Select Committee on Mersey Tunnels Bills Minutes of Evidence

Examinations of Witnesses (Questions 120-139)


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

120. The second main head of the Petition deals with its adverse implications. They make there four points. The first is that if the Bill goes through there will be no incentive for the tunnels to be run economically, efficiently and effectively. That is paragraph 10. My Lord, we simply do not understand that criticism. A substantial part of the tunnel budget goes on the labour force. Wages rise at a rate ahead of the RPI and, therefore, there will have to be great stringency even with the RPI. That, again, is a matter which can be explored with my witnesses and the Committee will be able to explore it if they think it appropriate.

121. Under the second sub-head, they say that the Bill's provisions will lead to hardship for tunnel users because part of their toll will be used for public transport purposes. This is paragraph 19, 14 and 17. They pray-in-aid the fact that they are already paying petrol duty and road taxes. That is paragraph 8.

122. My Lord, the same might be said of every motorist who comes into London and pays his congestion charge. He, of course, pays a fee which is then paid for schemes which are in the Mayor's transport strategy. That is part of the principle of hypothecation which is in the Transport Act 2000. Whether or not you regard it as fair or not may be, ultimately, a policy mater as to how you view the policy. My Lord, we suggest that the very small increases in tolls here - only going up by 10p a time in accordance with the RPI - will effectively be entirely undetectable. We do not believe it to be even arguable that there will be any hardship arising from the RPI rise in tolls.

123. The third sub-head is to say that there will be an adverse effect on the local economy in terms of labour, mobility, competition, inward investment and visitors. That is paragraphs 7 and 8 of the Petition. My Lord, tunnel costs, even if increased by the RPI, will remain only a very small part of total business costs. Clause 92C(2) is in there to make sure that every time there is a potential toll rise the needs of the local economy are considered. So there is a safeguard there in any event.

124. The fourth sub-head is they say it will be a hardship because the point will never be reached when the debt has been paid off and you have only got much lower tolls paying for operational costs and refurbishment costs. This is the "moving the goalposts" point, the broken promise, and that is paragraph 6. Again, we rely on the precedent of Dartford, and one has to look at this matter in the light of matters as they stand today. In particular, we remind your Lordships of the safeguarding clause 91(5), that when the debt has been repaid there has to be consultation before there is a decision to continue with hypothecation. Those are the first two main heads of the Petition.

125. The third consists of some what I may call technical criticisms of the Bill. Again, under this head they make four points. The first concerns the RPI, and what they say is if you are going to have some form of index-linking it ought to be some RPI-minus index - ie, something less than the RPI. We do not understand that particular criticism, and it seems to us that if RPI was the appropriate measure for Severn and Dartford there is no difference in Mersey why that should not be the measure there.

126. The second technical criticism relates to the wording of Clause 91(3)(e), and it appears in their paragraph 4. Unfortunately, in their paragraph 4 they are actually quoting from an earlier version of the Bill, but I think the point, when it comes down to it, will be that reference to the words "or for other purposes" at the end of (3)(e). It is as well that I explain to the Committee what the word "or for other purposes" are doing there. They are there to enable the money which was raised from the local authorities in 1988 to 1992 to continue to be repaid, that being money which does not fall within (3)(b). That is the "other purpose" for which that phrase is intended, and it is necessary to give clear, legal backing for those payments. I have already indicated to your Lordship that leading counsel advised in 1994 that the matter should be treated as a debt and repaid because otherwise there could be litigation to enforce its repayment. That is the other purpose. If your Lordships were troubled about that wording then, plainly, an amendment could be made to make that clearer. However, as I understand it, and I look to those on my left, that is the purpose of those words "or for other purposes". It is not suggested, as it were, for any other PTA junket that might be thought appropriate. Of course, your Lordships will recall that, again, judicial review exists; these moneys can only be spent on lawful, reasonable purposes. That is what the phrase "or for other purposes" was designed to deal with - to make sure that for this transitional period until the local authority debt has been repaid there is an express power.

127. CHAIRMAN: Mr George, I am quite certain I have written this sum down, but would you remind us again of the quantification of the precept?

128. MR GEORGE: It was £28 million, raised between 1988 and 1992. The present amount outstanding is less than that - £26 million - and that loan will be repaid by 2015. It is being treated as a loan with a period up to 2015.

129. The third technical point raised against us concerns the noise insulation works, in which it is said that we ought to be defining more precisely the properties which are going to benefit from the noise insulation regulations. I have already explained how it is that actually the noise insulation regulations will themselves define the recipients. That is paragraph 21 of the Petition.

