Select Committee on Mersey Tunnels Bills Minutes of Evidence

Examinations of Witnesses (Questions 220-239)


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

220. The second matter is, if one looks at the end of the period to, I think, the end of 2003/04, you are not very far away from where you would have been if you had had the RPI, in the sense, therefore, that if you did have an RPI you would not be very different. Is that correct?

(Mr Wilkinson): I do not think so, my Lords. I think the position is more accurately depicted on my earlier exhibit 24B. If tolls had kept pace since June 1971 they would, by now, have been 135p.

221. If we then move on to page 80, does this show how you envisage the RPI toll increase is likely to work out in terms of what the actual tolls will be over the next 20 years on the assumption, at the bottom of the page, assuming a 2.5 per cent inflation from November 2004?

(Mr Wilkinson): Yes, it does, my Lord. I have taken as a base on this occasion the base specified in the Bill, which is the last toll rise in November 1999. I have taken the Retail Price Index for general prices at that point in time, charted it through to November 2003, reflecting the actual movements in prices, and estimated beyond that what I think would be the increase. The general allowance for an increase is 2.5 per cent long-term. The "Determined" column on this table then shows the resultant toll. This shows, for example, that if the trigger had been in existence already we would have already justified a £1.30 toll.

222. Three matters on that table. First of all, in the column "Determined", about halfway down there appears the figure 171.1, which looks a bit of an anomaly. Can you correct that?

(Mr Wilkinson): I do apologise, my Lords. That is my fault. I should have checked the figures. It should be 177.1.

223. Secondly, we see here that the increases are always by 10p, and is that because for administration reasons it is very complicated to collect tolls which are in terms of 5p. Therefore, if you are in fact entitled to a mere 5p rise you would not raise it, you would wait till it got to the 10p?

(Mr Wilkinson): It is our clear preference, my Lords, to have tolls in round ten pence pieces. Collecting five pences and copper is a complete nightmare, and is not worth thinking about. It would therefore be our intent to always keep to tolls in round 10p units.

224. B.26 is a little complicated and does not have to happen under the Bill, but does show what you intend to happen under the Bill, which is that you intend to assimilate the charges for Class 1 and Class 2 vehicles and for Class 3 and Class 4 vehicles. Have I correctly summarised that?

(Mr Wilkinson): That is absolutely right, my Lord.

225. Mr Wilkinson, this table would defeat anyone except the most skilled interpreter, and it may not be the most important point so do not let us spend very long on it. Could you just take what is happening to the Class 1 and the Class 2s and explain in a few sentences to the Committee?

(Mr Wilkinson): The first column in there under "Traffic" is the current level of traffic. What we are hoping and planning to do is reclassify Class 4 vehicles with Class 3 vehicles, so we declassify them. That means that the 372,000 vehicles presently paying a Class 4 toll would pay the same toll as current Class 3 users. In so doing I have assumed there would be a growth in the volume of that traffic. I have assumed a 10 per cent growth, so I have assumed we will get an extra 409,000 vehicles in the Class 3 category. Similarly, I have assumed that the 708,000 Class 2 vehicles, when they are reclassified as Class 1 vehicles, will again result in an increase in traffic. The net result is an increase of 108,000 in total traffic, but from the point of view of many of the commercial users of the tunnels, they would be paying tolls of roughly £1 per journey less than they are currently paying.

226. Then I think we can turn on to page 82, 27A. It is headed "Potential alternative traffic growth". Are you here doing your best to see what effect on suppressing traffic growth the Bill would have, particularly if accompanied by the sort of revision of toll structure which we have just been looking at at page 81?

(Mr Wilkinson): That was my intent, my Lords, in this exhibit - to compare it with the traffic projections which I put into exhibit 21A and compare that with a traffic projection, assuming that the tunnels Bill is approved, with an initial resistance to a toll rise and with toll rises at intervals thereafter. I am convinced that the traffic in 25 years' time will be in the region of almost 4 million less vehicles per annum going through the tunnels compared to current legislation.

227. Pause a second, if the Committee would kindly go back to page 74, B21 A and to the column on the right­hand side which says "total traffic" there they recall the figure of 32.1 million there and the 30 million limit was breached in about 2015.

(Mr Wilkinson) That is right, my Lord.

228. That has been brought forward on your B27, page 82 in the first column of figures we see that same 32.1 at the bottom and the 30 million limit being breached in 2015, whereas if we go the Tunnels Bill column we see that even by 2028/29 you still only have a total number of vehicles through the tunnel of 28.3, in other words you have not reached that 30 million threshold.

