking at the
ports. It was one of the first issues
that was raised, whether it was at Bristol, Liverpool or Teesside, these are
issues which most port operators raised with me.
Q29 Mr Scott:
Sir Rod, you suggest major changes to governance and decision-making in the
transport area. Could you provide an
overview of the structure you propose?
Sir Rod Eddington: My starter on
this is that we need a transport strategy and, having got a transport strategy,
we can then think about how the individual modes deliver to that transport
strategy. Clearly, in the context of
the work I have done I have recognised that in developing a transport strategy
governments must be minded of more than the economics and I have talked about
some of the other things that matter, so it seems to me it is for Government to
create a framework in which its transport strategy can be delivered. For that transport strategy there are people
in this room who will contribute to the thinking which sits behind it and,
clearly, the Department for Transport would be a significant party to that as
well. We need a transport strategy and
Government needs to make sure that it is consistent with other major issues,
including our concerns about climate change.
Q30 Mr Scott: What do you think are the major flaws at the
moment of the present system?
Sir Rod Eddington: I think there are a number of things that
should concern us. The first is that we
have historically taken a modal view of transport. We have thought about transport in its modal silos and not
started with, "What is our transport strategy?". One of the reasons I would argue that we do not have great
surface access to our ports or our airports is because we have thought about
our airport strategy and not about an integrated transport strategy. There has been a lot of talk about
integrated transport in the past but my observations are that we have not done
much about it. Secondly, my concern
about the current system is that I think some of the delivery issues get in the
way of sensible decision-making and its implementation. The issues of national and sub-national
governance I think are critical issues.
What say do local authorities or regional authorities have in their own
transport needs? Does the planning
process today give us some certainty as to whether it is a yes or a no as we go
into delivering transport infrastructure?
There is a range of challenges from where we sit today.
Q31 Mr Scott: Is it not possible that a proposed future
structure could be more complicated than the structure we already have?
Sir Rod Eddington: In some ways it is bound to be more
complicated, if only because when we talked about transport infrastructure in
the past we did not have to reflect on climate change. We talked about delivering transport
infrastructure so we could create wealth so people could go about their
lives. We now recognise that transport
contributes globally something like 15 per cent of emissions and in the UK 25
per cent of emissions, so when we think about transport today we need to think
about the environment. We have no
choice but to embrace that. The trick
is, I think, to think through a strategy that works for transport and takes the
right account of these other issues.
Q32 Mr Scott: You suggest that large-scale investment
projects should be funded through a separate mechanism. Why is that?
Sir Rod Eddington: The question of how we fund large-scale
projects is one that will be familiar to many of you, the question of what is
the role of Government and taxpayer-provided funds and what is the role of the
private sector. Historically much of
our transport infrastructure has been funded by government and I am clear that
there is a strong role for government in the future funding of transport
infrastructure, but I am also clear that in some areas now the private sector
makes an important contribution. Ports
are a good example. Many of our ports
in the UK are in private hands and it is for government to decide what role it
wants private sector capital to play in our transport infrastructure. It is government that provides the
guidelines for public private partnerships.
My point would be simply this, that in a world in which government
spending is constrained will we get better transport infrastructure if we are
able to have a significant contribution from the private sector, or in some
cases if it can be done by the private sector alone, but again only government
can decide what role it wants a partnership to play and when.
Q33 Mr Scott: Can you give us some views on London
particularly and how we can get London moving, how we can keep London working?
Sir Rod Eddington: Eighty per cent plus of the UK GDP is
services. Eighty per cent plus of
employment in this country is services.
That is not to underestimate the importance of agriculture or precision
engineering, but the UK has a very strong competitive services sector and
London today, I would argue, is unquestionably the global financial
centre. That was a battle it had with
New York and my American friends tell me that thanks to Sarbanes-Oxley London
has now comfortably won that battle. I
would argue that London has substantial strengths beyond the challenges that
Sarbanes-Oxley delivered to New York but the bottom line is that London is the
global financial centre and that is of great benefit to the UK. I was very keen that my report not be about
the south east of England and ignore the rest of the country. The three priority links I talk about are as
true in Newcastle as they are in London but the bottom line is that London is
the greatest creator of economic wealth in the United Kingdom and we diminish
it at our peril. It has the worst
congestion problems. There are bad
congestion problems in other parts of the UK but London has the greatest
congestion challenges.
Q34 Chairman: So that is where we are but he asked you
where we are going.
Sir Rod Eddington: I do not know whether you are asking me with
a mind to a discussion on Crossrail and that is an issue that is regularly
raised with me, as you would expect. I
did not look at Crossrail; I was not asked to look at Crossrail. That is about here and now and I am looking
at 2015 and beyond. Having given you
that health warning let me give you my view about Crossrail. Crossrail is an extremely expensive piece of
transport infrastructure but there is a business case for it and it addresses
some major congestion challenges in the economic capital of the nation. There is no get-out-of-jail-free card. If Crossrail does not go ahead London will
continue to have enormous congestion challenges and they will need to be met in
some shape or form. There is a strong
case for significant investment in transport infrastructure in London but we
know it is extremely expensive to retrofit, particularly heavy rail transport
infrastructure in London. That does not
mean to say that it should not be done and if we do not go ahead with Crossrail
we still have to do some substantial things to address London's congestion
challenges.
Q35 Mr Clelland: Sir Rod, when you talk about the UK's
economic success and the importance of transport infrastructure to that, did
you also take into account the importance of transport infrastructure to the
regions outside of London or is it sufficient just to have a successful national
economy regardless of what might happen to the regions?
Sir Rod Eddington: No.
Through my journey I and my team visited all the regions and the
devolved areas of the UK. I personally
went to Birmingham, Manchester, Newcastle, Bristol, Cardiff, Newport,
Warrington, Liverpool, Southampton, Edinburgh, Glasgow -----
Q36 Chairman: You missed out Crewe.
Sir Rod Eddington: I thought you would brief me on that,
Chairman. I got around the country in a
substantial way, speaking to key stakeholders in all places, and I take the
view that the conclusions I have drawn are as valid in the north of the UK as
they are in the south.
Q37 Mr Clelland: Did you carry out a full-scale assessment of
the costs and benefits of a high-speed rail connection between London and Edinburgh?
Sir Rod Eddington: I am regularly asked for a full-scale
review. I have to say that "high-speed"
means different things to different people.
To some people it means Maglev; to some people it means TGV; to some
people it means conventional rail at 140 miles an hour; to some people it means
125 miles an hour. I had presentations
from a number of entities on the question of high-speed rail, yes.
Q38 Mr Clelland: But they are not calculations that are
publicly available which could prove the case?
Sir Rod Eddington: No, they are not. If you take Maglev, for instance, the fact is that Maglev
technology, although it operates from Pudong Airport in Shanghai to downtown
Pudong, and I have travelled on it a number of times, this is not a technology
that is in use anywhere else to any substantial degree and I would always be
cautious about embracing technology that is unproven on the sort of scale that
is being suggested in this instance.
Q39 Mr Clelland: But does that not come back to the point made
by Mrs Ellman before that the report is not particularly aspirational?
Sir Rod Eddington: I do not think there is anything aspirational
about spending £40 billion on leading edge technology that may or may not
work. I do not regard that as
aspirational. If you are going to spend
£40 billion on the British Rail network is that the best place to spend it or
would you not be better off spending a big chunk on Crossrail and a substantial
chunk improving the commuter networks around our major cities in the UK?
Q40 Mr Clelland: We were rather hoping your report might
answer these questions but it does not appear that it has. It has just raised more questions.
Sir Rod Eddington: I think it has. My position is quite clear, that high-speed rail with unproven
technology and with dubious economic benefits is not something we should be
spending £30-40 billion on. I was quite
clear on that.
