Select Committee on Mersey Tunnels Bills Minutes of Evidence


Examinations of Witnesses (Questions 60-79)

MR CHARLES GEORGE QC and MISS JOANNA CLAYTON, BIRCHAM DYSON BELL.

The Petition of David Loudon, John McGoldrick and MR JOHN McGOLDRICK examined

60.There is plainly a practical, financial argument for index linking of tolls, we believe that to be self­evident. There is also a transportation argument because public transport costs rise broadly in line with the RPI and thus unless tunnel tolls rise in a similar way private car travel via the tunnel will become cheaper than comparable public transport modes, in this case going through the tunnel either by bus or going through by rail as a separate rail tunnel under the Mersey. If that happens, if the cost of car travel becomes lower than the cost of the public transport modes inevitably there will be a shift from bus and train to private car. That is regarded as being undesirable for two reasons, first of all it conflicts with the policies being pursued locally and nationally of trying to increase the public transport modal share.

61. I emphasise that the aim is not by the RPI to make private transport relatively more expensive than public transport, merely to maintain the existing equilibrium.

62. Secondly, if a private car becomes relatively cheaper than public transport as a way of crossing the River Mersey inevitably the tunnel which attract additional traffic, the existing reserve capacity reserve will be used up more quickly than otherwise and that will lead to congestion on the entry roads to the two tunnels and to further spreading of the peak period, instead of being confined to a relatively short period of an hour to an hour and a half it will spread. Your Lordships will be aware that in London one has the extraordinary phenomenon of a peak spread which goes from 6.30 in the morning until 10.30 in the morning, a fairly long period.

63. Of course the more you get a spread of the peak the less time there is to carry out tunnel repairs. If you have a short peak you can close off lanes and carry out repairs in the interpeak, as soon as you get peak spreading you make it much more difficult to carry out repairs.

64. The transportation argument for a link to the RPI is not novel to the Mersey Tunnel, it was for precisely the same reason that Central Government decided to maintain the tolls at Dartford, even after 2003 when the tunnel and bridge had been paid for. Initially at Dartford the idea was tolls until you paid for the cost of it, then no tolls. The Government looked at this matter in the early part of this century and the decision was finally taken that they were not going to do away with tolls, they were going to maintain tolls at Dartford.

65. Your Lordships have the relevant document in A.31, if I can take you to it, in A.31, page 188, this is the press release dealing with the new charging scheme at the Dartford crossing. Your Lordships will see two­thirds of the way down the page, "the charges will be held at existing levels", that means at RPI levels because that is what controls them, existing their means at RPI levels and will help to reduce the growth of congestion of the crossing, ensuring smoother and more reliable journeys by and for users.

66. That was followed by a consultation on the matter and your Lordships will be able to find that document in the bundle at page 191 that is the responses to the consultation. If I can take your Lordships to page 194, at paragraph 7.6 under response, "while we recognise that charging will have an impact on the local economy it is also clear that congestion impacts heavily on the economy and without continued charging this could be much worse. Similarly because the crossing is part of such a key route as M25 we need to ensure that congestion does not grow at the rate it would if there were no charges". There is an acceptance that the amount of demand reflects the cost and the decision was taken to maintain tolls at Dartford.

67. That is part of the philosophy behind this Bill to try to continue to suppress demand to an extent for a transportation purpose. That has been welcomed by the local authorities. If I can just refer your Lordship to A.17, I am not going to go through the responses of all of the authorities but they are all set out here at A.17. I particularly take your Lordships to page 41, which is part of the response from Liverpool City Council, at page 41 (a) they say, "Linking toll levels to inflation would provide an easily understood and supportable way of ensuring tolls change as costs, including public trust transport costs, increase".

68. Your Lordships may be fearful that tolls will get too high if there is an RPI mechanism. The Bill contains a safeguard against this. Could I direct your Lordships to Clause 92C in the Bill which in the bundle is at page 111. It is 92C (2) "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 in relation to any or all classes of traffic to exercise its power to reduce tolls. (b) If the Authority considers that it is necessary or appropriate to do so for how long tolls should be reduced or continue to be reduced". Every time there is a potential RPI rise the authority made up of the elected members has to ask itself the question posed by 92C (2), would this be damaging taking into account those matters and if it would we must have a rise which is less than RPI for all classes of vehicle or for some classes of vehicle. That is particularly there. If it should ever transpire that the PTA are simply not looking at 92C (2) someone will be able to challenge them in the courts because that would be a breach of a manifest statutory duty and they have to consider that on every occasion. I shall probably not be very popular for saying that to my colleagues on my left but there it is, they have undertaken a statutory obligation and it is enforceable in accordance in the ordinary way that statutory obligations are enforceable.

69. The second aim or purpose of the Bill was to remove the present requirement to reduce tolls once debts arising from construction and operation of the tunnels have been repaid. I took your Lordships a little earlier to Section 99(2) of the Country of Merseyside Act 1980 which provide when the debt was repaid you could only have a toll sufficient to cover operational and maintenance costs.

