Examination of Witnesses(Question 260-279)|
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the trade unions have withdrawn their petition albeit I understand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
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
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