Q41 Mr Clelland: Can I just draw attention to another point in
your report which I thought rather curious?
In talking about road pricing you talked about the effects of road
pricing and how that might affect urban rail services, and your solution to the
problem that would arise in terms of congestion on the railways as a result of
road pricing, that is, people leaving their cars and getting on the trains,
would be to manage demand on the trains by putting the prices up on urban
trains. Is that a sensible way forward?
Sir Rod Eddington: As my report makes clear, there is a demand
for substantial investment in transport infrastructure. Given the three priority areas for
investment, clearly heavy rail has a critical role to play in all three. There are many projects and schemes out
there for investment in the rail network, which makes very strong economic
sense, the first of which is making best use of what we have at the
moment. As you go round the country
there are many examples of parts of the current rail network where additional
investment would give us very strong returns, so I see rail as a critical part
of the solution going forward; there is no doubt about that.
Q42 Mr Clelland: Yes, but you seem to be saying that we
introduced road pricing in order to try and resolve congestion on the roads,
thereby forcing people out of their cars onto some other form of public
transport. That then makes that form of
public transport more congested and therefore, in order to resolve that
problem, you put the price sup on public transport.
Sir Rod Eddington: One of the problems with this debate, I
think, is that it assumes that the only solution to public transport is
rail. In section four I spent a lot of
time talking about the way in which we use buses in the UK because in many
parts of the UK the traffic densities would make it very difficult to justify
building a heavy rail network and buses are a critical part of the
solution. It is not just about rail
although I see a strong case for investment in the rail network as well. Saying I do not support speculative
investment in a high-speed rail network that may or may not work does not mean
that I do not support investment in rail in the United Kingdom; quite the
opposite.
Q43 Mr Clelland: Absolutely.
The point I am trying to make is that you seem to be saying that we
should force people out of their cars by introducing road pricing in order to
resolve congestion, and that may be a way forward that we cannot evaluate, but
then they turn to public transport, like for instance the urban rail
networks. You then suggest that that
would put such pressure on those networks that the only way to deal with that
would be to put the prices up on the trains so that not so many people used the
trains. Where is that going to leave
the commuter?
Sir Rod Eddington: If the only form of public transport is rail,
but there are many forms of public transport, in particular buses. I would argue that whether we invest in more
rail infrastructure or in buses is something that should be taken on a
case-by-case basis.
Q44 Chairman: Did you actually ask for a cost-benefit model
or some very accurate figures about high-speed rail from either the Treasury or
the DfT?
Sir Rod Eddington: I asked everybody, Chairman.
Q45 Chairman: What did they say?
Sir Rod Eddington: Including the people who came to me with the
suggestion that we should build Maglev from one end of the country to the other.
Q46 Chairman: And?
Sir Rod Eddington: I think it is fair to say that the economic
benefits are fuzzy.
Q47 Chairman: That is a very nice adjective; the world is
full of fuzzy things. You had got very
precise models that you could judge were not economically viable - is that what
you are saying?
Sir Rod Eddington: All the data that I got led me to the
conclusion that there is no business case for the speculative end of high-speed
rail.
Q48 Chairman: But that was specifically as long as it was
Maglev, or not so?
Sir Rod Eddington: Yes, Maglev.
Q49 Chairman: So you are tied to the Maglev scheme and the
figures for that and you did not look at any alternative for a high-speed line?
Sir Rod Eddington: I did not but my mechanism suggests that any
high-speed line proposal that was put forward should be measured against the
criteria I am suggesting.
Q50 Chairman: And you are suggesting that that would mean
that they were fuzzy?
Sir Rod Eddington: No.
The Maglev piece was fuzzy.
Q51 Chairman: The Maglev bit was fuzzy?
Sir Rod Eddington: Correct.
Q52 Chairman: So you dismissed the whole business case but
only on the basis that the Maglev bit was fuzzy?
Sir Rod Eddington: That is what I dismissed. I dismissed Maglev.
Q53 Mr Clelland: But you have no definitive evidence to
dismiss Maglev? It is just a feeling, a
fuzzy feeling?
Sir Rod Eddington: I have got plenty of evidence. The most powerful evidence to dismiss Maglev
is that it does not work anywhere in the world. The bottom line is that it works from Pudong Airport to
Pudong. That is a relatively small
stretch. It is not even to downtown
Shanghai; it is to Pudong.
Q54 Chairman: The Japanese are spending a very great deal
of money and this Committee actually rode on their experimental service. Do they strike you as being a wildly
speculative nation?
Sir Rod Eddington: I think the Shinkansen, which was introduced
into service in 1964 in Tokyo, is a very good form of train in the corridors
where it makes good sense, and when I lived in Japan for four years I was a
regular user of the Shinkansen. I also
know that the economic case for the Shinkansen is strongest in the
Tokyo/Nagoya/Osaka/Fukuoka corridor but makes no sense to Niigata where it was
built by the then Prime Minister Tanaka to make a political goal.
Q55 Chairman: That is a very interesting parallel
argument. I was asking you something
else. The Japanese are consistently
spending a very great deal of their very considerable research budget on a specific
Maglev development which has also enabled them to run a test mileage. It is only 21 miles but this Committee have
actually ridden on it, apart from the fact that it put the fear of God into
me. What I am asking you is, did you
look very closely at those other sources and why do you think the Japanese are
doing that if it is so manifestly unworkable?
Sir Rod Eddington: I think if the Japanese manufacturers can
produce a Maglev-type train that makes good sense and it is right for the UK we
should embrace it. However, if the
Japanese - and not having been with you, with respect, Chairman, I cannot
comment on this - are suggesting to you that they are going to build this
network across the country before the technology is proven, that in my
experience is most unlike the Japanese.
Chairman: I do not think I said that.
Q56 Mr Martlew: Obviously, the Japanese have this operating
but the fact is that they are not putting it in from Shanghai to Beijing, are
they? They have turned that down and I
accept the argument, but you seem to view Maglev as a red herring virtually,
and that was not in the majority of serious politicians' discussions about
high-speed rail in this country. You
seem to have brushed high-speed away on that particular criterion of the Maglev
and that worries me.
Sir Rod Eddington: No.
Q57 Mr Martlew: Are you saying that you have not brushed
high-speed away?
Sir Rod Eddington: No, I have not.
Q58 Mr Martlew: Oh, that is good.
Sir Rod Eddington: What I have brushed aside is speculative
technology like Maglev from one end of the country to the other. In providing a set of criteria against which
I think investment decisions should be made I have been generally modally
agnostic and my observation is that in the densest corridors high-speed rail is
a critical part of transport infrastructure.
Q59 Mr Martlew: I accept, and I have read your report, that
you were misquoted by the media to some extent - we all are. My concern is this. You are talking about 2014 and beyond. I know the West Coast Main Line probably as
well as any politician and they talk about longer trains, longer platforms,
perhaps better signalling so you can get more on. They should all be done by 2014, should they not?
Sir Rod Eddington: Absolutely.
Q60 Mr Martlew: But you have not given us anything for the
future beyond that, have you?
Sir Rod Eddington: What I have not done is give you a list of
projects. I tried to build a transport
strategy and talk about what the priorities are because to give you a list of
projects would have taken a lot more time than I had. What I tried to do was provide a set of criteria against what
future projects could be based on. I
made the observation, given the timescales (and you are right to talk about
them), that making best use of existing infrastructure is essential to getting
us where we need to go but by itself it is not enough, that we will need to
make what I describe as some substantial investments to ensure that we can meet
the transport needs of the country beyond 2015. I was quite clear about that.
Q61 Mr Martlew: So you accept that the things that we have
both been talking about should be done by 2015?
Sir Rod Eddington: Yes.
