Mersey Tunnels Bill

HL Deb 09 February 2004 vol 656 cc1004-32

8.8 p.m.

Lord Smith of Leigh

My Lords, I beg to move that this Bill be now read a second time.

The Bill is promoted by Merseytravel, the Passenger Transport Authority (PTA) for Merseyside with a duty to operate the two tunnels linking Liverpool with Birkenhead and Wallasey. It may surprise noble Lords to know that these days Merseytravel only provides the services of operating and managing the tunnel. The PTA is composed of 18 elected councillors appointed by the five Merseyside local authorities in proportion to their size. The Bill is supported by all five local authorities, including Wirral.

The Bill seeks to amend the County of Merseyside Act 1980, which currently establishes the powers to maintain the tunnels, to collect and raise tolls and to apply tolls to meet debt repayment as well as maintaining, operating and refurbishing the tunnels. The current procedure for raising tolls requires a public inquiry, and is cumbersome and costly. In order to justify an increase, the tunnels must effectively be running at a financial deficit, which falls on the council tax payers of Merseyside to subsidise. Those arrangements surely are unacceptable.

The Bill seeks to enable the authority to raise tolls by inflation annually. Any increase above inflation would require the Secretary of State to approve the exceptional circumstances. The principle of maintaining the real value of tolls mirrors the process in the Dartford-Thurrock Crossing Act 1988, which is a comparable estuary crossing. That Act was promoted by the then government.

The Bill also gives freedom to Merseytravel to apply any future surpluses to support public transport services across the county. It removes the requirement to reduce tolls when existing debts are repaid, probably around 2048–49. The final provision is the least controversial. Properties adjacent to the Kingsway Tunnel are in a legal hole because no one has the power to install noise insulation. The Bill will provide Merseytravel with such power.

Refurbishment costs on the tunnel are expected to rise. It is like all of us; we require more attention as we grow older. Investment in safety will also increase as standards have changed following horrific accidents in road tunnels across Europe. In 2002, Merseytravel commissioned a report, Eurotest 2002, and, as a result, is committed to increased expenditure on safety. A European directive on tunnel safety is anticipated during the next 12 months. Merseytravel would intend to raise safety standards in its tunnels in line with the directive.

Although the Bill did not face any hostile petitions during its consideration by another place, there was opposition from some local Members of Parliament. A number of concerns were expressed; no doubt they will be echoed in your Lordships' House tonight. I think that they focus on three issues, which I shall address in turn. First, how accountable would Merseytravel be to local people in exercising the powers under the Bill? Would it still be committed to operate the tunnels efficiently? Finally, would raising tolls be regarded as fair and equitable?

The noble Lord, Lord Hunt, in his instruction is concerned about accountability to local authorities. The relationship between PTAs and their constituent local authorities involves the formal process of appointment and informal checks and balances. I am most familiar with the arrangements for Greater Manchester where I chair for the local authorities in the Association of Greater Manchester Councils, which provides strategic leadership for the county and for the joint bodies.

From my contacts with colleagues in Merseyside, I know that their co-ordinating committee fulfils a similar role. For example, when Merseytravel is preparing its budget—changes to tunnel tolls would be part of that budget—it consults the local authorities. The PTAs are levying authorities. For those noble Lords who are not familiar with the intricacies of local government finance, that means that the expenditure by Merseytravel effectively is regarded as expenditure by each of the local authorities. So, in times of financial difficulties, that expenditure is in competition with education, social services and other forms of local expenditure. I assure noble Lords that local authorities take their job seriously. They have a role in scrutiny and they do it.

What if the PTA decides to ignore the instructions from the local authorities? That is when the power of appointment becomes a power of replacement. The authorities would replace members who would not obey the instructions with people who would, and I can assure noble Lords that that would happen.

The Bill will be an incentive to Merseytravel to operate even more efficiently. It is currently under best-value rules that require it to evaluate its activities to secure improvement. If anyone feels that Merseytravel is not doing that adequately, they have the option of going to the Audit Commission. However, the most recent letter from the commission states with no qualifications that Merseytravel is operating most satisfactorily.

But the further incentive the Bill will give to Merseytravel is the ability to apply surpluses to its primary purpose of improving public transport across Merseyside. That will make Merseytravel even keener to be efficient about the tunnels because it can use the money to do what it wants to do.

I turn finally to the difficult question: is it fair and equitable for tunnel users to contribute through tolls, as provided for in the Bill? I believe that it is fair. The tunnels provide a clear and direct benefit to those who use them. Users comprise just 3 per cent of the people of Merseyside. The alternative form of funding available to Merseytravel is through the council tax. Why should the overwhelming majority of Merseyside council tax payers subsidise the few who use the tunnel? Further, if the real value of tolls falls and, as is likely, other transport costs rise, the relative attractiveness of using the tunnels against public transport changes and the tunnels become more attractive. But Merseytravel is under an obligation to follow the Government policy of encouraging greater use of public transport, therefore tolls ought to rise in line with inflation to avoid the possibility of using the car through the tunnels becoming more attractive. In any case, during the rush hours, the tunnels are operating at pretty much capacity and there is no space for more cars.

