Examination of Witnesses (Questions 1-19)|
12 JANUARY 2005
Chairman: Good afternoon
to you, gentlemen. We have one small piece of domestic housekeeping
before we begin, and then I shall give myself the opportunity
to welcome you. Members having an interest to declare?
Ian Lucas: Member of AMICUS.
Mr Stringer: Member of AMICUS.
Chairman: Member of ASLEF.
Mr Donohoe: Member of the Transport and
General Workers' Union.
Mrs Ellman: Member of the Transport and
General Workers' Union.
Miss McIntosh: Member of the Public Policy
Committee of the RAC Foundation.
Q1 Chairman: Gentlemen,
you are most warmly welcome this afternoon. May I ask you firstly
to identify yourselves for the record?
Mr Turner: My name is Richard
Turner, Chief Executive of the Freight Transport Association.
Mr King: I am Roger King, Chief
Executive of the Road Haulage Association.
Professor McKinnon: Alan McKinnon,
Professor of Logistics, Heriot Watt University, Edinburgh.
Q2 Chairman: Thank you
very much indeed. Did any of you have anything you wanted to say
before we begin?
Mr Turner: Madam Chairman, we
agreed beforehand we did not want to make an introductory statement
other than just to emphasise a point which might help the discussion
subsequently, that lorry road user charging, which I am sure we
will discuss, is more about how we apply taxation to lorries,
and road pricing, which is the main theme of this inquiry, is
more about how we manage demand and how we raise money to pay
for infrastructure. We wanted to apply that distinction before
Q3 Chairman: I think that
is helpful, I have no doubt we shall be asking you about both
of those. Before I come to the Professor, can I ask you, Mr Turner
and Mr King, do you agree it is impossible to build our way out
of the congestion problem without limiting traffic growth?
Mr Turner: I agree that road building
is not going to provide the ultimate solution. We do need to do
some more road building but ultimately we do have to look at ways
of managing demand.
Mr King: I think, Chairman, we
can go a lot further towards providing infrastructure. We have
never really predicted and provided, because predictions have
always been wrong and we have never attempted to provide. It would
be wonderful to think we could have a system of predicting and
providing. Whilst I would say we do need to improve the existing
infrastructure with additional build on motorways, attention to
pinch-points within the system, ultimately with unbridled access
to the roads by all those who want to use them we will have to
find another way of being able to control traffic flows.
Q4 Chairman: Do you have
a kind of scale you could give us?
Mr King: I would think technically,
as we understand it, it would be difficult to see a system of
road pricing for everyone to be introduced within the next ten
or 15 years.
Q5 Chairman: I am thinking
in terms of road building. What size would the road building programme
need to be in your estimation?
Mr King: In our view, a fairly
modest exercise in road building. That would mean widening some
of the existing motorways as well as improving road junctions
within the strategic road system. One would want to distinguish
between the needs of the strategic road system run by the Highways
Agency, which needs a rolling investment programme and not one
which stops and starts, and all the roads run by local authorities
where obviously it is in their gift of decision as to how they
invest in those.
Q6 Chairman: Surely if
you widen these strategic points, particularly the pinch-points,
that space would be occupied almost immediately by private cars,
which would not benefit the freight industry, would it?
Mr King: I think one needs to
be very careful in putting that argument forward because whilst
traffic growth is increasing nevertheless the capacity of the
road with an additional lane to accommodate even a third more
traffic is quite considerable. You have only got to look at some
of our motorways which were built as two-lanes in the late 1950s
and were widened to three-lanes in the mid-1960s to see that they
have stood the test of time for nearly 40 years. So it would not
be unthinkable to suggest another lane to bring them up to four-lanes
would last another 40 years.
Q7 Chairman: What is the
biggest problem? Is it the average travel time or the unpredictability
of trying to travel on congested roads?
Mr Turner: For industry, predictability
is important. Speed is not the issue, predictability is important.
The loss of productivity because of congestion for industry is
currently estimated to be in excess of £20 billion a year.
That is just unacceptable in a modern economy, and I know of no
other modern economy that has congested inter-urban roadsurban
areas are differentwhich are not planning to widen and
improve them to cope with that. That is what I believe we should
do. That is what the RHA, the FTA and the motoring organisations
put forward last year as a solution in terms of widening our key
trade routes by an extra 12 feet. That would mean that over about
a five year period an extra £1 billion would have to be spent
on road building and that would, I believe, get us into a position
where we could afford to wait for a solution that managed demand,
and that would keep our economy moving in the meantime.
Q8 Chairman: Are you really
saying some sort of road pricing is inevitable as a management
Mr Turner: Personally I believe
it is, because I believe we will get to the stage where we need
to modify behaviour and encourage people to behave in a slightly
different way, and price I believe is the only way we are going
to do that, but it is not possible in the short-term. It is not
possible in the short-term I believe partly because of the politics,
because I do not think any of you would want to go into a general
election saying, "We are going to charge the motorists more
to use roads", and secondly because of the technology, which
is just not there. Whilst you might think it is there, just think
of the spectre of trying to retrofit 28 million vehicles with
it; you just could not do it. The road pricing feasibility study
with which I was involved with the Department for Transport and
many others looked at this issue and said the only way it would
be practicable to apply road pricing to all vehicles would be
if you allowed time for this equipment to be built in by the manufacturers
at the start.