Q62 Chairman: I think the National Audit Commission said
that by that time the West Coast Main Line would be full to capacity.
Sir Rod Eddington: Yes.
Q63 Mr Martlew: If we are talking about a high-speed rail of
any sort, whether it is from north to south, whether it goes to Glasgow,
Edinburgh or just Manchester or Newcastle, then the planning has to start now,
has it not?
Sir Rod Eddington: I agree.
We are looking at very long lead times.
If you agree a transport strategy, and that needs to be pressure-tested,
advisers advise and governments decide, so the Government should decide whether
it accepts my findings or not, and if it can therefore deliver a transport
strategy we then need to think about what it means in the most congested
corridors and what is the best modal solution.
Q64 Mr Martlew: Really what you are saying is that high-speed
rail fits that particular bill. You may
not be in favour of Maglev but high-speed rail will fit that bill in those
corridors that you have referred to?
Sir Rod Eddington: There is no doubt to me that in the most
congested corridors - and you have spoken of them and, as you said, is it
London/Birmingham/Manchester or is it London/Birmingham/Manchester and beyond -
there should be a strong business case for trains in those corridors. That business case will live or die based on
its strength in my judgment, and when I talk about investing in success I am
talking about investing in places where the congestion charges are greatest,
whether it is road or rail or port or airport.
Q65 Mr Martlew: Can I just change back to something that Mrs
Ellman said before, and I think you answered it, but we are always looking for
conspiracy theories as politicians? Did
ministers or senior civil servants who were not in your immediate team propose
major changes to your report at any stage?
Sir Rod Eddington: No, they did not.
Q66 Mr Martlew: They did not?
Sir Rod Eddington: No.
Q67 Mr Martlew: How many major drafts of the report did you
have?
Sir Rod Eddington: I began the evidence gathering in earnest in
late September/early October. I did
some of it before that but I was full time on it in October, November,
December, and I began to assemble my thoughts early in the New Year. I guess I had two or three drafts in the way
in which you do when you do a piece of work like this, and they were not really
drafts; they were collections of thoughts in different areas. I did not really do a draft report and then
a second draft report and a third draft report. The document evolved as we went along.
Q68 Mr Martlew: And there were no major changes in that,
nothing that was cut out that we would be interested in?
Sir Rod Eddington: Nothing that was cut out. One of the things I tried very hard to do
was not to jump to conclusions too early in the piece because I think once you
reach a conclusion you cease to sift the evidence. I was taking evidence and going back to some of the people who
presented it to me and, as it were, asking them to contribute more thinking to
the particular piece I was interested in well into spring and early summer last
year, so the thinking evolved. In
particular, as it became clear that issues like planning and sub-national
governance were important, I did quite a bit of work on those issues in the
middle of last year, so parts of the document really only came together late in
the day; other parts earlier in the day.
Q69 Mr Martlew: And there was no particular significance in
the fact that your report was delayed about six months? It was not ministers asking you to hold it
back?
Sir Rod Eddington: No.
In fact, that is a good point. I
asked for more time and I asked for more time because I wished to complete
section four of the report, which was to look at planning. We spent quite a bit of time thinking about
the planning process and how it relates to major transport infrastructure
projects, national and sub-national governance, buses, in particular what are
the different models for bus ownership and operation, what works best. Those sorts of things really only came
together for me through the summer of last year. When I went into this report I did not think, to be frank, that I
was going to be tackling those issues in the detail I did but the longer I went
into it the more I thought the delivery issues were a critical part of the
report and to ignore the delivery issues would have been to short-change the
report. I asked for more time.
Q70 Graham Stringer: I take it you are being intellectually
rigorous when you say you did not have any preconceived ideas. You have been in transport all your
life. You must be full of conceptions,
preconceived and current.
Sir Rod Eddington: Yes.
Q71 Graham Stringer: Which preconceived ideas did you change most
during this process? On what did you go
in thinking, "Oh, yes, that is what I think would be better for the UK economy
in transport terms", and come out thinking, "No, that is rubbish"?
Sir Rod Eddington: I guess one of the things that changed as I
was going in, which began late in my time at BA, was this realisation that the
environmental and sustainability challenges were going to be substantial for
transport as a whole, not just for aviation.
I was conscious that they were challenges for aviation, hence the piece
I wrote in early 2005, but it became clear to me that for all those the issue
of carbon intensity was going to be an increasingly important part of the
discussion and that my view was that coming out with a report (in part helped
by Nick Stern, who was terrific and whose mind was in very much the same place
as mine) which recommended that all transport modes should pay their
environmental costs, in fact all their external costs, was important. What that does is that if you are looking at
particular corridors and particular modes that will ultimately skew the
outcome. If you take into account the
environment as well as other economic issues it may well mean that you embrace
different solutions than the solutions you would embrace in a world in which
carbon had no cost, so I think my thinking on that issue changed as I was going
into this report, but as I went through it became increasingly clear that it
was an issue. When you talk to the
Japanese car makers about the research they are doing on the motor car of the
future, when you talk about the way in which people look at ships or trains or
planes, the carbon issue has become a big issue. I think the other big surprise I had going in, and you could say
that I should not have been surprised, I should have known, was the degree to
which we thought modally about transport and never thought about the coming
together of the different transport links at ports and airports
particularly. That for me was a very
big issue.
Q72 Graham Stringer: That is interesting. Economists generally cannot tell us what is
going to happen in the next quarter, can they?
Stern is an economist telling us what will happen in 50 years'
time. Why should we take it seriously?
Sir Rod Eddington: I think if Nick Stern was here himself he
would basically agree that it is very difficult to see that far out into the
future in detail and I think he has tried to cover that in his report by giving
us a range of options - what impact will greenhouse gases have on global
temperatures, what impact will increases in global temperatures have on the
global climate and therefore the global economy. I think what he has done is begin the debate about the links
between the climate and the economy, which is a critical document. As we discover more about the global climate
and its impact on the economy I am sure we will be able to refine (as we can
with any report) some of our thinking as we go along, but I think Nick's work
is terrific because it says there is a link, we do have to take it seriously
and importantly. There are two main
takeaways from his work. One is that
the price of acting soon is lower than the price of acting late, but the first
is that if we are smart we can be pro-growth and pro-the environment at the
same time, and I take those two things as very important contributions.
Q73 Graham Stringer: In terms of the overall report, if you look
at what has happened in transport in this country, there have been no new
runways in the south east for 70 years, motorway densities are 50 per cent of
most of our European competitors, deep sea ports are not linked up to the main
motorway systems transport very well, are in the wrong places in many cases and
beginning to lack capacity, and our rail passengers on main routes are going at
half the speed that they go in France, Germany, Korea, Japan and other parts of
the world. Your solution to this
under-investment is to make what we have got work a bit better. I am slightly disappointed. I found the report interesting but I
expected a bit more than just going with the grain of government policy that we
have to make what we have got work better.
Is that unfair?
Sir Rod Eddington: I have made the point, and I make it again,
that I recognise, given the timescales I am looking at, that making what we
have work better is by itself not enough.
I make the point several times in the report that we will need to look
for significant investments in major projects, and making the right decisions
on what those projects are will be critical to the British economy, and how
many projects we are able to do in part will be dependent upon the extent to
which public funds are available on the one hand and the Government is prepared
to embrace private capital in some of these sectors on the other because you
know much better than I do that the claims on the public purse are
substantial. My point is simply this,
that there is no silver bullet to meet the under-investment that you have
spoken about in our transport network.
It would be great if there was a silver bullet. There is not. We need to invest on a whole range of fronts to make the best use
of what we do and then we need to look at what major infrastructure projects
beyond that we embrace to make sure our transport network works better.