(Mr Wilkinson) That is entirely correct, that was the intent.

229. If we then turn over to page 83 that is exactly the same matter put into a graph form. We can see that in 2005/06 there was that fall off which you explained earlier and at the end of the day you have approximately that four million difference when you get to2028/29 between the two lines.

(Mr Wilkinson) I am not sure I totally explain the loss or reduction in the traffic due to the toll rise. The presumption is the first toll rise triggered by the Bill would be a 20 pence rise, increasing car tolls from £1.20 to £1.40 we would encounter resistance as a result of that toll rise hence that drop in traffic. What many users will do is to switch from cash paying to paying their tolls using the Fast Tag system, the Fast Tag system is 10 pence cheaper than the cash paying toll so users who choose to adopt the use of the Fast Tag will only pay a ten pence rise in their toll, even so I do anticipate a drop in traffic.

230. Go back to page 80 where you illustrated the RPI toll increase we can see in increase from £1.20 to £1.40, can we not, that is that relatively large jump at the top of the page.

(Mr Wilkinson) It does cover a period of four and a half years or so.

231. BARONESS McINTOSH OF HUDNALL: May I just ask if you can tell us very briefly, is the methodology you use to predict the fall off in usage as a result of these increased tolls a methodology which is accepted and used elsewhere or is it your own? I do not want you to take us through what it is but if you could give us some idea of it credibility?

(Mr Wilkinson) I have never seen a naational methodology that is capable of application in these circumstances. What I have seen over 30 years is the sort of resistance which I encountered to toll increases in days gone by, this is therefore based on local experience

232. BARONESS McINTOSH OF HUDNALL: A retrospective analysis.

233. PROFESSOR THE LORD BRADSHAW: Has the fall in traffic been predicated on a particular rise in rail fares and has that been taken into account of in the analysis?

(Mr Wilkinson) As an individual factor it has not been taken into account. The reality with bus and rail fares is that they increase annually at least in line with inflation and in the case of bus fares on commercial services some multiple of inflation. That has been the experience on Merseyside since 1986. One of the issues that is of concern to us is that tunnel tolls have not altered since November 1999 and yet fares continue to go up. Using public transport as an alternative just keeps goes up and up and up.

234. You mentioned commercial bus fares, are the rail fares or other bus fares within the remit of the Passenger Transport Authority?

235. (Mr Wilkinson) The fares on supported bus services are entirely within the remit of Merseytravel, they only cover 20% of services across Merseyside. The fares on local rail services are partly influenced by us but very largely under the control of the operator of Mersey Rail Electrics. The terms of the concession we have with the operator allows that operator to increase fares in line with RPI at annual intervals but to arrange that using a basket of fares approach. It is essentially an overall control vis-à-vis the operator

236. Is there a proposal to change the regulations on Merseyside?

(Mr Wilkinson) There is an intent, as I understand it, on the part of the Strategic Rail Authority to increase the limit on rail fares from RPI minus to an RPI plus basis in due course. That will not apply to Mersey Rail Electrics because it is under the terms of the local concession, not under a franchise agreement. It will apply to the city line of the Mersey Rail network.

237. MR GEORGE: Mr Wilkinson, if what happened historically continues, that is that bus and train fares tend to rise above the cost of motoring does that mean that the figures you have shown for traffic growth in both scenarios will be greater than you have shown?

(Mr Wilkinson) It is possible that I may have underestimated the traffic growth, my Lord, yes. I feel a little uncomfortable with this, there are aspects of this which Mr Bates intends to refer to in his evidence. I think he is better equipped than I am to comment on this issue.

238. There is no possibility, is there, that your figures may be over­estimates, they may however be under­estimates?

(Mr Wilkinson) I have a reputation for prudence and caution, my Lord, therefore I think that I have probably underestimated the traffic growth, yes.

239. Could we then come to page 84, financial projections with the Tunnel Bill. Just as you put in with only one case for the existing legislation here again you only put one in for the Tunnels Bill and you could have put in ten for each. There are obviously simplifications and can be explored for limitation. This is the comparable table to B21 A looking at the position with the Bill and the RPI index, is that right?

(Mr Wilkinson) That is right. I have used the same input assumptions, the only difference between the two is the pattern of toll rises and the traffic resulting from them, either toll rises in line with provisions of the Bill or the alternative, as I indicated earlier, was frozen tolls for 30 years.

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