Q9 Chairman: How short
is the short term? Is it ten years, 30 years? What is your short-term?
Mr Turner: I think you are talking
up to about 2015, 2020.
Q10 Chairman: Do you agree
with that, Mr King?
Mr King: I do indeed. I think
the systems themselves have still to be technically evaluated.
It is one thing, as the Government intends to do, to levy a road
user charge on 425,000 heavy goods vehicles, it is entirely another
to levy a charge on 28 million other road users which will have
sophistication, variable time charging, zone charging, regional
charging, added to it. So we would suggest the technology is still
yet to be devised. It may be available in two, three, five years'
time, in which case vehicles need to start to be produced with
the system in for switching on ten years later.
Q11 Chairman: Do you have
a comment on that, Professor?
Professor McKinnon: Merely to
add that it seems to me once you extend electronic road pricing
to all categories of traffic, with 28 million vehicles covered
the collection costs are going to be huge relative to the current
systems we have for collecting tax from transport, namely fuel
tax and vehicle excise duty. There are figures like collection
costs of £5 billion as opposed to the total revenue of £9
billion, so the net tax then is a lot less than we currently get,
and I simply wonder how we would make up the shortfall in taxation.
Q12 Mr Donohoe: If national
road pricing was introduced, should the tariffs be fixed locally
Mr Turner: Are we talking about
national road pricing for all vehicles?
Q13 Mr Donohoe: Yes.
Mr Turner: I think they have to
be fixed by the people managing the road. There is a case for
local pricing in urban areas, but if you are putting in pricing,
and if the purpose of putting in pricing is not about raising
money but is about managing demand, then the person who should
be fixing the tariff should be the person who is managing the
demand. That would be nationally for some roads and locally for
others, but clearly they would have an impact on one another.
Mr King: I would add to that that
the unpredictability for the road haulier in knowing what the
journey is going to cost, because they are going to have to understand
dozens and dozens of different area pricing schemes and that is
going to make the operation of the transport sector in the UK
a very difficult challenge indeed. Understanding that, what does
that do to the UK's productivity and competitiveness in Europe
if you cannot get an understanding of what your transport costs
are going to be?
Q14 Mr Donohoe: Do you
think part of this charge should be peak-period charging as well
as charges outside the peak hours? If there was variance when
you were sitting on the road, that would help you, would it not?
So part of this should be off-peak tariffs as well as peak tariffs?
Mr Turner: A reduced off-peak
tariff as well as a peak tariff?
Q15 Mr Donohoe: Yes.
Mr Turner: It has its attractions.
Obviously if everybody was subject to the same pricing regime,
cars as well as trucks, obviously taking account of the weight
of the vehicle, then if at peak periods other motorists could
be priced off the road, road haulage operators might be prepared
to access those roads at that time of the day in the knowledge
they were not going to be held up in congestion. But one wonders
at what level that charge would have to be to get commuters off,
say, the M25 in the morning and evening. It would probably be
almost a penal rate, in which case paying that sort of high tariff
is not something anyone would particularly welcome.
Q16 Mr Donohoe: Does the
Professor want to add something?
Professor McKinnon: The issue
here is whether we would be varying tolls just for trucks or for
all categories of traffic. I think it would be quite wrong to
impose congestion charging on trucks in isolation without doing
it for all categories of vehicle. For one thing, road hauliers
would feel that if they are paying premium tolls at peak times
they might like something in return for that, namely freer flowing
traffic, and that will never be achieved until the same charges
are imposed on cars.
Q17 Mr Donohoe: How successful
has the new M6 toll road been for your members, Mr King?
Mr King: I do not think it has
been successful or unsuccessful. The take-up by road hauliers
on that particular road was negligible when the rate for one journey,
for the 27 miles or so, was set at £11. Now it is reduced
to round about £6, the take-up has been a little more significant.
I do not think we can learn a lot from the M6 toll because, right
from the early stage, no estimations were ever made about traffic
flows, about the percentage of trucks which were travelling from
the South East to the North West which were not in the position
of dropping off goods in the middle of the West Midlands conurbation
and then picking up more goods to go up on their journey north.
There are very few through-traffic figuresI know because
I asked the question in the late 1980swhich had never been
kept or arrived at by the Department of Transport to identify
the traffic flows around the West Midlands conurbation, because
if there had been a significant case for it we would have seen
the road being used far more than it is at the moment.
Q18 Mr Donohoe: Notwithstanding
that, have you had feed-back from your members? Have you done
surveys of your members to establish whether or not they think
it advantageous to have the road, whether they still use the original
M6, whether that has improved? Have you had any feed-back?
Mr King: The feed-back is that
motorists are using the M6 toll, thus reducing the congestion
on the existing West Midlands link, which road hauliers continue
Q19 Mr Donohoe: That has
been to your advantage?
Mr King: That has been to our
Mr Turner: From my members' point
of view, they see this as a marvellous new road asset. No mistaking,
the West Midlands was an absolute mess until this road was opened
and now it is not and is much better. How long it took and whether
or not it should have been constructed from private money from
Australia is another question.