Q74 Graham Stringer: I suppose that is what I think is a cop-out. I think it is relatively easy to say we need
to make the system work better, and the Treasury and the Department for
Transport would welcome that recommendation, but then you rely on saying, "We
do not want to really go for aspirational projects. We want to have good-cost benefit analysis, and of course we do
not want to waste money". Louise gave
the example before of the railways. Two
cases I know very well. The Manchester
Ship Canal, which changed the economy of the north west dramatically, would
never have been built if you had done a cost-benefit analysis. Manchester Airport would never have been
built if you had done a cost-benefit analysis.
It did not make a profit for its first 40 years of operation. There is nothing in your report that really
understands that. It is very
static. It does not say how we are can
change the shape of the economy, which demands more and more investment, where
we have got people at the present time.
Sir Rod Eddington: I would argue that that is not right, but that
by saying we need to look at cities and their catchment areas, the inner city
mix and international gateways, we will be focusing our spending on the very
areas that make a real difference, and that one of the challenges we have is
that historically transport spend has been spread across the country so we have
invested not enough in some areas and we may well have over-invested in others.
Q75 Graham Stringer: I accept that, but if you look at the most
disadvantaged region in terms of transport spend, which is around Bolton and
Grimsby when you look at the spend per capita, there is nothing in your report
that I have found that says, "Yes, we have got a problem here. We will increase capacity where the problems
are, but if we can move economic activity to Hull or to Newcastle or wherever
else we will solve two problems". I
suppose it fits in with the Treasury analysis: it is anti a regional policy at
the bottom of your report.
Sir Rod Eddington: I do not believe it is because if you talk to
people in the Northern Way or you go to places like Nottingham and Leicester
and Derby and talk to them about their challenges, they have regional
challenges and transport is a critical piece of that jigsaw but it is not the
right solution in every place. I spent
some time in the Black Country where the solution is not necessarily a
transport solution; it may be a schools solution. There are parts of the UK where transport spend is the best thing
we can do to promote economic growth.
There are other parts of the UK where transport spend has very little
impact on the economy, and, by the way, if you are looking for transformation
of the economy there have been periods in our history where transport spend has
delivered economic transformation, and you have talked about the building of
the canal network. Nick Crafts, who was
part of my academic friends group, had some very interesting things to say
about that: the building of the railway networks in the 19th
century, the building of the road and airport networks in the 20th
century. These were all fundamental to
the recalibration of the British economy but that does not mean to say that the
next transformation in this country is going to be transport driven. It might be national investment in
broadband, it might be something other than transport, so my view is that
transport is a key enabler and it is sometimes the most important piece of the
jigsaw but it is not always the most important piece of the jigsaw. I admire the transformational impacts of
previous transport innovations but not all our innovations in transport have
been transformational. Some of them
have been, to be frank, a waste of taxpayers' money, so I would be keen that
where we invest we invest in the right areas.
You only need to look at the business case returns to see that there are
a substantial number of projects which are crying out for investment and
enablers.
Q76 Graham Stringer: I agree with that; nobody wants to waste
money, but there are never foolproof methods of making decisions either in the
business world or in the public sector.
Who then should take those decisions?
The other thing that worried me about the report was that it did not
seem to be dynamic enough in changing the economy, but, recognising that there
are inefficiencies in the planning process, which you do, and I agree with
that, it seems to me that you are writing local elected politicians out of that
process and maybe even central politicians.
You seem to be saying that if there is a business case to be made some
independent panel should make those decisions.
I am not sure that people independent of the political process are
better than people who are elected to make those decisions.
Sir Rod Eddington: I am very clear that that is not what I am
saying. Let me make a number of
observations. The first is that the
current planning process in my view, as many people told me as I went on this
journey, is too uncertain, too long, too long-winded and far too expensive. What I am suggesting is that we make some
fundamental changes to the planning process.
I know in making those recommendations that I am going to create a
vigorous debate; I have no doubt about that, and that is why, when people say
to me, "You are not really presenting much in the way of change", I would argue
that I am. I think it is very important
that you put the input of local, regional and national entities in at the right
point in the journey. I feel very
strongly that a change from an adversarial to an inquisitorial system would
basically give people the ability to contribute, whether it is verbally or in
writing, without the need to rely on very expensive legal advice, for
example. I am also clear that by
putting the political process at the beginning of this that there must be the
right consultation. There is a legal
requirement to consult both domestically and in the context of EU law through
Europe, so nobody, least of all I, would try and write out of the planning
process the ability of people at a local and national level to contribute to
whether or not a particular project should go ahead. A project should only be put in front of the Independent Planning
Commission when it has been through a rigorous period of consultation.
Q77 Mrs Ellman: Sir Rod, on this point, what you are saying
is not actually what your report says.
Mr Stringer's question to you is not about enabling people to make a
contribution to a discussion. It is
about who takes the decisions. In your
report (and listed in your recommendations it states this clearly) you talk
about the need for reforms of the planning process for major infrastructure
projects, and the need for "introducing an Independent Planning Commission to
take the final decision on specific applications". That is giving the power of decision-taking to people who are not
elected. You can argue the case for
that but you cannot say you did not say it because you did.
Sir Rod Eddington: No, I did not say that. I said something would only go forward to
the Independent Planning Commission when it had passed through the consultative
and the ministerial processes.
Mrs Ellman: What does that mean?
Q78 Graham Stringer: Is that not putting a quango, a non-elected
body, above the elective process and does it not break the lines of
accountability? If I am the Secretary
of State earning whatever it is, should I not have to take a final decision on
something that is important for this country, or if I am the leader of a major
council should people not have the right if I get the decision wrong to vote me
in or out?
Sir Rod Eddington: But something would only go forward to the
Independent Planning Commission if the Secretary of State was comfortable with
it going forward.
Q79 Graham Stringer: But if it is an Independent Planning
Commission it might come to a different view, and if I as an elector want to
change that I cannot vote in or out that independent person. Democracy has got bad consequences if you
think about runways in the south east, but at the end of the day it is better
to have democracy than runways. What
you seem to be saying is, "Have the runways; we will get rid of democracy",
which I do not agree with.
Sir Rod Eddington: No, I think democracy is critical to
this. All I am saying is that I believe
a better system would be where the Government (and clearly this is going to be
a matter of national debate in Parliament), having satisfied itself that a
particular project is in the national or the local interest, then puts it
forward to the Independent Planning Commission, in other words, having had an
opportunity itself to review a particular project - I am talking about major
transport infrastructure projects here - it then gives the Independent Planning
Commission the opportunity to hear the detail and make a decision on that
basis. Governments do that in other
areas. They ask bodies to take
decisions on their behalf and the sort of people I have in mind who would be
independent commissioners, senior legal people, for example, are the sort of
people whom governments would be prepared to trust with that authority.
Graham Stringer: That is very clear and that is what I
thought. I just disagree.
Q80 Clive Efford: Can I clarify something you said on
Maglev? The technology is there. It has been there for years. We used to have Maglev in this country. Is the problem economic or is there
something else?
Sir Rod Eddington: There used to be a Maglev to Birmingham
Airport, I believe. It no longer
operates. Why?
Q81 Clive Efford: That is what I am asking you.
Sir Rod Eddington: Because the technology is expensive for the
task at hand. If you speak to the
people of Shanghai about Maglev they are terrific pieces of technology but does
it make sense to build a rail network over hundreds of miles based on that
technology? That is the question.
Q82 Clive Efford: Is it an engineering problem or is it an
economic problem or is it a bit of both?
Sir Rod Eddington: It is both.
Q83 Clive Efford: There are problems about the practical
application of Maglev high-speed rail.
I have been in that building in Japan as Maglev has gone past and the
building nearly falls over. It must be
equivalent to standing next to a plane that goes through Mach 1. Going through a built-up area at that pace
Maglev would cause enormous problems.
