Mrs Charles George and Miss Joanna Clayton

Thursday 30 January 2003

260. I then turn to the petitioners. There were initially three petitioners against the Bill, it is my understanding that the trade unions have withdrawn their petition albeit I understand there may be a slight technical hitch in that it was not signed by the right person, at any rate that has gone. The northwest regional council of the TUC it appears are not pursuing their petition and therefore we have present today the sole petitioner, that is the Merseyside and West Cheshire region of the Federation of Small Businesses.

261. The convention used to be that counsel in my position at this stage would read at great length the relevant paragraphs of the petition. With the committee's leave I do not propose to do that. The committee have the petition before them, it is in the bundle at A.28, page 123 and I do not do that, the points are there, but what I do intend to do is try and identify what seem to be the key points and what is our response. It may be that it transpires some of these points are no longer being pursued. I only mention them because they are in the petition.

262. The first of those is that the RPI is too generous an index for tunnel costs and that it is wrong to trigger a large annual surplus in this way. That is in paragraph 9 of the petition. Our response is a short one, the RPI does broadly equate to tunnel costs, namely wages and construction costs and it is desirable for transportation reasons to maintain the tolls in line with the RPI. I say no more than that. Over the last ten years in fact RPI has risen by 25.7% and tunnel costs have increased by 31.7%, actually tunnel costs have gone up a bit ahead of the RPI over the last ten years.

263. Secondly, they say that having an RPI linked increase would involve disregard for any financial, transport or social consideration and those matters militate against an increase or might do so. It seems to us that our proposed section 92 (c)(2), which requires us on each occasion to have regard to matters of an economic or social nature is the complete answer to that. It is not an automatic rise, we have the very provision. It is not right for the petition to assert there will be an annual rise every year without the consequences being considered.

264. Thirdly they say that rising tolls will have an injurious effect on small businesses, in particular in the Wirral, that is paragraph 13. As Mr Bates will demonstrate tunnel costs, even if increase at RPI rates, will remain a small part of total business costs. We know of no evidence that transportation costs are seen as a significant downside of trading in the Wirral. Indeed the evidence of Mr Bates will suggest to the contrary.

265. Fourthly, it is suggested that the RPI linkage will lead to a diversion of traffic to the overcrowded Runcorn Bridge, that is paragraph 11. As Mr Wilkinson will explain, previous rises in the Mersey Tunnel tolls have had very little impact on the flow using the Runcorn Bridge. In any event there is a proposal for a further bridge there and that bridge itself will be tolled in any event in all likelihood.

266. Fifthly, they say that hypothecation will subsidise public transport provision which will not be accessible to tunnel users, that is paragraph 14. I have already dealt with the matter, improved public transport will be a benefit to everyone in Merseyside and the question of non­user benefits, reducing congestion is a benefit to tunnel users.

267. Sixthly, they say that hypothecation will lead to the debt being paid off slower that would otherwise be the case. That is simply not so. The structure of the debt is that it will have to paid off gradually over time and the existence of surplus will not effect the contractual liability to pay off the debt. There is no question of postponing payment of the debt because of the surpluses.

268. CHAIRMAN: Is it not with the authorities control to pay the debt off earlier than contracted if it wished to do so?

269. MR GEORGE: If it wished to do so. As Wilkinson will demonstrate it will be at a huge financial penalty because a great deal of the debt was incurred at a time of very high interests rates which are fixed and any attempt to bring those forward will lead to more penal rates. There is no way that he can envisage he could ever recommend the PTA to expedite the payment off of those debts. The real life situation is that that simply will not happen, they will not be negotiating to pay off debts that will involve financial penalties.

270. CHAIRMAN: I understand the argument you are making but I do not follow the financial logic, that will become clear to me no doubt.

271. MR GEORGE: That will become very clear when you hear Mr Wilkinson.

272. In paragraph 15 they say hypothecation would lead to inadequate maintenance, declining usage and eventually the closure of the Queensway Tunnel because of level of tolls. We say there is no risk of that, we draw attention to the new section 91 (4)(b) in the Filled­up Bill which makes it quite plain that the first call on monies has to be tunnel operation and maintenance, so there is no question of those matters being ignored.

273. Seventhly, they refer to the conflict with directive 99/62: there is no such conflict.

274. Eighthly, they say that the diversion of funds to extraneous purposes will be of no benefit to the people of Merseyside. We think that is a misunderstanding of a former section 91 (3)(g) and it should now be perfectly plain from the amendment that all monies have to go into the fund, so there is no question of money going off to pay extraneous purposes.

275. Ninthly, they refer to the original principle that tolls should only remain in force until the cost of construction has been paid off. I point out under the present legislation there is no requirement to stop tolling and the reasons for maintaining the tolls and the provision for consultation when the debt has been paid off under the proposed section 91(5).

   276. Tenthly, they refer to taking away the power to object to an occasion of public inquiry, that is paragraphs 10 and 17 of the petition. I think generally it is recognised that present procedure is cumbrous and expensive and it causes delay an financial problems. We suggest that it is wholly appropriate that the right to object should be confined to a situation where there is a rise in excess of inflation.

277. Eleventhly, there is a serious allegation there is a risk of abuse by Merseytravel of its monopoly position in respect to all of the Mersey crossings, that is paragraph 17. There is no scope for abuse of a power because Merseytravel remains democratically accountable through the elected members and it remains subject to judicial review in the courts, therefore we say there is nothing in that.

278. CHAIRMAN: Mr George, if I could just clarify, it is not democratically accountable to the people who will be paying the toll.

279. MR GEORGE: Those people who have the vote. I accept that Merseytravel is not elected by tunnel drivers, that is acceptable, but in the area you have got five districts who are given statutory duties and they are, happily, in this country democratically elected, they have statutory duties and responsibilities and amongst those responsibilities are to nominate some of their members to the PTA. To that extent the matter is undoubtedly democratically controlled.