Select Committee on Mersey Tunnels Bills Minutes of Evidence

Examination of Witnesses (Questions 520-539)



520. You mentioned that it was fairly important because it demonstrated a suppression effect which presumably meant that people living in the Wirral were discouraged from going to Liverpool city centre, whereas people from Liverpool, Knowsley and Sefton were not discouraged. Do you think it is reasonable that people in the Wirral should be suppressed in this way when people in Liverpool, Knowsley and Sefton are not?

(Mr Bates) As I said, I think what it reflects is the way in which behaviour is built up over time and where those people do a certain thing which is different from another. It is quite possible, as I have said, that they do not even necessarily realise that they are consciously doing it because this affect has been in place for a very long time. As to whether it is right or wrong, I guess it is simply a reflection of the situation that we are in now.

521. BARONESS McINTOSH OF HUDNALL: May I just open that point up a little bit because it appears that your evidence is tending to show a suppression effect which I infer from what you have said you regard as a good thing. You are not putting it forward to us in that way, but the impacts of that suppression on the whole have benefits which you have pointed out to us. Yes?

(Mr Bates) As I have said before and as we have discussed, there are good and bad effects of the suppression. I think what I am saying is that irrespective of whether it is a good or bad thing, it does exist and if we do not keep the toll in place we will release it and the effect of all that additional traffic using the tunnels will be far worse than the disbenefits of the suppression. This was the whole argument of the Department of Transport in the Dartford Crossing where what the Department said was congestion is a very bad way to manage supply because when an individual incurs congestion he only perceives the cost to himself. What he does not perceive is the wider costs both to all the other people on the road and also to the environment and the wider social pattern. If we have a tunnel, and that is the reality, and we have to manage its use because there just is not enough tunnel for everybody who wants to use it then price is the best way to manage that demand, not congestion.

522. I understand that is the point. What I am finding difficult to draw out from the evidence, yours and others, is whether the suppression effect is a natural effect which in some way the City Council and Merseytravel and others are seeking to underpin by the use of tolls or whether the toll is itself the suppression effect, and I think that this is potentially quite a significant point. I do not know what degree of evidence can be brought to bear on either of those things, but you are making a great deal of the suppression effect of the toll as opposed to what one might describe as the natural effect of a natural barrier which, as you rightly point out, is of historic long standing.

(Mr Bates) Sadly, at the end of the day one is never going to be really able to get to the bottom of that and measure it, I think we would accept that. I think our view is that the toll must be having an effect simply because experience elsewhere would tell us that behaviour in terms of travel choice is influenced by cost. Indeed our whole profession is geared around this concept that the price influences choice and behaviour and therefore it must be having a suppression effect and that suppression effect now, for better or worse, needs to be kept in place for the overall good of everybody, including the tunnel users.

523. BARONESS McINTOSH OF HUDNALL: Thank you. That is what I hoped you might say.

524. LADY SALTOUN OF ABERNETHY: Presumably there are other factors to take into account. If people living in the Wirral can find as good shops in the Wirral or possibly in Chester as they can in Liverpool they are not going to go through the tunnel.

(Mr Bates) Indeed. Again we come back to one of the big problems. The SACTRA Committee, when it looked at the whole issue of transport and the economy, said there is lots of theory to explain the cost influence of business decisions but in fact it is very difficult to identify it because there are so many other factors influencing it. At the end of the day it is inevitably going to be a judgment on this effect.

525. MR McGOLDRICK: Exhibit C6, which is three-quarters red, is it correct to interpret this as meaning that approximately one-quarter of tunnel users are travelling fairly long distances and that their origin or destination or both are outside Merseyside?

(Mr Bates) I am not sure you actually can simply for the reason that, for example, as you know, what one might call the contiguous built-up area of the Wirral extends a little bit outside Merseyside, for example, so they could be coming literately from beyond the official boundary of Merseyside into the centre of Liverpool, and to my mind that is not a particularly long journey so I do not think you necessarily can say that. Of course, if someone travelled from the far side of the Wirral in the red area and went all the way to the far side of Merseyside, say St Helens, one might say that is a long journey and yet that is within the red, so I do not think you can interpret it in that way.

526. You are saying even some of the journeys within the red area could be long journeys?

(Mr Bates) Yes. I do not think you can interpret it that way, I am afraid. Is that okay?

527. Can we move to C8. This is a Comparison of the Increase in RPI and Construction Cost Indices, and I think your argument was that the costs of the tunnels would be related in a significant degree to construction costs and therefore RPI would be less than the inflation that the tunnels might be experiencing and that would therefore require some economies to be made by the tunnels. Is that what you were saying?

(Mr Bates) No, not quite. I think all I was implying was that by definition the tunnel will include elements of construction work. Major refurbishment and major maintenance elements are often construction, particularly in things like the Road Construction Index, and clearly that goes up at a rate faster than RPI and therefore those elements of the cost will by definition go up faster than RPI and for those elements it would be wrong to assume that the RPI would simply accommodate those costs.

528. When you were looking at various elements of the existing tunnel costs, what account did you take of debt charges?

(Mr Bates) No, as I have just said, this relates to those elements with are just construction.

529. Yes, but you are implying here that the use of RPI would require economies to be made by the tunnels if applied to the overall basket of goods, as it were. So I am asking you when you arrived at that conclusion, what account did you take of the very large element of the basket which is debt charges?

(Mr Bates) Obviously I accept the fact that the debt charges will be going down at the same time.

530. Right, so how did you allow for that when you came to the conclusion that the RPI would require economies to be made in the tunnels?

(Mr Bates) No, what I said was that it encourages efficiency. I hope I said that by definition it encourages efficiency because ---

531. I took that to mean saving money.

(Mr Bates) No, I do not think it necessarily has to mean saving money. It just means doing things more efficiently. Sorry, if I implied it meant that, I misled you.

532. Right. If we can move to exhibit C11, you have got a comparison here of three crossings - Mersey, Severn and Dartford. I assume that part of the purpose of this is to show that the Mersey Tunnel Crossing requires potentially a public inquiry whereas the Severn and Dartford tolls go up automatically in line with the RPI index. Can you tell us what other crossings automatically go up in line with the RPI index?

(Mr Bates) These are the three major crossings in the UK, which is why I have selected them. All the other crossings in the UK are significantly smaller than that. There are no other crossings with even half the traffic these have. The honest truth is I could not tell you exactly the method applied to every single facility.

533. MR McGOLDRICK: You could not offhand name another one other than the Severn and Dartford where the RPI index applies?

534. LADY SALTOUN OF ABERNETHY: What about the Forth Road Bridge?

(Mr Bates) I have to confess I do not know so it would be wrong for me to say.

535. CHAIRMAN: We would have to be very careful taking at face value these three and only these three are the major crossings from a traffic viewpoint.

(Mr Bates) They are, I am sure.

536. CHAIRMAN: They certainly are three major ones, whether they are the three major ones, I do not know.

537. LORD BRADSHAW: The others like the Tamar Bridge are much smaller.

538. CHAIRMAN: The Forth Road Bridge is an interesting one.

(Mr Bates) Do not forget these are all double crossings. By definition they carry far more traffic than the others. They are double crossings and that reflect the fact that the demand is far greater.

539. I take your point. I think what you are saying is that there are two sets of tunnels in Mersey and there is one Dartford Tunnel and one Dartford Bridge.

(Mr Bates) Two Dartford Tunnels and one Dartford Bridge.

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