Sir Rod Eddington: The technology has been around for a very
long time, you are absolutely right, but it is not in widespread use. In fact, it is in extremely limited use and
in some instances where it has been put into use it has been withdrawn. My point would be a more a general one,
coming back to the question here, that you have to look at each country's
geography and economic geography and decide what advantage speed brings to the
table, and what are the costs of increased speed. Increased speed does not come for free. That is true of aeroplanes as well as trains, so what is the
right combination of speed and efficiency for a particular rail network? You can make some judgments about that. That is why I made the observation early on
that a high-speed train means things different things to different people. To some people it means Maglev but there are
many different examples of what the public would call high-speed rail networks
which do not involve Maglev technology.
Q84 Clive Efford: If we were in a position where the Government
was saying, "At any cost we are going to have Maglev", do you think we would
still have it?
Sir Rod Eddington: I do not think so. There is usually great enthusiasm around these projects in their
initial stage. There is then the cold,
hard reality of building them and making them work day in, day out. We know there are some real challenges. Let me give you another, more measured
example. You talk about the West Coast
Main Line and how important that is.
Look at the challenges associated with the upgrade to the West Coast
Main Line, basically moving to moving block signals, a technology which
existed, if you like, but never existed in that context. Look at the time taken to implement that,
look at the costs -----
Q85 Chairman: Sir Rod, I do not want to go down that line
now. I will be quite brutal with you
and I will tell you exactly why, because the decision on that was influenced
largely by decisions taken outside this country. It was an implementation of a policy which was decided at
European high level and, frankly, if we are going to go into that one we will
be here all day, so forgive me. Another
example please.
Sir Rod Eddington: Aviation is a good example.
Q86 Chairman: Better, better.
Sir Rod Eddington: I have worked for British Airways and, like
everyone who works for British Airways, I loved Concorde.
Q87 Chairman: Yes, you are a rotter.
Sir Rod Eddington: Flying at twice the speed of sound is
infinitely more fuel inefficient than flying at 80 per cent of the speed of
sound and requires an entirely different maintenance regime to do it day in,
day out. Speed does not come for
free. My response would be that if you
are going to make huge investments, you have to have some confidence that the
technology is workable and robust, because if we build a substantial piece of
transport infrastructure in this country it has to work day in, day out, every
day, 365 days of the year. It has got
to be easy to operate, easy to maintain, easy to use. My plea is that if we are going to be spending tens of millions
of pounds let us do it in areas where we have some confidence in the
technology, whether it is on trains or another part of our network.
Q88 Clive Efford: Do you have any feeling for how your report
has moved on government thinking on transport policies? Could you give us some examples of how it has
changed their approach?
Sir Rod Eddington: As I said, advisers advise and governments
decide and I know that the Secretary of State for Transport will be formally
telling us how he intends to move it forward.
Certainly within the Department for Transport I think the report has
been taken seriously and they are looking at the way in which they are
organised internally to try and help with the delivery of some of the key
elements.
Clive Efford: That is very precise. On the issue of -----
Q89 Chairman: Before you leave that, Sir Rod, what do you
mean? Frankly, to say they are looking
at reorganisation, this grows out of some gnomic remarks made by Sir David, I
believe. In the Treasury are they also
interested? The Permanent Secretary
said that his successor may wish to consider the structure and organisation
implications arising from your review "before taking up the post
formally". What do you think those
implications are?
Sir Rod Eddington: The way in which the department takes
decisions, the things it looks at, its focus, so I would hope all of those
things would be reflected in a response to my report.
Q90 Chairman: That is fairly general. What does it mean exactly? In what way would they alter? I am sorry but this is important. Interestingly enough to this Committee, you
are talking in perhaps a 30-year cycle and one of the assumptions in everything
you said to Mr Stringer was that there would be political input at the
beginning, those decisions would be agreed and we would then move on to the
technocrats. It is a bit sort of upper
upped but I suppose we cannot win them all.
What is interesting to me is why you assume that that is something that
governments are going to accept when governments work in five-year cycles and
you are talking in 30-year cycles. Do
you really assume that if Mrs Thatcher had agreed to cut down two-thirds of the
railway industry ten years later the new Secretary of State would have said,
"Fine, we are committed to that. We
have handed it over to the bureaucrats"?
Sir Rod Eddington: Just one point. First, I do not see the Independent Planning Commission and the
commissioners as technocrats.
Q91 Chairman: They are not going to be politicians, they
are not going to be technocrats?
Sir Rod Eddington: Well, some of them may be technocrats but I
see them as being eminent people who can take account of all these issues in a
balanced way, high court judges as an example rather than technocrats.
Q92 Chairman: High Court judges! Well known for their broad approach.
Sir Rod Eddington: That is an interesting thought. Clearly we need the right sort of people on
that Commission.
Q93 Chairman: I think we have missed something about this.
Sir Rod Eddington: Coming back to the issue of timescales, you
have put your finger on a major problem.
Your point earlier was that if there are going to be infrastructure
constraints on the West Coast Main Line in ten years' time we need to be
thinking about them now and planning the solution, beginning that process
now. I would agree with that; I think
it is very important, but that is the problem, and it is the problem also for
transport and power generation and water, because when I went round the country
and spoke to the key stakeholders on these issues at local and national level
they said, "It is interesting that you should be talking about these issues in
the context of transport, Mr Eddington.
We have also been thinking about them in the context of other
things". For a lot of these areas the
planning cycle is a very long one, the investment cycle requires -----
Q94 Chairman: But are you not saying that your scheme will
do away with that? Is the whole point
of your scheme not that you will do away with the long time? The whole point of what you are suggesting
is that it must be speeded up.
Sir Rod Eddington: I think a revised planning process would
deliver greater certainty at lower cost.
Hopefully it would also be significantly quicker and you and I both know
of programmes and projects which were for ever in the planning review stage,
Terminal 5 at Heathrow being a classic example. There are others - Thames Gateway and whatever. I think that even with a streamlined
planning process the period between first discussions and the cutting of the
ribbon to open major transport infrastructure projects will be a very long one,
as it will be for power and other major projects in this country, and how we
square that circle with a five-year political cycle I think is a real
challenge.
Chairman: Now I am totally confused.
Q95 Clive Efford: You said that not going ahead with road
pricing was a no-brainer. How much do
you take into account the petition that was signed by more than a million
people?
Sir Rod Eddington: I said that it was an economic
no-brainer. Road pricing for me is an
economic no-brainer. What do I mean by
that? Basically I agree with the
evidence presented to this Committee in early 2005 and this Committee's
conclusions from that presentation, which were these as I saw them, first, that
the number of motor cars on the road and the way in which those cars are used
has grown much more quickly than the stock of new road available and that we
cannot build our way out of trouble in a road sense; that the cost of
congestion is significant today and will continue to grow; that clearly the
petition tells me that people are concerned about two things on road pricing,
both of which are perfectly understandable.
One is the cost to the motorist that road pricing applies and the second
is this question of what will be done with the data, privacy issues. They are perfectly understandable
concerns. My points would be these,
that to successfully introduce widespread road pricing you will need to tackle
both those concerns, that is absolutely clear, but that the cost of not
tackling congestion on the roads will be a mounting cost to the economy, that
road pricing as a mechanism to manage demand on the road brings real benefits
as well as real challenges, and that we need to think about road pricing in the
context of public transport. I go back
to the earlier observation. If you are
going to deliver a road pricing scheme, demand management on the roads, then
you need to think about the public transport dimension. I know that road pricing is
contentious. You did not need my report
to tell you that. The idea of road
pricing as a form of demand management has been around for decades. It has gathered momentum in the last few
years and, as I said, this Committee saw fit to hold a series of hearings in
January 2005 on this very subject, and I basically agree with the evidence that
was presented by the experts and your conclusions on that issue.
