Examinations of Witnesses (Questions 120-139)
MR CHARLES GEORGE QC and MISS JOANNA CLAYTON, BIRCHAM
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
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
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
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
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.
MR JOHN WILKINSON, sworn
Examined by MR GEORGE
134. MR GEORGE: Are you John Wilkinson?
135. Are you Director of Resources for Merseytravel?
Yes, I am.
136. If the Committee turns to B1 you set out your
qualification and experience?
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
Yes, my Lord.
138. Can you tell the committee the five main heads
of your evidence?
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
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
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.