Mrs Charles George and Miss Joanna Clayton

Thursday 30 January 2003

160. CHAIRMAN: If I might interject there, Mr George, with respect, the comparison is not exact with Dartford, in that the face of the original Dartford Bill stated that the toll would be removed altogether and there would be no charge; whereas on the face of the original Mersey Tunnel Bill, it said that the toll would not be removed altogether, as in the Dartford case, but would simply be reduced to the maintenance and running costs.

161. MR GEORGE: As always, the Chairman is astute and absolutely correct. In fact, historically, in the original Mersey Acts the provision was exactly the same as at Dartford; in other words, once you paid off the debt, the toll was to go. It was realised a little bit earlier in Merseyside that that should not prevail, and therefore when one had the 1980 legislation, that original commitment went in the legislation, and one moved to the present position. It is simply a question of phasing. The point you made sure was entirely right; there is that distinction, but we got there by two stages in Merseyside.

162. At the end of the day, the question that this Committee faces is exactly the same as that which the Department eventually had to face at Dartford, which is this: are we going to reduce tolls or phase out tolls, or are we going to maintain them? In the case of Dartford, the Government carried out a considerable consultation exercise, and, as one would expect, almost all the motorists who were driving through favoured tolls coming down. However, after mature consideration the Government decided that far from that happening, tolls should continue and should continue to be linked to the RPI for the very reason that they did not want the crossings to clog up, and, as the Chairman pointed out, because that would provide a considerable sum of money, which could be put to a useful purpose.

163. The matter in the case of our Bill was conveniently expressed by the officers of Knowsley Borough Council, when they were reporting on the Bill. On this occasion, I will ask the Committee to look up A18, page 24, paragraph 5.4, the second sentence on page 24: "The existing requirement that the tunnel tolls should be reduced when the tunnels' debt is paid off could leave Merseytravel without the ability to use tunnel tolls as a demand-restraint mechanism. Worse still, such an arrangement could lead to serious cross-river capacity and congestion issues in the future."

164. Quite rightly the report goes on to deal with other arguments. In a nutshell the argument that prevailed was Dartford and we would urge that on the Committee in respect of this Bill.

165. The second reason for maintaining the tolls I have already adverted to, it is so that any surplus tunnel tolls can be hypothecated to the transport needs of Merseyside as identified in the Local Transport Plan, the subject matter of the third purpose of the Bill, to which I am going to turn next. Before doing that I should mention a new provision in the Filled­up Bill requiring that when the debt has been paid off Merseytravel should consult locally before determining whether to continue the high surplus toll revenues for public transport purposes. Can I ask the Committee go to A30, page 133.

166. MR JENKINS: Before you do, you have mentioned now on a couple of occasions that reductions in tolls would lead to congestion, what research has been done with regard to that price elasticity of demand in this area? Surely congestion itself is a price and therefore would reduce the number of users. What mathematical model has been done?

167. MR GEORGE: Mr Bates is going to deal with that matter, he draws attention to various comparisons in the movement from the Wirral and from other distances and how the tunnel is suppressing traffic movements. He also deals with the matters you are interested in and he will be delighted to be forewarned the question is coming, I am hoping to leave it to him. We will mark it up that he might answer your question when the time comes.

168. MR JENKINS: Thank you.

169. MR GEORGE: I was taking the Committee to page 133, it is the proposed new section, Section 91(5) on page 133, "The Authority shall not, at any time after all payments and repayment mentioned in paragraph (b)... above have been made", that is after the debt has been paid off, "apply any of the tolls for the purposes...unless---".

170. Then you will see under (a) that it has consulted users of the tunnels and the people of Merseyside when preparing its Local Transport Plan on whether it is appropriate that the tolls remain at a particular level or whether they should be applied for the purposes. Here we are looking to the future, we are looking just under 50 years on and there is a statutory guarantee, a consultation at that stage because the circumstances may be different from now and because it is right that that matter should be consulted on at that stage. That is a specific proposal which we invite the Committee to include in the Bill and which we find difficult to see how anyone could dissent from the suggestion that there should be that consultation at that time.