Q96 Clive Efford: In terms of the impact on public transport
what assessment have you made of the likely impacts if we were to go for a
national road pricing scheme?
Sir Rod Eddington: I guess I would measure it in a number of
ways. Clearly there are some questions
about the all-important detail of a road pricing scheme. That is why I think you need to run some
pilots and that is why I think it is going to take ten years. You could argue that ten years is not very
ambitious. I would argue that it is pretty ambitious in terms of not only
deciding what technology you are going to use and how it is going to work but
also getting people to accept that it is the best way forward. I think they are critical issues but let me
give you an example. I think that even
with widespread road pricing there will still be a case for additions and
extensions to the road network. I am
not saying deliver road pricing and do not build any new roads, but I believe
that with a sensible road pricing scheme the new road build would be reduced by
80 per cent over what it would be without a road pricing scheme and there would
be a significant saving to the national economy by reducing congestion.
Q97 Clive Efford: Which do you put more value on, a localised
road pricing scheme, say, in the city, or on the strategic road network?
Sir Rod Eddington: I see road pricing as a way to tackle the
issue of congestion and I think the most important place to start is where the
congestion challenges are greatest and they are around our major urban areas in
this country. London is the city which
has the greatest congestion challenges but there are major congestion
challenges in Birmingham, Manchester and in other parts of this country, and I
see road pricing as a mechanism to tackle congestion and give us the economic
benefits that come with that.
Q98 Clive Efford: And how do you square the circle of increased
reliability in terms of journey times but also in terms of reducing congestion?
Sir Rod Eddington: I guess the freight forwarders put it best to
me when they said, "We go from this logistic centre in Birmingham to the
supermarket and that is a journey that normally takes us an hour but one in
four journeys take two hours, so we always have to budget for two hours of
truck time for that journey", and therefore there are huge inefficiencies which
come into their lives as a result of the lack of predictability that congestion
delivers to our road network.
Q99 Graham Stringer: In all the academic advice you have had in
doing your report did you find a piece of academic work which could correlate
economic impact with congestion, and, if so, can you tell the Committee which
it is?
Sir Rod Eddington: I think we are fortunate in the sense that
there are people like Stephen Glaister and Peter Mackie in this country who
have thought more about this issue than anybody else. I believe we can measure the cost of congestion to the nation in
terms of time lost and the economic inefficiencies that brings. My work contains some quite detailed
analysis on that point. You can look at
the analysis, you can find out how I got to where I got and if you wish to challenge
it you can.
Q100 Graham Stringer: I am genuinely interested in the problem because
I think Stephen Glaister and the other 45 professors of transport that we are
blessed with in this country regularly start from the position that loss of
time going somewhere has immediate economic impact and I do not believe that. When we have challenged them at this
Committee they say, "No, it is a way of measuring it", but if you look at that
loss in time and try and correlate it with loss of production or loss in the
economy it is not necessarily a straightforward equation.
Sir Rod Eddington: I would agree with that. Some of the journeys that take place on our
roads where time is lost have precious little impact on the economy. Others are very important.
Q101 Graham Stringer: What I am trying to get to is some real
measure of that rather than something that is a consistent model, which leads
me to my next question on this issue which I think is at the heart of this
debate. Congestion is worse in cities
because you cannot expand the road network because there is just a limit to the
capacity in cities. Do you believe when
you say that there should be pilots on congestion charging that the experience
in cities is useful in looking at congestion on the inter-urban motorway
network, because the experience is so different?
Sir Rod Eddington: I think that is right. I think you start with areas where the
congestion is greatest, which is in the cities and their urban catchment areas,
but you ultimately have to tackle congestion across the network and that
includes on the motorways, and in your part of the world particularly we are
already beginning to see real congestion in some of these areas, as you know,
so it is not just about the urban centres, although that is where the problem
is greatest; it is also about the broader network.
Q102 Graham Stringer: But it might be that in cities, where, for
the reasons you have said, sometimes loss of journey time does not have an
economic impact, it has the least economic impact even though there is more of
it, and you may get more economic impact on the motorways.
Sir Rod Eddington: I think that is right. That is why you will ultimately need to
trial more broadly than the urban centre although that is where I would start.
Q103 Graham Stringer: Why is it not sensible then to trial on a
linear bit of motorway going between Birmingham and Manchester or the M25, some
coherent part of the motorway, relatively simple to understand, rather than a
very complicated economy like Birmingham or Manchester or London?
Sir Rod Eddington: I would make a couple of observations. The first, as again I am sure you know, is
that the Highways Agency are trying very hard to resolve congestion on the
motorways in other ways, for example, hard shoulder running. I have spent some time in one of the
Highways Agency vehicles going around that particular part of the motorway,
looking at the things they were doing, bringing information and real time to
motorists to help them make decisions about they did and how they did it. The worst congestion is in the urban centres
but my observation would be that we will quite quickly need to understand the
impact of congestion on the motorway network as well and I would hope that in
the fullness of time we can run some trials in an appropriate area there as
well. As I say, I know the Highways
Agency are trying other mechanisms in the first instance to try and resolve
some of the congestion challenges on the motorway.
Q104 Graham Stringer: I do not want to put words in your
mouth. You are saying we start in the
cities where congestion is worse, which one can accept, and move on to the
motorways, but without knowing whether the congestion in the cities has the
worst economic impact.
Sir Rod Eddington: In a sense the journeys that I was
particularly interested in were the journeys that impact the economy, passenger
and freight, some of which are people going to and from work every day, a
critical economic journey, obviously. I
think you can tease out the difference between congestion which diminishes the
economy and congestion which is a hassle but does not necessarily diminish the
economy. You are right, you find that
in all parts of our network - not just our road network, by the way; there are
parts of our rail network and our shipping network and our airport network
where congestion has an economic cost to the country as well. On our road network I would start with
cities but look at some of the other pieces of the jigsaw as well, and
particularly in the middle of the country, in the Birmingham and Manchester
area where the motorway network is under real pressure, it would be interesting
to see what you could do in congestion charging in that network as well.
Q105 Mr Clelland: Sir Rod, when you came before the Committee
on 30 November I drew your attention to the catch-22 situation we found
ourselves in in the north east particularly and presumably in other parts of
the country -----
Sir Rod Eddington: I remember that.
Q106 Mr Clelland: ----- where the economic growth in the region
is generating more traffic and therefore the Highways Agency were concerned
about congestion and the Highways Agency were then coming forward with what
were called Article 14 orders and putting a curb on the investment that we
desperately need in the area because of the congestion. Given the fact that the Highways Agency
under successive governments over the last 20 years have not made any major
improvements to the road structure at all, we are in this catch-22 situation
where as we improve the economy we cause congestion, therefore the Highways
Agency will put a block on development.
You said you would speak to the Highways Agency about this issue. Did you do that and if so what conclusions
did you draw?
Sir Rod Eddington: I think that issue probably resonates most in
some of the delivery issues in my report, in particular the role of national and
sub-national governance, who decides what, what revenues are raised and how
they are applied. As I said early on, I
believe the work I have done is as important in the north of the UK as it is in
the south and many of the challenges I have spoken to are just as important in
the north as they are in the south. In
some instances the scale might be a bit different, partly because London is the
biggest city in the nation and it is based in the south, but there are challenges
in the Midlands, in the north of England, up into Scotland and across to
Wales. It seems to me that the
challenge for local and regional entities is that they often have control over
some of the variables in the decision making process and not others. Buses are a good example. A local authority may wish to introduce a
bus franchising operation to improve public transport in that area because in
their particular patch a bus may prove to be a better solution, but they do not
have control of the roads and therefore they cannot designate a bus lane. There is a series of what I call governance
issues which, unless they are resolved, will lead to impasse.
