Examination of Witnesses (Questions 660-679)
MR CHARLES GEORGE QC and MISS JOANNA CLAYTON.
BIRCHAM DYSON BELL and MR JOHN McGOLDRICK examined
660. Point 17 relates to the monopoly situation
in relation to the road tunnels. Obviously Merseytravel control
all of the road tunnels under the river. I suppose that is what
one might expect anyway, but it is fairly unique in that it is
also owns the ferries and controls the under-river railway link,
so it will have a fairly wide, extensive monopoly. Public utilities
are generally subject to some form of regulation, as I think was
agreed this morning by the expert speaking for Merseytravel, but
the only control at the moment, particularly on the tunnels part
of that monopoly, is the existing part of the Act which says that
if the Authority wants the tolls increased, they need to justify
it to the Minister and if there are sufficient objections, the
Minister may decide that there needs to be an Inquiry.
661. Point 18 is the point about the fact that the
tunnels are almost unique in Britain in being in the centre of
an urban area. There are a few other tunnels that touch urban
areas, but there are no other river crossings with a toll on which
are so close to the centre of a conurbation.
662. Point 19, I think to a certain extent we have
already covered, is this question of the Authority wanting the
power to spend surpluses for other purposes which again appears
to be in part to cover the charges that they are already making
against the tolls. Going on to the bottom ----
663. CHAIRMAN: I am sorry to interrupt you
there, but it was pointed out by Mr George very early on yesterday,
but I think, with respect, your quote is from the Bill as it was
presented to another place, not to the Bill as it appears in this
664. MR McGOLDRICK: That is correct.
665. CHAIRMAN: It is a very small point.
666. MR McGOLDRICK: The wording is changed
slightly, but it is still there.
667.CHAIRMAN: It is germane, but it does
not say anymore, "and in such manner as it thinks fit".
It just says, "for other purposes".
668. MR McGOLDRICK: That is correct, my
669. CHAIRMAN: That is just for the record.
670. MR McGOLDRICK: Towards the end of point
19, there is the issue of the original Act for building the Mersey
tunnels, the one that comes up in Mr Field's constituency says
that the tolls should cease after 40 years at the latest. That
was amended in the 1980 Act, but even under that Act the tolls
would eventually reduce, not increase.
671. Point 20 is about the fact that there is a
reserve power in the Bill to use the old system and what that
in fact means is that an increase could be applied for which was
in fact above the increase that would be allowed according to
the RPI. Under the Bill, that in fact then means there is a new
and higher base that the RPI would be applied to, so in effect
the tolls would be permanently racked up for what might have only
been some temporary situation.
672. Point 21 is the point we have already been
through about the insulation works and the definition. Can I
make it clear that there is almost nobody who is opposed to spending
on noise insulation works. A lot of people think that it should
have been done a long time ago because obviously the people who
are going to benefit now are almost certainly not the persons
who were there when the tunnel was built.
673. Can I then turn to the submissions.
674. CHAIRMAN: Are there any questions from
my colleagues on this side, on the Petition? No. Please carry
675. MR McGOLDRICK: As I said earlier on,
I am not intending to go through this word by word. I will go
through it as quickly as possible. The first 11 pages are the
statement made by Merseytravel on the Second Reading of the Bill
in the Lords which, in italics, has been annotated with our comments
on it, but I am not intending to go through that. Pages 12 to
14 is the historical background to the Mersey tunnel tolls, again
I am not going to go through that in any detail other than that
it is aimed to set out the basic position which is that the original
way in which the tolls were going to be financed was that only
part of the cost was supposed to come from the tolls, and a large
part of the cost was supposed to come from the Corporations of
Liverpool and Birkenhead.
676. If I can then turn to page 15, there has already
been some mention of the fact that this is the second Bill. The
first Bill was introduced in 1999 and withdrawn in 2000. It was
pretty much the same as the present Bill, except, as has been
pointed out by Mr Field, it contained what a lot of people would
say was a privatisation measure, but, to use Merseytravel's own
words, paragraph 18, there would have been a concession for a
period of 25 years that somebody else would have been running
them and, as you see at paragraph 18, in return for somebody else
running them at that time, Merseytravel were expecting to receive
a premium, a one-off initial payment of £50 million. In
addition, as it says, point 19, to the £50 million they were
expecting to get annual rental payments in the region of £15
million a year for a period of 25 years. If my arithmetic is
correct, that is approximately £425 million that they were
expecting to receive. To a certain extent, what is now happening
is there is not a concession and an amount which may not be £425
million. I think the figure we went through this morning is close
to about £300 million would accrue to Merseytravel and basically
it is accruing to them from tunnel users.
677. Page 16 is trying to point out one of the difficulties
that we have as the User Association because basically we have
little or no income whereas Merseytravel are able to use the tunnel
tolls although it is not actually clear, on my reading of the
1980 Act, that that is a purpose that it could be used for, but
they are able to use the tunnel tolls to promote this bill and
to try and convince tunnel users by letters such as this, which
has gone out to all regular tunnel users using the fast tag system
that it is somehow in their interests that tolls are increased.
678. If you turn to page 17, there is then a supplemented
17A and 17B which is loose. One of the points that Merseytravel
have made is that the existing system for revising tolls is cumbersome
and longwinded. That may or may not be true but it begs the question
as to why that is the case. As I said earlier, we were initially
objecting to the Toll Revision Order which Merseytravel made about
a year ago. The period during which objections could be made was
four weeks and those four weeks ended just over a year ago. We
would have expected that it would not take all that long for there
to be a decision on an inquiry but what we found is that we had
to bombard the Department of Transport with questions as to whether
there was going to be an inquiry and, if there was not going to
be an inquiry, why not, and, if the inquiry was delayed, why it
was delayed. At page 17 are the eventual answers that we received
from them as to why the inquiry was delayed. They said that the
delay in announcing an inquiry was caused by a number of factors
including consideration of Merseytravel's application and the
comments made by others etc. In our view, the inquiry was delayed
because the Department of Transport were either acting inefficiently
or were dragging their feet.
679. One of the points that Merseytravel also made
yesterday was that if only one person objected to the toll increase,
there would have to be a public inquiry. If you turn to pages
17A and 17B, as I said before, we were pressing the Department
of Transport just to answer that one simple question of whether
there would be a public inquiry and you can see in the second
paragraph their answer which refers back to the existing Act.