171. I then come on to the third purpose of the Bill, this is, I think, the most controversial part, that is to allow the authorities to use the surplus toll to improve public transport services in Merseyside. First of all, if I just explain how this comes about in statutory language. If we start with the Filled­up Bill once again and go to page 141, Section 91 as proposed. One will see in Section 91(3) "The tolls authorised by this Part of the Act to be demanded..." (a), (b) and (c) are very familiar, they were in the old Act, (d) is familiar, that is for the ferries. Then it is proposed that there be a new (e), and the Committee will find that in the rider apart at page 133, the very top of 133, "In making payments to the Authority's general fund for the purposes of directly or indirectly of facilitating the achievement of policies relating to public transport in it local transport plan, or for other purposes". That is a provision linking the expenditure to B for policies relating to public transport in the Local Transport Plan. It has been felt right there should be an expressive corporation of reference to the Local Transport Plan.

172. Before I go any further the honourable members may be wondering what are the "other purposes" which are mentioned. The classic example, the first matter is they can only be for matters on which the PTA can lawfully spend money, they will be going through the authority's general fund. The first obvious instance is the question of noise insulation work at the entrances to the tunnel, which I have just referred to. The second question is the question of dealing with the outstanding debts to the five authorities who funded the deficit in the late 80s and the early 90s, those at present are the only two other purposes I can have in mind. There is certainly no suggestion of the PTA going off for some form of junket and spending the money on those purposes. The intention is that the surplus be primarily used for the public transport purposes as contained in its Local Transport Plan.

173. CHAIRMAN: Just for clarity, Mr George, at the top of the "Rider Apart" it states page 3, line 38, in fact it is page 3, line 33 I believe.

174. MR GEORGE: My Parliamentary agent is nodding and once again are you one ahead of us. Thank you. Before I deal with the merits of this provision can I point out one thing, some people said, "why are you not spending it on roads?" There is a simple answer to that, the PTA has no responsibility for road works anywhere in Merseyside, save for the tunnel itself, that bit of the carriageway which is in the tunnel or its immediate approach roads, it is not a highway authority and therefore it would be thoroughly anomalous if Parliament was to be granting it powers to be spending it on roads elsewhere in the area, that is simply not its area and I make that matter entirely plain, perhaps that point has already been appreciated.

175. CHAIRMAN: Has the authority indicated what sort of public transport projects it would be seeking to support?

176. MR GEORGE: It has a substantial number of projects in its Local Transport Plan and I am going to call Mr Neil Scales who will point to the sort of projects the money will be spent on. It is difficult to say at this moment that in the year 2007, because remember these surpluses are going to be there, that that money will be spent on that project because it may be that that project will have already been funded by then or that project may no longer be thought a good project at all. He will be able to give an indication of the sort of projects to which the money might go, both rail and bus schemes and indeed the Merseyside Tram scheme, so a variety of schemes.

177. MR FIELD: Do you feel it is right through this mechanism that receipts, even after 2049, from the tunnel can be used to pay for general transport improvements for the benefit of many people who may not use the tunnel at all. Do you think that is a fair use of the taxation system? I am not asking your personal opinion, your opinion representing as the Promoter?

178. MR GEORGE: The Promoters are entirely happy or they would not be promoting it, subject only to this, on reconsideration they have thought it right that there should be public consultation at that stage and that the matter should be determined through the Local Transport Plan. If the Local Transport Plan had no proposals there would be nothing to spend it on or if in public consultation it becomes plain this would not be appropriate the matter will have to be re­thought. Subject to that, yes, it is thought that, frankly, if one is going to deal with what are already huge and are going to be enormous problems on our roads by 2050 a great deal of money is going to have been spent and continued to be spent on public transport, because unless one can provide adequate public transport the chances of persuading people to make fewer journeys by road ­ I do not go so far as to say give up their car ­ would be very slight. At present the PTA does believe that and that is entirely consistent not only with all its own policies but with all of the policies of all of the authorities that the more money that can be spent on public transport improvements in the region the better. The same view is shared by the other regional agencies.

179. MR FIELD: On the basis that members of the PTA, as you explained in the first few minutes of your exposition this morning, are elected councillors, there is potentially a danger that this whole issue of surplus funds, and they may be very substantial funds in the second half of this century, could be used as something of a political football where particular political parties try to suggest a windfall should go in one direction or another. Is that a danger the Promoters have thought through?