Examinations of Witnesses (Questions 220-239)
MR CHARLES GEORGE QC and MISS JOANNA CLAYTON, BIRCHAM
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?
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?
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?
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?
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?
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?
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?
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.
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.
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.
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
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?
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
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?
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
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
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?
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?
I have a reputation for prudence and caution, my Lord, therefore
I think that I have probably underestimated the traffic growth,
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?
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.