Select Committee on Transport, Local Government and the Regions Minutes of Evidence


Examination of Witness (Questions 60-79)

MR JOHN HUGH REES

WEDNESDAY 23 JANUARY 2002

Mr Donohoe

  60. You said earlier that you would not want me to fly from Glasgow to the Mediterranean.
  (Mr Rees) Sorry; I did not say that. I said I would not expect you to go by train from Glasgow to the Mediterranean.

  Mr Donohoe: I certainly would not be doing that in the present climate, would I? Can I just go back to the point in terms of the White Paper itself. We rather missed the answer in that it does seem very cantilevered, if you read the White Paper, towards railways against air transport in particular. For those in the regions that are further away and have not got an infrastructure on the railways, that demonstrates that they will always have the problems that they do have in the region. This document looks very much as though it is written for the railways and it is written for central Europe and not for the regions.

Chairman

  61. I am sure he has got the point now.
  (Mr Rees) Yes, I have got the point. My interpretation is rather different from Mr Donohoe's. I would have thought that if we can transfer more passengers in the centre of Europe, as Mr Donohoe says, to rail services and offer them an equal, if not better, service by rail, they will then free up space over the congested airways of central Europe for passengers from Scotland who are flying to the Mediterranean, if I can continue to use that example. So this sort of policy recognises the need of peripheral areas to have improved services, and offers them this possibility by diverting people, where there is an alternative between air and rail, to use the railways.

  Mr Donohoe: A final point: you say on page 29 that companies cannot count - rail companies that is - yet the document itself does not have a page 28.

  Chairman: We will not expect you to answer that.

Mr Grayling

  62. On this point, whilst I understand the logic of the strategy you are outlining, it seems to omit the fact that there is an extremely rapid growth, not simply in this country, in low-cost airlines. There is a great battle taking place between RyanAir and Lufthansa in Germany, for example. Have you factored in the potential impact of low-cost airlines in setting out your plans?
  (Mr Rees) Yes, we have tried to do that because we have assumed in the forecasting models that are employed that there will be some reduction in the real cost of movement, and hence we have this increase in the base line of our forecasts of 90 per cent, nearly 100 per cent, in the period at which we are looking. This comes partly because of a natural increase in the demand for air transport and partly because air transport becomes cheaper. What we are trying to do is to reconcile that increase with the environmental problems. We are hoping that by a series of measures that we have put here, we can find ways to limit this increase to between 60 and 70 per cent, which is still a lot. It is far higher than any other mode of transport.

  Chairman: You have just said that the Community is not going to issue any Directive on the environmental side of it, and presumably is not going to pay either.

Mr Stevenson

  63. There was a section on road safety in the White Paper. There were two or three very important references, particularly to the enormous amount of people killed and injured on European Union roads. You talk about harmonising signs and signals on the trans-European network. What does the trans-European network mean in relation to that objective?
  (Mr Rees) The trans-European network was agreed by the Council of Ministers in the Parliament back in 1996. The White Paper does have some indications, I think it is for the railways, of what the trans-European network means. Effectively, it is a network of the major roads and railways in the Community carrying long-distance international business. We would really like to see a movement towards a harmonisation of signs in general but, as we have got this trans-European network, which is given a special status by the decision of 1996, we propose that we start with this network and hopefully, if this can be proven to be justified, then extend it to the rest of the network. In this way, we hope this would contribute the very ambitious target we put into the White Paper of cutting the number of people killed on the roads in the Community by 50 per cent over the period covered up to 2010.

  64. The main thrust of the White Paper in this regard is giving priority to exchanges in practice, but the White paper is then rather sceptical about the success of that policy in that the Commission reserves the right to propose legislation if there is no drop in the number of accidents. You make reference in the White Paper to the candidate countries. The White Paper then goes on to talk about three measures: checks and penalties; speeding and drink driving; and the harmonisation of signs at dangerous black spots. Are those three areas the limit of your ambitions in terms of possible legislation in the future?
  (Mr Rees) Ideally we would not wish to legislate if the Member States can be seen to be moving in the right direction, but here perhaps I should point out, if you look at the little book of statistics, that in 1999 there were about 3,500 who lost their lives in the UK on the roads (page 182 in table 3.61); in France with roughly the same number of population, about 59 million, there were about 8,400. We are looking at a difference of over double for the same sort of population. We interpreted that as implying that if we could learn from each other in the Member States, if we could use best practice, it should be possible to have a considerable reduction in the number of people killed without legislation. We reserved the possibility in terms of acting in locum parentis for tourists, for international drivers, to say that the Community, particularly as the Community now has certain powers in relation to road safety, if there is no improvement visible by 2005/2006, should think of the possibility of legislation to try to move towards common legislation, but we do not want to do that. If the best practice exchange of good ideas can bring figures down everywhere to the level of the UK or Sweden, which is even better, fine, then the Community will not need to act, but if this does not happen, then I think we should at least think of the possibility of doing something in terms of legislation, technical standards, et cetera.