Q107 Mr Clelland: What proposals do you have for governance
issues?
Sir Rod Eddington: This is clearly a much bigger issue than just
transport. It is true for other areas
and in the Lyons Report Michael Lyons' work on governance resonates with
me. I looked narrowly at governance in
the context of major transport projects and I looked at planning in the context
of major transport projects, recognising that there are other issues which will
bring those same two points to the table and you need a solution that works not
just for transport but also for a broader church. Planning as I understand it is being examined right now and I
would hope that Sir Michael Lyons' report will similarly forward the debate on
the role of local and regional entities as opposed to the national entity. If you do not resolve those issues you will
not change that reality.
Q108 Mr Clelland: Do you think the Transport Innovation Fund
process will shed any light on all this?
Sir Rod Eddington: Personally I am a strong supporter of the
Transport Innovation Fund. I would be,
would I not? What do I mean by that? Because it looks first at trying to promote
transport interventions that are pro-the economy and pro-growth, and, secondly,
because one of the things it is looking to do is trying to help move the road
pricing debate forward in a sensible and meaningful way, so I am a supporter of
it but I do not think any piece of the jigsaw in isolation is going to get us
where we need to go.
Q109 Mr Clelland: What role do you envisage for PTAs and local
authorities?
Sir Rod Eddington: I think they are both important pieces of the
jigsaw but I would draw back from those and say we have got to get it right not
just for transport but for other things as well. PTAs and PTEs have a significant role but I would not start
there. I would start with the
challenges that you have raised about how we unblock the logjam and how we move
it forward.
Q110 Mr Martlew: You have tried to answer it once or twice but
we have never really let you off the leash.
What do you believe the role of the bus is in the future, this low cost,
low technology vehicle that we have?
Sir Rod Eddington: You asked me earlier if I was surprised about
anything going in. One of the things
that surprised me was the low regard in which the bus is held in the United
Kingdom. I find that quite strange,
having at different periods of my life caught the bus to and from school and to
and from work. I think the bus,
particularly in the less dense corridors, and there are many of them outside
the major cities, is a terrific opportunity.
They have to work, customers have to have confidence in the reliability
of the bus, they have to have real-time information in front of them, the buses
have to be clean, well run and comfortable.
Buses are a terrific opportunity, in part because they are very
flexible. If you look at bus ridership
in the UK over the last 50 years it has been a straight line down. That has bottomed out but I think,
particularly in the context of a world in which road pricing is widespread
across the country, we have to address the public transport challenges that go
with that. Some of that is about the
train but I think the bus has a real role to play and we need to decide how we
are going to set up the governance model around buses and that is about our
local authorities and the bus operators working together. I spent quite a bit of time addressing that
issue in my report. I think buses are
very important. They are part of the
jigsaw but they are very important.
Q111 Mrs Ellman: How did you select the 200 business cases and
policies from the department's database?
Sir Rod Eddington: Things that have been put in front of DfT,
and as I went round the country, if it seemed to me that something was raised
with me as being really important on which there had been no activity, I would
go back and check it against that list.
Q112 Mrs Ellman: How many were rail schemes?
Sir Rod Eddington: I do not have the exact number in my head but
there are a significant number of rail schemes in there. Some of the rail schemes, by the way, are
issues raised in terms of station development, lengthening platforms, longer
trains, some of them are better use opportunities, some of them are bigger
schemes than that.
Q113 Mrs Ellman: Are you sure that they were
representative? How do you know that
the schemes that were presented to you were representative in any way?
Sir Rod Eddington: That is a fair question. I do not have the exact number in my head
but people regularly talk to me about those issues - station development,
upgrades to existing infrastructure, and some of the very biggest things were
rail schemes.
Q114 Mrs Ellman: But you do not know if they were
representative?
Sir Rod Eddington: I do not have the number in my head. They were representative in the sense that
they were raised with me regularly and I know a number of them are dots in that
chain. I cannot tell you how many of
the 200 dots you are asking about but I can find out for you and let you know.
Q115 Mrs Ellman: In your general analysis you talk a lot about
the benefit of transport to the economy.
What about the benefit of transport to people in getting about their
lives, having access to facilities?
What kind of weighting does that have?
Sir Rod Eddington: That is why I said at the beginning that I
recognised that when governments take decisions around transport they also
reflect on the environment and social inclusion. I recognise that is important.
A major role that transport plays is by and large getting people to and
from work every day, so the economy works and delivers benefit to the people,
but I recognise there are other issues in there which governments reflect on
when they take transport decisions.
Q116 Mrs Ellman: But do these other issues get any weighting
in the assessment?
Sir Rod Eddington: I made the point that I could not do justice
to you on those two things. There are
some social welfare issues built into the evaluation, yes, but I could not do
justice to a full review of the social benefits of transport.
Q117 Mrs Ellman: You were talking about aviation emissions and
a lot of faith has been put in technological advancement to control
emissions. Do you think you have been
over-ambitious in that field?
Sir Rod Eddington: I think we have to see aviation emissions in
context. Aviation is responsible
globally for about two per cent of emissions and that number is true in the UK
as well, and domestic aviation is responsible for about half a percent, as I
understand it, of UK emissions. Clearly
there are issues around emissions for aviation but I do not think solving the
emissions problem for aviation is going to solve the sustainability transport
issue. I recognise from my time in
aviation that aviation has some real challenges in this area and needs to
reflect on them.
Q118 Chairman: You are talking about doubling aviation. We are not talking about a small incremental
increase.
Sir Rod Eddington: I agree.
Q119 Chairman: You are also talking about doubling in terms
of freight.
Sir Rod Eddington: In a carbon constrained world one of the
things the nation will need to decide is where its carbon is going to be spent,
as it were. Nick Stern in his report
makes the point that there are some parts of the carbon jigsaw which can be
addressed much more quickly than others.
Q120 Chairman: Forgive me if I have some problems with that
because, you see, one of the other things you say is that expanding airport
capacity in the south east would reduce business costs by £6 billion over the
period to 2060.
Sir Rod Eddington: Yes.
Q121 Chairman: If you are saying aviation use is going to
double, both in freight and in passengers, but nevertheless we should have
another airport in the south east ----- or at least you did not say that
Sir Rod Eddington: I did not say that.
Q122 Chairman: But you talked about expanding airport
capacity, which assumes at least a quarter increase.
Sir Rod Eddington: I think the critical point is that the White
Paper on Aviation said that you can only build a third runway at Heathrow if
the environmental conditions that surround that are met. I would simply say that I agree with that
and I recognise that aviation has some substantial challenges on this front.
Chairman: I think we can agree with that.
Q123 Mrs Ellman: On the planning proposals you have put
forward, how much time do you think they will take?
Sir Rod Eddington: I can only talk to what I would describe as
major transport infrastructure projects.
I am more concerned with cost and certainty of process than I am with
just time. I think for some of these
major projects the planning process, quite rightly, will take a significant
amount of time. If you are going to
consult properly, if you are going to meet the laws of this country and the EU
through the consultation process, some of these planning processes will go on
for some time, but the bottom line is that the T5 planning process took four
years to build a new terminal on an existing airport. I think that is far too long.
I am interested in cost and certainty as well as time.
Q124 Mrs Ellman: How can you want to be sure of certainty if
there is going to be a fair assessment on capacity?
Sir Rod Eddington: People who have put forward projects have
said, "We would rather a yes than a no, Mr Eddington, but if it is going to be
a no do not make us wait ten years and charge us £15 million in the process".
Q125 Mrs Ellman: So time does matter?
