Select Committee on Mersey Tunnels Bill Minutes of Evidence

Examination of Witnesses(Question 140-159)

Mrs Charles George and Miss Joanna Clayton

Thursday 30 January 2003

140. MR GEORGE: I do not believe that is quite right, sir, because initially of course the tunnel, the first tunnel, was built under a Private Bill, I think, promoted as I recollect by Kent and Essex County Councils, but at any rate, that was a pure Private Bill, which contained the original provision that as soon as the debt had been paid off the tolls would cease. That makes it entirely comparable with the situation here, with the first Bill for constructing the Birkenhead tunnel. There, as I understand it, you are on all fours. Then, of course, at Dartford they had the Dartford Crossing. That was promoted through a Hybrid Bill - to all intents and purposes the same as a Private Bill except that it had a government sponsorship - and that enabled the construction of the new bridge, the Queen Elizabeth Bridge there, and again had a similar provision for maintaining the toll until it had been paid off. You have now reached the situation where the debt is paid off and the Government has decided through a statutory order that the appropriate thing is that the toll should be continued, the surplus should be taken, and we will come in a moment to what it is to be spent on.

141. In my submission, contrary to what the Honourable Member is putting to me, the historical background and indeed the legislative background is identical to our own. It is simply that time has moved on and the previous concept of having a free crossing has been deliberately abandoned on the basis that if you have that, it will simply clog up; you will have too many vehicles there.

142. CHAIRMAN: This is not the point that we are here to discuss in this Committee. There are many views of why the crossing toll was kept on at Dartford. One was that there were some significant funds to be raised for yet another crossing to be built in that area. So let us not go down that route because we will get into a debate on that and that is not what we are about. I know that you would not wish, Mr George, to mislead this Committee in any way. Therefore, I wonder if you could just revisit what you said about a Hybrid Bill being almost the same as a Private Bill. To my mind, a Hybrid Bill is a government sponsored Bill and a Private Bill is not, and therefore they are entirely separate and different animals.

143. MR GEORGE: I certainly do not intend to mislead the Committee. Maybe from my perspective they are similar because they both lead, in the case of opposition, to a select committee, and this kind of proceeding.

144. It is quite correct that a hybrid bill, by definition, is a bill that affects private interests, as does a private bill, but which has the support, and is being promoted by, the Government. It therefore follows that the principle of a hybrid bill is determined on the Second Reading debate and is not open to the Committee to consider, whereas in a private bill the principle is open to this Committee to consider. I readily accept that are differences, but I understood that the point Mr Field was primarily concentrating on was the fact that in the past, in the case of Merseyside, there had been statutory provisions, providing for something to come to an end. That was exactly the same in the past, and particularly at Dartford it began with the private bill. That was my point. Arguments about broken promise, for instance, appeared very strongly in the recent consultation at Dartford as to what should happen. Inevitably, many motorists wrote in and said, "there is a broken promise". Here again, at various stages people have referred to broken promises in Merseyside, because some people would like there to be no longer a toll.

145. The two final matters about the RPI that I should like to emphasise are these. First, it does not follow that because one is having an RPI mechanism, the toll will increase every year, even in a time of inflation. This is because the only increases that will be triggered are ones of 5 pence or 10 pence for charging purposes. That is obviously necessary. Some people thought that it would be very complicated and that there would be a new toll ever year; but in practice that is not how it would work, and it would not be so, even with quite considerable rates of inflation.

146. The second matter is this. Over time, applying the RPI mechanism, there would normally be an increased toll. There is a provision in the Bill in section 92C(2). It has been overlooked rather by people but it is an important provision. It is on page 145 of the Filled-up Bill. "On each occasion that an order is made ... the Authority shall consider, having regard to such matters of an economic or social nature within the county of Merseyside as the Authority considers to be relevant - (a) whether it is necessary or appropriate ..." that the increase should take place. That was specifically designed because there might be a particular time when, although the RPI increase has been triggered, there is a very good reason why, given a particular economic downturn, it is thought it would be disastrous; and you can then simply have the increase for some sorts of vehicles, or not have the increase at all. That mirrors the previous provision. There has always been a similar provision. That provision is retained. It is thought to be a desirable provision. It is not contained in the Severn or Dartford examples, but in that it has always been in the Merseyside legislation, it was thought appropriate that it should remain in this legislation.

147. When one reads the Petitions against the Bill, one might suppose that that provision is not there, but it is simply repeating in effect the old section 92(3) of the County of Merseyside Act, 1980, to which I referred the Committee this morning. It is a little different in its wording, but the effect is the same.

