Select Committee on Mersey Tunnels Bills Minutes of Evidence

Examination of Witnesses (Questions 480-499)



480. What is significant about the figure we see for Wirral as compared, for instance, with Kirby or Liverpool suburbs?

(Mr Bates) This is a related issue related to how behaviour has changed over time. Again what we are seeing here is what is sometimes described as the "two-way road effect" which was identified by the Standing Advisory Committee on Trunk Road Assessments when they looked at transport and the economy. In fact they identified the reverse of this, but what they identified was that when an area is inaccessible, and then a transport scheme comes in to improve the accessibility, it does not actually always push economic activity into the area, but it can actually suck the economic activity out. A good example which is often quoted is the A55 in north Wales where previously Bangor had been very remote, had a lot of local businesses there, and then as soon as the A55 made it accessible from Chester, in fact all the local businesses moved back to Chester because they could still access the market in Bangor without actually physically being located there.What this is in many ways showing is the reverse effect. What this is showing is that in fact the difference between the red and the green bar can be simplistically assessed as the amount of money that is spent in each area. What it is showing is that in the Wirral, a lot of money is spent in the Wirral, so basically the economic activity is being kept within the local economy by the barrier of the river, whereas if one looks at somewhere like Kirby, for example, which is a similar distance out or one of the Liverpool suburbs, a very large amount of expenditure goes into Liverpool city centre, so this is the way in which actually the toll distorts in reality the economy, but to the benefit of Wirral businesses. If the barrier was removed, in fact what would happen is that a lot of economic activity would inevitably get sucked into Liverpool as the bigger centre with more facilities.

481. We know that the Liverpool Chamber of Commerce were quite enthusiastic that the toll should come down. Do you have any observation on that?

(Mr Bates) Yes, inevitably they will because as a larger centre, they know that they can out-compete in attractiveness terms to competing surrounding areas if the toll is removed.

482. MR GEORGE: If we then turn to C14 -----

483. CHAIRMAN: Sorry, but there is an implication in what Mr Bates has just said, which is that the tolls work to the detriment of the people of the Wirral, and I am not trying to state a case, merely it is a sequel to what you said, but if the Chamber of Commerce within the centre of Liverpool is all for lowering tolls and our witness said that the tolls have the effect of holding business within the Wirral, does it not follow that that is "to the detriment" of the people of the Wirral because they are prevented to that degree from getting into central Liverpool?

(Mr Bates) This is where the whole issue of social equity and other issues start to come into effect. If you believe that simply the free market performances will inevitably deliver the best solution, then that would indeed be the correct assessment. I would suggest that in fact a lot of people want local services and local facilities close by and indeed that helps create this local economy and gives vibrancy to the local economy, so there is both a disadvantage but also an advantage. It is a balance.

484. LORD BRADSHAW: It depends whether you are a consumer of services and goods or whether you are a producer. If you are a producer on the Wirral, the toll is a good thing because it helps businesses there.

485. CHAIRMAN: Yes, absolutely.

486. LORD BRADSHAW: On the other hand, we know very well that many people go to Chester to shop because it is a nicer place and many other reasons.

487. CHAIRMAN: The only point I was trying to make was a continuation of the argument which Mr Bates was pursuing. I am not saying I am in favour of it or I am against it. I am merely saying that logically that is the conclusion to which you come.

(Mr Bates) Not always. Do not forget that all the consumers of products are not necessarily accessible to the degree that they can take advantage of this facility as well. This is where I said the social equity issue comes in as well because by definition local facilities tend to be to the benefit of people with less accessibility, lower incomes, etcetera.

488. MR GEORGE: It is all quite complex and becomes immediately apparent. Now let us turn to C14 entitled "Distribution of companies across sectors in Merseyside". The Committee can see from the graph that the companies are split down into various sectors. We can disregard extraction and agriculture because that is really tiny and then we see retail and other services, manufacturing, construction and distribution, health and other public services. One's first reaction when looking at the table is to say that they are all very much the same. In particular, when you look at the Wirral, it looks very much the same as the others. What comment do you have on that?

(Mr Bates) I presented this to reemphasise the fact that the region is very similar in terms of the way the districts break down; there are a few slight differences. Sefton has a slightly higher level of what are called other services, you can see the pink bar, Knowsley and St Helens tend to have slightly higher levels of manufacturing, construction and distribution, but broadly speaking the region is very similar in terms of its distribution of businesses and the Wirral is not different.

489. So far as the final three exhibits, I think they all summarise material in a survey of businesses in Merseyside which was carried out by Steer Davies Gleave for Merseytravel not merely in connection with this Bill but in connection with a whole variety of transportation projects in Merseyside. Is that right?

(Mr Bates) That is correct. Obviously Merseytravel see themselves both as a transport operator and also as a regeneration partner and they are very keen to understand how their activities can act to the benefit of the region's economy.

490. How many companies did you survey?

(Mr Bates) It was 161 companies.

491. How many of those were in the Wirral and in Liverpool?

(Mr Bates) There were 36 in the Wirral and 33 in Liverpool. They were distributed around the districts to reflect the distribution of businesses across the districts.

492. So far as the methodology you used, was it a fairly standard methodology or was it tweaked in any way?

(Mr Bates) No, it was a fairly standard economic assessment study.

493. Your comments on Exhibit C15?

(Mr Bates) One of the questions we asked business was the importance of transport costs to the operation of that business because obviously we were interested to understand the contribution we were making to it. As you will see, only 13 per cent of Wirral businesses said transport costs were very important, which is broadly in line with Liverpool, Sefton and Knowsley. The big difference was St Helens, the district furthest from the tunnel, where a lot more businesses saw transport costs as important to their business.

494. What conclusion do you draw from that?

(Mr Bates) The conclusion one draws from that is that transport is only one of a whole range of issues that affect business costs and business operation and is often relatively important relative to some other issues around employment catchments and other issues.

495. C16 and C17 are a pair of exhibits, are they not, in which you were asking companies about the strengths of their business location and the weakness of their business location? Which of those should we concentrate on?

(Mr Bates) I would suggest the weakness one is probably the more interesting.

496. C17?

(Mr Bates) Yes. I think the key findings here are that almost half of the businesses we spoke to across Merseyside said they did not feel there was any weakness in their business location at all and then the most important weakness that did come across was actually the availability of parking. What you will also see, for example, is that in the Wirral we get a slightly higher pale yellow bar under site size and indeed one of the feedbacks that we were getting from businesses on the Wirral was that they were struggling to find sites of an appropriate size.In Liverpool, again if you look at the bars, you will see that social problems came up quite high and also the age of the properties was an important business location weakness that came through. Fundamentally, transport was not really coming across and of the 131 companies we interviewed, only one company mentioned the tunnel.

497. And then if we turn, finally, to C18 on business creation rates in Merseyside.

(Mr Bates) I have presented business creation rates. This is VAT registrations minus VAT deregistrations. It is simply an interesting measure of the vitality of an economy. The general theory goes that the more vital an economy the more businesses are being created and if an economy is in recession then you might find negative numbers. The simple message is that the Wirral is very comparable to all the other regions, apart from Knowsley, in Merseyside.

498. Mr Bates, that concludes your exhibits. Are there any other comments you want to make before you conclude your evidence?

(Mr Bates) No.

499. MR GEORGE: Thank you.

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