Examination of Witnesses (Questions 520-539)
MR CHARLES GEORGE QC and MISS JOANNA CLAYTON.
BIRCHAM DYSON BELL and MR JOHN McGOLDRICK examined
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
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
(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
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
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
(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.