148. MR JENKINS: A downturn in economic activity will also possibly lead to a downturn in income for the operators. While you have still got existing costs and a heavy debt burden and interest payments, how do you meet the shortfall in income to cost?

149. MR GEORGE: The Honourable Member is absolutely right. A decision would have to be made in that situation as to whether there is any other way. It is not envisaged that it is very likely that this would happen, but it seems to me that there are two ways it can be done. One is to go to the Government and ask for the power to borrow. If one had a situation of direst economic crisis in the Wirral, for instance, one might go to the Government and ask, "Can we borrow to fund the tunnels for two years, rather than increase the tolls?" One can anticipate that one would probably get a rebuff, but that is one possibility. The other possibility is that one would have to go back to the five Merseyside authorities and ask them if they are prepared to do what they did in the 1980s or whether they would rather the toll was raised in line with the RPI. The normal process is that it would go up with RPI, but every time before the increase is actually instituted, there is an obligation under the Bill for the authority to simply ask itself this question: are there other circumstances that should make us stop at this particular point?

150. Another situation, although we do not envisage it arising, would be that although the RPI had gone up, due to some unforeseen circumstance, actually the cost of operating the tunnel had not gone up as much as the RPI, and therefore, for the next year, that particular increase was not called for. Those would be the only circumstances. I do not envisage this power being used very often. I can readily imagine why people would object if that provision was not maintained, because historically there always has been a provision, simply to act as a check on the authority that it does ask itself each time there is an increase, "is it likely to have an unfortunate economic consequence?" That is its purpose.

151. CHAIRMAN: Mr George, there is provision 92, in regard to further revision of tolls, which gives the power for the authority to ask the Secretary of State to increase the tolls by above the RPI, and that provision 92 replaces the provision in the old 1980 Act. The Secretary of State then follows the procedures as set out here; so there is still provision to increase at a rate higher than the RPI, should they wish, and then you go through the normal route - the London Gazette and public consultation and so on.

152. MR GEORGE: No-one, as far as I am aware, has criticised having that reserve power because one could imagine a situation where there was new legislation or there was an absolute catastrophe in the tunnel and there had to be expenditure for which there simply was not the means to pay it out of a toll rising at the RPI. That is why there is that fall-back position to go to the Secretary of State and ask for a rise of more than RPI.

153. It is rightly recognised by the Promoters that a rise of more than the RPI ought to be something upon which people are able to express a view, and, if the Secretary of State sees fit, he will call a public inquiry to consider it.

154. It may be - and I believe it is the position - that although the RPI increase at one stage was a controversial matter, it is now much less so when its significance is being considered by those who previously raised objections to it; and when the petitioner comes on to give his own evidence, it may be that the RPI mechanism is no longer as controversial as it once was.

155. The second purpose of the Bill, as referred to in the explanatory memorandum, is to remove the present requirement to reduce tolls once debts arising from the construction and operation of the tunnels have been repaid. Members may wonder how that comes about, and the answer is that you have to be fairly astute and knowledgeable to work all this out; but if one turns in the Filled-up Bill to page 147 in the A documents, schedule 3, that repeals the entirety of section 99 of the County of Merseyside Act 1980, and the old section 99(2) of the County of Merseyside Act, to which I referred the Committee this morning, has the provision that once the debt had been repaid, tolls should be reduced to the amount necessary for operational and maintenance costs. That is how this comes about, that that requirement comes to an end through schedule 3. That moment will not be reached until about 2048 or 2049, certainly long after my lifetime and probably after the lifetime of the majority of those in this room. The fact is that at present, if the existing legislation remained, at that point, tolls would have to drop; whereas the Bill proposes that that should not be the position.

156. Pending repayment of the debt, there is nothing in the existing legislation to require the reduction of tolls merely because there is a surplus.

157. We say that there are two very good reasons why Parliament should repeal the old section 99(2) along with the rest of section 99. The first of these is precisely the same transportation reason that I have already outlined in connection with the case for index-linking; so that the argument is even stronger when what is otherwise in contemplation is a significant reduction in the costs of private transport through the tunnels, as opposed to the maintenance of the present-day equilibrium, which is the Bill's proposal.

158. To put the matter in a nutshell, if you reduce the tolls simply because the debt is paid off, the tunnels will clog up straight away. The important thing is to keep the toll in place and to maintain the existing relationship.

159. I have already referred to the position at Dartford, and really the arguments on this matter are precisely the same as those which were considered by the Government then.

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