Sir Rod Eddington: Time matters but so does cost, and so does
certainty of process.
Q126 Mr Scott: In November 2005 I asked you a question about
whether local authorities would still be involved in the planning process and
you said they would.
Sir Rod Eddington: Yes.
Q127 Mr Scott: Has your opinion on that changed?
Sir Rod Eddington: No, it has not. I think the role of local authorities is critical not only to the
planning process but also to some of the key transport initiatives in their
area.
Q128 Clive Efford: When do you think we should move to stabilise
emissions in the transport sector in the light of the Stern Report?
Sir Rod Eddington: The Government has said that they wish to see
a 60 per cent reduction in emissions by 2050.
Having set that target we need to work out what that means for power
generation, for industry and for transport.
I do not think you can take one piece of the jigsaw, transport, in
isolation. I think you need to look
across that piste. However, it is clear
that we will move towards a carbon constrained world for transport and whatever
transport does will have to be consistent with the national guidelines. The challenge is how governments go about
delivering that. You will know more
than I about that. My sense is that it
will involve a combination of things: how we treat carbon, cap and trade or tax
or a combination of the two, what regulations governments choose to introduce
to assist in the process of carbon reduction, and finally the extent to which
governments will encourage innovation and investment to deliver outcomes. That is something that only an elected
government can decide.
Q129 Clive Efford: In the light of the growth that we have seen
in emissions in transport, road transport has increased CO2 emissions, and the Chairman
has already highlighted the forecast growth in demand for air transport, how
much have you taken the economic case of transport or looked at other sectors
and their ability to pick up the excess if there is growth in emissions in the
transport sector?
Sir Rod Eddington: Ninety per cent of the carbon emissions from
transport come from ground transport, in other words, ten per cent comes from
what happens in the air and 90 per cent comes from what happens on the
ground. As part of my journey one of
the things I did was speak to the carbon manufacturers about how they saw the
motor car opportunity in a carbon constrained world. There are a lot of pieces to this jigsaw and I cannot tell you
what governments will decide transport should contribute in the context of
power, manufacturing and the rest. All
I know is that transport modes should pay their full environmental costs.
Q130 Chairman: I want to ask you one or two things about
that, if I may, just to wind up. How
much did your entire study cost, even if you were cheap labour?
Sir Rod Eddington: I was cheap labour, Chairman. Well south of one and a half million all up.
Q131 Chairman: "Well south of one and a half million"?
Sir Rod Eddington: Sorry, Chairman. That is an Australianism.
Less than one and a half million.
As I understand it, once the purdah has passed then the details can be
put before you but let me say well under one and a half million. The two major cost items, which covered the
vast majority of the costs, were the cost of my team who worked on this
programme with me for 18 months and the cost of some modelling work we
commissioned with independent experts to help us with our understanding of some
of the economics of these issues.
Q132 Chairman: Do you think your team being all civil
servants in any way coloured their judgment?
Did they come in with a perceived view of what they ought to come out
with? Most civil servants know what the
answer to the question is before they put it.
Sir Rod Eddington: I found them remarkably open-minded on that
and one of the questions that Mr Stringer asked me was to what extent my
preconceptions were confirmed or denied.
When you spend as much time as we did talking to independent
stakeholders around the country, when you spend as much time as we did having
our thinking pressure-tested by groups like the academic friends, you have to
keep an open mind, and we did.
Q133 Chairman: One of the things that you are very insistent
upon is geographic clustering. You do
not think that is a policy that would lead to more polarisation?
Sir Rod Eddington: No, because I think the modes that matter,
including cities and their supporting regions, are found across the UK.
Q134 Chairman: But you have been very specific, saying that
it must be a very robust business case before transport or anything else, in
the answers you have given to Mr Clelland and Mr Stringer. You have made it very clear that you would
regard a strong business case really as being the decisive factor and that
local input would be at a very early stage and the decision would be taken by
someone who was not elected.
Sir Rod Eddington: I do not know if it answers your question but
I find strong business cases across the modes across the country.
Q135 Chairman: I think it would be helpful to know whether
really when you talk about that you are saying that you support journeys that
matter to the economy. Is that where
you are coming from?
Sir Rod Eddington: Correct, absolutely right.
Q136 Chairman: And that takes precedence over other things?
Sir Rod Eddington: I recognise that when governments take
decisions about transport they reflect on other things. An even stronger point, based on the work I
have done, is that there are lots of transport investments, big and small, that
have strong economic benefits. You do
not have to look very far to find strong business cases for investment in
transport in this country, whether it is on the road, whether it is on rail, or
whether it is in ports or airports.
Q137 Chairman: Do you think, Sir Rod, that if there was a
change in government over the next few years your programme would be followed
by another political party?
Sir Rod Eddington: I would hope that the thinking that sits
behind it would be embraced by another political party but, of course, that is
all very much for them to decide. I
would hope that the thinking that sits behind it would be embraced.
Q138 Chairman: How long do you think it would take to
implement some of the recommendations in your report?
Sir Rod Eddington: You could implement the way in which I have
looked at the economy and the transport pieces that fit to it. You could use that as a mechanism for
analysis now if you wished.
Q139 Chairman: For analysis. What about delivery because it is delivery I am asking you about?
Sir Rod Eddington: Spot on, and that means you have to resolve
issues like the planning process and the role of local government, ie, national
and sub-national decision-making.
Q140 Chairman: Are you going to have an involvement with the
review from now on?
Sir Rod Eddington: I guess I am here in part to champion its
thinking to you as a group. I spent
some time through last week talking to key groups, whether it was key groups of
transport professionals or people like Transport 2000, so I am doing what I can
to support the process.
Q141 Graham Stringer: Do you have to resolve the functioning of the
Department for Transport? Is it part of
the problem? Is it fit for purpose?
Sir Rod Eddington: I mentioned earlier that I think we need to
think about the way in which the department is organised to address the
transport challenges of the nation, and I believe that is happening right now.
Q142 Graham Stringer: Last time you were here I asked you whether
you thought, as many green groups and commercial groups do, that the Department
for Transport was part of the problem.
Can we imply from the fact that you want to restructure it that you at
least accept part of that as being the case, that it has been part of the
problem?
Sir Rod Eddington: Structures, whether they are department
structures or business structures, evolve.
They change. I have a very clear
model in my head: strategy, structure, people.
What is the game plan? What is
the strategy? Do we have the right
structure in place to deliver the strategy and do we then have the right people
in the structure to deliver the strategy?
I think if you accept the strategy I have for transport then you need to
ask yourself the question, does the DfT have the right structure to deliver
that strategy?
Q143 Chairman: Do you think the system of public service
agreements entirely has worked?
Sir Rod Eddington: I think the public service works very hard to
try and deliver the right outcomes. You
know as well as I do -----
Q144 Chairman: No, no, I am not talking about the public
service; I am talking about PSA targets, because that is what you said, that
they should be amended, the department's objective should be changed, so are
you really saying that the general system of public service agreements and
targets works or not?
Sir Rod Eddington: I think you have to have targets. You have to have agreements. If you do not put some firm measures in
place then nobody knows what they are shooting for inside or outside. All I am saying is they have to be the right
targets and they have to be focused on the right interventions.
Q145 Chairman: Are they going to take any notice of you, Sir
Rod?
Sir Rod Eddington: I believe so. I hope so, and I will do all I can to make it so.
Q146 Chairman: On that happy note we will allow you to
contribute to the carbon emissions.
Thank you very much for all your work.
You have been very open. You
will not be surprised if I say that if you continue to have a voice in this
field we shall continue to take a great interest in what you do.
Sir Rod Eddington: Thank you, and if I continue to have a voice
I look forward to coming back.
Chairman: Do not worry; you will be asked. Thank you very much indeed.