Select Committee on Mersey Tunnels Bill Minutes of Evidence

Examination of Witnesses(Question 100-119)

Mrs Charles George and Miss Joanna Clayton

Thursday 30 January 2003

100. MR JENKINS: You keep referring to the RPI but what has the price of cabbages got to do with operating something commercially, such as a tunnel?

101. MR GEORGE: Fortunately there is a very close link between the RPI, which you may refer to as the value of a basket of groceries, and construction costs. That is a matter which Mr Bates has got some tables on which he will take you to showing that there is actually, it may be counterintuitive, a very close comparison and the Dartford Tunnel and the Severn Tunnel both use exactly the same RPI mechanism. Those who have investigated the matter have decided it is the best index. In all these matters there are about 15 or 20 indices that you can use of varying degrees of comprehensibility but the RPI, which is a measure which is fairly readily comprehensible, actually corresponds pretty closely to the various costs which go into the tunnel. That is the wages costs and also the costs of maintenance and so forth. There is a very close correlation.

102. If we go to document C10 for a moment, because the hon. Member raises a point which is wholly understandable as to why one is using RPI, which has got a series of columns and the next page, which is table C10, they show that whilst there is not an absolutely precise parallel the RPI goes up slightly more than the road construction cost index, it goes up slightly less than the road/non housing index, a bit less than the non housing construction index, but it stands as a pretty good proxy which is why, as I say, the Department felt that it was the right index themselves to use most recently at Dartford. Literally this year, I think it is, it will be brought into force for Dartford from 1 April 2003, the tolls on the Dartford Crossing are going to have exactly the same RPI link that we have. It has been operating on the Severn for a number of years now. That is our answer to that.

103. The last matter on recent history is just a mention of the 1999 Bill. The Committee will probably be aware that in 1999 the PTA deposited a Bill in a very similar form to the present one but which included what I may term a privatisation provision by which they would have been empowered to transfer the operation of the tunnel to a concessionaire in return for a premium, which premium would then have been spent on financing public transport measures or on borrowing to finance public transport measures. That is precisely the sort of mechanism that the government has employed in the case of the Dartford Crossing with effect from 1 April this year.

104. That suggestion proved highly controversial for Merseyside and Merseytravel has rethought the arguments, not least in the light of debates on the floor of the House and the views expressed, and is persuaded that, anomalous as it initially seemed, they should retain the operation of the Mersey Tunnels and, therefore, they withdrew that original Bill in August 2000. I make it absolutely plain that this Bill is not intended as the first stage of a two stage stratagem by which privatisation is to be introduced. Indeed, in the Filled-up Bill, and the Committee will find that at A30 page 139 ----

105. CHAIRMAN: Mr George, I think perhaps at that point it might be a good point to adjourn until 2.15 this afternoon. We intend to sit until about 4.30 this afternoon, if that would be convenient to you.

106. MR GEORGE: It is an extremely good moment, sir, because I was literally just coming to the video in one minute, so the timing could not be better.

107. CHAIRMAN: Thank you very much.

After a short adjournment

(The Committee resumed after watching a video about the Mersey Tunnels)

108. CHAIRMAN: Mr George, can you take over and continue to guide us through the proceedings on behalf of the Promoters.

109. MR GEORGE; Thank you, sir. This morning you raised a matter about exhibit B5, the question being whether in fact there was some reserve capacity in the Queensway Tunnel, and I gave you a not very adequate answer. Indeed, I was wrong when I said that some of the capacity had been taken up by physical infrastructure works. The answer is both simpler than that but also in a way more complicated but it becomes apparent if I ask you to turn to exhibit B12. I pause for a moment because the bundle is not terribly easy to handle and this is an occasion when it would be helpful to have exhibit B12 and its table in front of the Committee.

110. What I should have pointed out to the Chairman was that there is a difference between total flows, as we were looking at in the graph at B5, and the key matter, which is what is happening in the peak hour, because it is really a peak hour problem here. If one looks in B12 under the "Capacity" column and in the eastbound morning peak one sees that for the Birkenhead Queensway Tunnel it has a capacity of 2,800, that being the figure immediately above the 6,800 in heavy type. If one then goes down to the traffic flows in the middle of the column and one picks up Birkenhead (Queensway) just above "Total" one sees that it is operating at 2,750 in the peak, so in other words it is running virtually at capacity in the peak. The same is true of the other direction. If you look to the middle column and look at what is happening westbound, and here concentrating on the position in the afternoon when that flow is coming back, one sees that the figure is 2,800 for capacity just above the 6,000 and that there are 2,450 going through. So despite the fact that there is overall some capacity, therefore, in the inter-peak, so far as the peak position there is very little spare capacity. That is the answer I should have given you when you raised the matter.

111. CHAIRMAN: Thank you.

112. MR GEORGE: Secondly, this morning just before we broke I was dealing with the question of the previous proposal to privatise the operation of the tunnel and I was dealing with the previous Bill. I had just mentioned that there is no sense in which the present Bill is the first stage of a two stage stratagem by which privatisation will follow. I had mentioned the Filled-up Bill. Could I ask Members, please, in the A documents to turn to A30, page 139. It is begun at page 133. This is the Filled-up Bill — Members no doubt will be very familiar with the concept — ie this is the Bill with a number of amendments which the Promoters wish to become part of the Bill and invite the Committee to approve and send forward.

113. At the page which I was taking you to, which is page 139, the Committee will see a proposal to add to the preamble the words which are in manuscript at the very top of page 139, namely "and the Authority has resolved during the promotion of the Bill for this Act that it wishes the tunnels undertaking to remain in public ownership". That, therefore is a formal statement. It records a resolution of the PTA in the autumn of 2002. A time will come under Standing Order 142(2) when the Chairman is reporting back to the House on the Bill and that Order requires you, sir, to refer to any proposed amendments to the preamble and to give the House the ground for the amendment to the preamble. The ground is that it records a significant event that has occurred and forms part of the background to the Bill. It records that important resolution whereby that decision has been made. We would invite you, therefore, to say that is the reason why the Promoters wish that amendment to the preamble to be made. Of course it does not affect the substance of the Bill at all, it is not one of the substantive provisions.

114. CHAIRMAN: It did strike me that this was really a view of the Authority at a particular time and, bearing in mind that the Authority will change its membership from time to time and that this is not a substantial matter in respect of the Bill itself, I just wondered why it should go on the face of the Bill. It seems to me that that is slightly questionable. Is it common for such a matter to take place, Mr George?

115. MR GEORGE: The preamble to a Private Bill will always record matters which relate to the Promoters and so forth, therefore some matters which may be regarded as parochial matters. I can only say that this has been highly controversial in the region, the whole question of the tunnels and, therefore, there was a lot of consideration given by all the various districts and the PTA to this matter. This resolution was passed. I know that there are very many people in the region who would welcome a formal record of the matter in the preamble to the Bill. Therefore, I can simply urge you to put it there and I give you the reason for it. At the end if it is not included but the substantive clauses go forward then the PTA will be safeguarded, but those in particular who felt most strongly about the matter in the past and who eventually prevailed in the debates in the region would be disappointed if that matter was not recorded. I do not propose to put it any more highly than that.

116. CHAIRMAN: We hear what you say and we will no doubt discuss it ourselves at some stage.

117. MR JENKINS: Can I ask for clarification on that point. When you say that it will remain in public ownership, I take it that means that it will remain in the ownership of the PTA, not only the ownership but it will actually control it and continue to run it?

118. MR GEORGE: That is right. The reference to "ownership" refers to ownership and control.

119. MR JENKINS: It will not be transferred to another public body?

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