70. That situation at present will be reached in about 50 years' time when the debt will have been finally paid off. We say that there are two very good reasons why Section 92(2) should be repealed. The first is the same transportation reason which I already outlined in objection with the case for index­linking. We say that it would be thoroughly undesirable that the toll should fall right down, that would be an encouragement to more cars to use it and for people to divert from rail and bus to use it.

71. Of course, we then face the argument of broken promises and your Lordships may recall that, on Second Reading, Lord Hunt made much of what he said had been told to him as a child that, in due course, the tolls would go altogether or, at any rate, that they would be reduced, but exactly the same argument was advanced in connection with the Dartford Crossing. There is a whole section of the response document on Dartford dealing with those who said it is a broken promise to maintain tolls at Dartford once the cost of construction had been paid off. That argument was forcibly rejected there and, if I can take your Lordships to A31, page 192, paragraph 7.1, you will see the heading "Broken promise" and you will see that 60 per cent of the people were opposing what the department was proposing and that the response is:

72. "When the undertaking was made the tolls would cease, the huge growth of traffic that has taken place at the Crossing was not foreseen. To cease charging at the Crossing would lead to faster traffic growth, increasing the congestion problem at the Crossing. Therefore it would, at this time, be imprudent to remove charges" but there would be a provision for a review in the future. In this Bill, there is a similar provision for a review in the future and your Lordships may like to make a note of that provision for a further review and it is at page 107, clause 91(5) which provides that, when the debt has been paid off, there has to then be a period of consultation before the money can be used for any purposes other than operations and refurbishment. So, that particular provision there is exactly in line with the sort of thing the Secretary of State was saying at Dartford, that there needed to be a review when one reached the moment. Some years off but, at that stage, there will be provision for a review.

73. Officers of the local authorities have advised their members and their members have supported what is here proposed. Wirral was less enthusiastic than the others, but even they are not opposing it and your Lordships may find it interesting as an example to go to A17 and the response of Knowsley Borough Council. It is A17, paragraph 5.5, page 40. The second sentence of paragraph 5.5 reads:

74. "The existing requirement that the Tunnels tolls should be reduced when the Tunnels debt is paid off could leave Merseytravel without the ability to use Tunnels tolls as a demand-restraint mechanism. Worse still, such an arrangement could lead to serious cross-river capacity and congestion issues in the future." Precisely the same point that I was making.

75. The second reason for repealing section 99(2) is that it enables surplus tunnel tolls to be used for the transport needs of Merseyside as identified in the local transport plan and that is a matter which I will be coming on to in a moment.

76. Before I leave that matter, I come back to Lord Hunt's point which was on democratic accountability. He wanted this Committee to be satisfied that the local authorities would be properly involved. Your Lordships have seen now that there is a particular procedure of consultation which will include the local authorities and, if the local authorities do not want what we are proposing to happen, then they will be able to mandate their members who sit on the PTA and ensure that it does not happen and if the tolls do come down, effectively, as on all matters, it is the local authorities who are in the driving seat here. They can make whatever determination within the law they see fit.

77. The third aim of the Bill is to allow the authority to use surplus tunnel tolls' income to improve public transport services in Merseyside. Mr Wilkinson will explain that, barring disaster, barring wholly unexpected costs for refurbishment, there will, with the RPI mechanism, be a surplus sum coming in from tolls net of expenditure which, pursuant to this Bill, could then be spent on the projects contained in the local Transport Plan, only on polices which have gone into the local transport plan and of course there is always consultation on the local transport plan. No one could say for certain what the extent of those surpluses will be but it could be that, by the late 2020s, the figure might be as high as £25 million a year. We will put before you some figures. That is making certain fairly optimistic assumptions but it might be an annual income of that sort of sum which would become available to be spent on projects in the local transport plan.

78. Can I make it absolutely plain to your Lordships that no money can go on local transport plan projects unless previously all the costs required for the debt and for the operation and maintenance of the tunnel have been met. So, there is no question of syphoning off money and running, let us say, a dangerous tunnel or not a properly manned tunnel, but it is simply a question of what I may call the net surplus. Once you have paid for the basic elements, the surplus could be used. There is nothing new in this because it is precisely what is happening at the present moment at Dartford and it is precisely what is about to happen - I am not sure it has yet happened but is yet to happen - on the Forth Bridge in Scotland. That is the idea of using some of the toll revenue for associated transport purposes. In the case of the Dartford Crossing, of course any money we may have as surplus is tiny by comparison. At Dartford, there is going to be £50 million a year available right from the start in surplus toll money, that is money available in 2003/04 for spending. What the Government have said is that that will be spent on transport purposes, not confined narrowly to the two authorities at either end of the Dartford Bridge but generally in that corridor, and the way in which the Government have put it is that possible projects include improvements in and around the M25 and transport spending in the wider Thames Gateway area and that area of course is London, the Medway, North Kent and South Essex.

79. Your Lordships will be able to follow that up in A31, page 189. That is the press notice to which I have already referred your Lordships, it begins at page 188. The top of page 189 and it is the paragraph just above "Note to the Editors" - they still have not announced quite what it is to be spent on but what they have done is to allocate £1 million extra to Kent County Council and £1 million to Thurrock Council as we can see at the top of the page for their local public transport and railway station improvements. What we are proposing to do is entirely in line with that.


 
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