  65. Could I ask a question about the railways? The White Paper refers to railway safety requiring Member States to establish wholly independent national bodies to be responsible for investing in accidents. The Commission would want to establish a Community-wide body to ensure co-operation between Member States possibly as part of a future Railway Safety Authority. Who would that future Railway Safety Authority be responsible to, if it was set up?
  (Mr Rees) Actually, this is one of the proposals that the Commission approved today, the creation of a Railway Safety Agency.

Chairman

  66. Can I ask you this, before you go any further: this is a package proposed by the Commission and what status does that have?
  (Mr Rees) This has a normal status.

  67. So is it the basis of a Directive or a Regulation?
  (Mr Rees) This is a Directive.

  68. This is a Directive which has been approved by the Commission. Has it been through the European Parliament?
  (Mr Rees) No, it was only approved by the Commission this morning and it will be sent to the European Parliament and the Council of Ministers I guess in the next two or three weeks when the translations are finished, and then it will probably be subject to the usual debate. The idea behind the Directive to create this agency - and agencies exist in quite a number of fields, as you know - is to try to bring together best practice in the railways in relation to safety, which would then provide a basis of technical expertise for the Member States and the Community in relation to new actions relating to railway safety. This would be the body that would be working with the national agencies in railways and organising discussions, exchange of best practice, et cetera. It would not have any legislative powers; it would purely be advisory and technical to try to see why there are differences in the occurrence of certain accidents in Member States and whether there is anything we can learn from that and ensure that there is a proper dissemination of information.

Mr Stevenson

  69. I am still not sure why the Commission feels it needs a European Union body actually to do what you have described, Mr Rees. After all, it is described in our advice - and I think you confirm this - as a European Union Rail Safety Authority. Is that the correct terminology?
  (Mr Rees) It is an authority or an agency, depending how you translate it.

Chairman

  70. Agencies have control, do they not?
  (Mr Rees) Yes, there will be a controlling body. The controlling body, if it follows the practice of other similar bodies, such as the Environmental Agency in Copenhagen, will have Commission representatives, national representatives, which will be the governing council of the body. Mr Stevenson, we are not proposing bodies simply to create bodies. It is basically that we think there is a need for a group of people, experts, to look at this question and they need a certain status, a certain structure. The Commission cannot do it: we are civil servants, for all the advantages and disadvantages of that.

  71. I did not know that.
  (Mr Rees) These people will not be civil servants; they will be experts, not like us. We are recognising our own inadequacies here and saying that there are complex technical issues here.

Mr Stevenson

  72. Pass me the handkerchief! At least one other member around this table and myself have spent some time in the European Parliament. Every time I hear someone from the Commission saying "We are not the experts. We need the help. We really do not know where we are going here. We need help and assistance", I can tell you that the hairs on the back of my neck stand up. The Commission are very expert at what they are doing and where they are going. What I am not clear about and the purpose of my question is: whilst the point about co-operation and co-ordination and all the rest of it is of value, I am still not clear about what the long-term purpose of a European Union Rail Authority would be.
  (Mr Rees) We could treat this in different ways. Mr Stevenson has been flattering the Commission civil servants by saying he believes we can do everything but perhaps we have certain doubts ourselves. We think that, with the development of a greater international aspect for railway services, there are clear differences in practice between the Member States' railways.

  Chairman: Mr Rees, I am going to stop you. I think we have the theory. What we want from you is a fairly straightforward answer.

Mr Stevenson

  73. I will change to another subject now and go back a second on road safety to something I forgot to ask. Does the Commission see the fact that in the UK we drive on the left-hand side of the road as a road safety issue?
  (Mr Rees) No.