130. The fourth technical point concerns the reserve power to apply to the Secretary of State for an exceptional rise. That is paragraph 20 of the Petition. I have already explained that it seems to us sensible to have the reserve power. If you have not got the reserve power then if there is a crisis you will have to go to the local authorities or promote another Private Bill. As we know from the experience of these Private Bills, it can take several years. It seems more sensible to have the reserve power in the Bill. Those are their four technical points.

131. Their fourth main argument is that the Bill is premature. That is paragraph 16. They say that it is premature pending the construction of the new Runcorn Bridge and, in particular, a decision whether or not that is to be tolled. My Lord, I can bring your Lordships up-to-date about the Runcorn Bridge. First of all, I ought to draw your Lordships' attention to A.3 where your Lordships can see where the Runcorn Bridge is, if any of your Lordships are not immediately familiar with the local geography. That shows the existing bridge. It is planned that there should be a further bridge. The existing bridge is not tolled but it is planned there should be another bridge and the overwhelming likelihood is that it will be a toll bridge. If anyone raises their eyes to that, I cannot point to an express statement which says it will be tolled but your Lordships may be aware - I am sure Professor the Lord Bradshaw will be able to advise the Committee in due course on this - that it is difficult to think of a recent transport project which has not had to finance itself, insofar as it is able to do so (if I may put it that way) at stage one, and that is why the Thames Gateway Bridge is going to have a toll, and why every new tram scheme has to charge fares; they cannot just run free and gratis. So that the overall likelihood is that it will be tolled.

132. The position is that the Government has not yet made up its mind that this bridge even will be built. In December 2003 they put it into a special category called "super work in progress". That, I think, can be taken as meaning that it is regarded as, generally, a good thing which, therefore, has got a measure of support, but work in progress is government-speak for "we are reviewing the figures and the dates and we are not going to make a precise announcement at present". It is no doubt wholly appropriate that that should be so, but the position is that so far as the Committee is concerned you have no idea at all when or if the go-ahead will be given, or when that bridge will be open. What we say is that it simply would be nonsensical to defer a decision on this Bill in a situation where powers have not yet even been applied for to build a second Runcorn crossing.

133. My Lord, I hope that that, at any rate, indicates the sort of way we approach the Petition. As I indicated at the beginning, my Lords, I have got two witnesses. Let the bundle of exhibits be circulated. This is one the Petitioner already has. This is a different bundle and this bundle, so to speak, is mainly legislative matters that your Lordships can generally put aside now. The one with the tables is yet to come.


Examined by MR GEORGE

134. MR GEORGE: Are you John Wilkinson?

(Mr Wilkinson) I am.

135. Are you Director of Resources for Merseytravel?

(Mr Wilkinson) Yes, I am.

136. If the Committee turns to B1 you set out your qualification and experience?

(Mr Wilkinson) Yes, I have.

137. We will not take up time by reading paragraphs two and three, which deal with your early experience, paragraph four tell us that you went to work for Merseyside County Council in 1974. Paragraph five tells us that you became Chief Auditor of the County Council and became involved with Mersey Tunnels tolls. Then paragraph six tells us that since 1986 you have been employed holding the dual offices of Treasurer of the Merseyside Passenger Transport Authority and Finance Director of the Passenger Transport Executive and you Chair a National Committee of Finance Directors.

(Mr Wilkinson) Yes, my Lord.

138. Can you tell the committee the five main heads of your evidence?

(Mr Wilkinson) My intention is to deal very briefly with the origins of Mersey Tunnels and their chequered financial history, moving on to their financial patronage prospects under the current legislation and comparing that with alternative scenarios if the Bill is approved and dealing with them within the context of the Bill and then specifically the local consultation and the petition against the Bill.

139. At your Exhibit B2 you have an outline of your evidence, which the Committee will be able to look tick off. In your Exhibit B3 you set out the details of the Transport Authority and the Executive, could you just explain to the Committee about paragraph 2.2 and about the relationship there is with the local authorities?

(Mr Wilkinson) The title Merseytravel is a generic operating title which covers both the Authority and the Executive. We have this very unusual arrangement whereby the full­time directors of the Executive are also Chief Officers of the Authority. My colleague is both Chief Executive of the Authority and Director General of the Executive and I am Treasurer to the Authority and Finance Director to the Executive. This duality of roles helps to fuse the bodies together and we work together under a common name.

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