  74. My last question is about effective charging for transport. I am looking at the White Paper here with the commitment or the intention to develop the following guidelines: harmonisation of fuel taxation for commercial users, particularly in road transport; alignment of the principles of charging for infrastructure use; and the integration of external costs. Would these be guidelines that you intend to develop or would they be legislation, either under the form of a Directive or a Regulation?
  (Mr Rees) There are two different points there. You are of course quite correct that the White Paper makes two points about taxing diesel. The first is that there are tremendous differences in the Community between the upper and the lower levels, with the UK having the upper level. This creates difficulty for the road haulage industry. We are recommending that there is initially a reduction in the difference and that we move towards harmonisation, a harmonisation above the average level. We make another point in relation to diesel, if Mr Stevenson allows me, that there is no common sense behind the differences in taxation that exist between diesel and petrol. Diesel is just as bad as petrol in terms of its effect on the environment and in terms of how we cannot see any justification for de-taxing diesel, in a way. That is the diesel issue. As far as infrastructure pricing is concerned, infrastructure pricing is a mishmash of taxes and prices which has developed over time without any real good intention behind that. We believe that, if we are facing a problem of a shortage of supply for infrastructure, we have to find ways to better use the existing infrastructure in the various means of transport. For this reason, we are developing a combination of guidelines in the form of a Directive which sets out objectives for the Member States but does not tell the Member States how they should achieve these objective. It is not a Regulation.

Chairman

  75. It tells you where you must go but it does not tell you how the hell you are going to get there?
  (Mr Rees) It helps you with some guidance.

  Mr Stevenson: I wonder if I may interject? I am taking up far too much time and I will be stopped in a moment. Of course my limited knowledge of these things clearly suggests to me that a Directive, even though it allows Member States to choose how they get there, has the force of law, whereas guidelines and recommendations do not.

Chairman

  76. Shall we let Mr Rees answer his own question?
  (Mr Rees) The Commission can issue guidelines but what we are intending to do here is issue guidelines in the form of a Directive which, and Mr Stevenson is right, is applicable by law. But, let me add that there are strong arguments in favour of this. A number of Member States are now thinking of changing their infrastructure pricing system: Germany is moving over to a kilometre-based system in 2003; the Netherlands is thinking of doing it; Austria is considering it; other Member States are doing it. What we are concerned about is a sort of Balkanisation of the systems across the Community which leads to problems, particularly for international road hauliers. We would like to see certain rules set down, which would include interoperability in terms of these charging systems; we have that in mind as well. We would not be imposing on Member States that they have to charge so many pounds, pence, euro, for their infrastructure charges, but there are certain principles that we would like to see set out.

Mr Stevenson

  77. I have two more questions. With fuel taxation for commercial users, particularly in road transport, there is a differential by definition between Member States, but would you accept the proposition from me that when you consider all the costs of operating commercial road transport, then those differentials are nowhere near as marked? What I am suggesting to you is that by concentrating on fuel taxation, you are only concentrating on one, albeit an important, element in the cost of operating commercial road transport. Inevitably, if the Commission goes down this road, it will have to look at other costs, such as employment taxation, if they are to be serious about harmonising the costs of fuel taxation for road transport?
  (Mr Rees) Mr Stevenson is right: obviously there are large differences in all the costs applied to the road haulage industry but in this particular case the difference seems to be between 1 and 100 per cent between the highest and the lowest in the Community. Particularly, as national road haulage is the fastest developing part of the market, it seems to us to be totally illogical to have such wide differences. Initially we would like to reduce the differences. We think that the way to go in the long run is to establish a single rate, but this would take time.

  78. The White Paper says that by taking external costs into account in a good many cases these harmonisation measures and taxation measures will produce more revenue than is needed to cover the cost of the infrastructure used. Then the White Paper goes on to say that the available revenue could be channelled into specific national or regional funds in order to finance measures. Who would be responsible, in the Commission's view, for distributing those funds for specific national and regional projects?
  (Mr Rees) I will not hide from you that here we are copying from the example of the Swiss where in Switzerland, to finance the new long railway tunnels, the Swiss have put on a road charge for vehicles crossing the country, which is creating capital for these projects to go forward. In the specific case Mr Stevenson is referring to, we would create enabling legislation, which would allow the Member States to do something like that, if they want to. It would not be Community money; it would be Member States' money. If, for instance - and I cannot think of a case in the UK - say, between France and Spain, crossing the Pyrenees where there is talk of a new tunnel, the Spanish and the French authorities create a system applying to the Pyrenees area where they ring-fence a certain amount of the revenue from tolls, et cetera, in this area and that goes into the funding of a new road or a new rail tunnel through the Pyrenees, then it is the Spanish and the French authorities doing it, not the Community.

  Chairman: I think it is clear at least where the Commission thinks it is going.

  Miss McIntosh: May I welcome Mr Rees to the Committee. Can I ask you what relationship this transport plan has to the Government's ten-year transport plan?

Chairman

  79. Of course, Mr Rees, that was the question we asked you at the beginning. Could we not take too long on that.
  (Mr Rees) It does not have any direct relationship, except that the UK Government is facing the same sort of problems as the Community.


 
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