I look forward to the contributions to the debate. I hope that the Bill will receive a Second Reading, thus allowing the Select Committee to do its work unencumbered. I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Lord Smith of Leigh.)

8.15 p.m.

Lord Hunt of Wirral

My Lords, I am grateful to the noble Lord, Lord Smith of Leigh, for so clearly introducing the Bill. However, when he referred to its passage through the other place, he might have added a few words to give noble Lords a feel for the hostility which it seems to have engendered. On looking at the provisions, it is difficult to imagine the extent of that hostility, but at Third Reading on 29 October last year, the Labour Member for Wirral South, Ben Chapman, seemed almost to euphemise when he said: It is a bad Bill, which is unfair, unwarranted and unwanted".—[Official Report, Commons, 29/10/03; col. 399.] The speeches of Bob Wareing, a Liverpool Labour MP. Andrew Miller, Stephen Hesford and Frank Field made one realise that there was a significant level of opposition to the Bill.

Then, surprisingly, the person asked to chair the private Bill proceedings. Bob Spink, the Conservative Member for Castle Point, said: Except for the noise reduction measures, the Bill is thoroughly bad … I hope that the Lords will severely amend it or throw it out".—Official Report, Commons, 29/10/03; cols. 396–397.] Mr Chope, speaking from the Opposition Front Bench, said: The Bill is not fair … it runs contrary to the results of a consultation process".—[Official Report, Commons, 29/10/03; col. 404.] Noble Lords will forgive me if I pause for a moment to say "Phew". What is it about the Bill that has given rise to such strong feelings, ones which I know are shared by a number of noble Lords? I have therefore put forward an instruction to which I shall allude, in the main because I understand that it exempts me from the time restriction. I shall seek to refer to it so that, later in the proceedings when moving it after the debate on Second Reading, I may be brief and to the point.

I turn to the history. There are three road tunnels known as the Mersey Tunnels, the oldest of which was completed in 1934. It has four lanes and links Liverpool with Birkenhead on the Wirral peninsula. The others comprise a pair of two-lane tunnels opened in 1971. They run from Liverpool to Wallasey on the Wirral peninsula. Those tunnels are in fact a continuation of the M53.

To understand the strong feelings that have been engendered, it is necessary to go back as far as I can to the days when I was a little boy being driven through the tunnels. In the little green booths at the mouth of the Liverpool tunnel, one or two of which are still preserved to this day, the toll collector would say to every young child entering the tunnel, "Don't worry, young man. When you grow up, there will be no tolls". This was a commitment made at the time and expressed by all the tunnel collectors. It remains a vivid memory.

The period over which tolls could be collected was limited. The limit was initially set at 20 years, then increased to 25, and finally, a 1933 Act set a maximum of 40 years. Because of the popularity of the tunnels, it eventually became necessary to have a second and third road tunnel. Those tunnels—the twin tunnels to Wallasey—were authorised in a 1965 Act. At that point, Wallasey Corporation joined Birkenhead and Liverpool to run the tunnels. Following the completion of the Wallasey tunnels in 1971, the tunnels started to make substantial losses, and things started to go wrong.

I hope that I have been able to set in historical context the reason why there are such strong feelings. After the period when the tunnels made losses, the debt built up significantly. It was always agreed by tunnel users and everyone else that the primary purpose of the tolls after the necessary administration costs would be to repay the debt. Slowly but surely over the years considerable progress has been made in repaying that debt.

The noble Lord did not mention an earlier Bill produced in 1999, which was withdrawn the following year. A consultation exercise was entered into by Merseytravel. I have the results of that consultation, which give us a feel of why people feel so strongly about the Bill. There was a question: Should the Mersey Tunnel toll levels be index linked with inflation? Generally, there was a 50:50 attitude towards that. No doubt that will require closer scrutiny in the coming weeks, but 47 percent said, "No", and 45 percent said, "Yes". When the question was put to public consultation: Should the requirement to reduce tolls when the tunnel's debt is paid off be removed? Seventeen per cent said, "Yes", and 71 per cent said, "No". The third question: Should surplus toll income be used to cross-subsidise and improve local public transport services benefiting the wider Merseyside community? Twenty-three per cent said, "Yes", and 67 per cent said, "No".

On the fourth point about the necessity to have insulation powers to finance noise insulation work in adjoining properties around Wallasey, there was a general view that that should be done. Indeed, there were questions about why it should not have been done already.

When those who were in favour of the tolls being index linked were asked why, they said because it meant that the tunnel's debt would be repaid quicker. The theme that has always been present with the tunnel tolls, which was repaying the debt, was seen as important, and those who were consulted said that that would hasten the point at which tolls could be reduced.

One of our local universities, the Liverpool chamber of commerce and the Liverpool Stores committee all supported the index linking of tolls, but opposed using surplus toll income to cross-subsidise other local public transport facilities. They and the three national motoring organisations all favoured lowering tolls when the tunnel debts were paid off.

My instruction to look at the detail asks at point (a) whether it is necessary at a time when the tolls are to be index linked to retain a power for the Secretary of State to increase tolls by more than inflation. I hope that the committee will consider that two-pronged approach, and then decide whether both powers are necessary, or whether one would be preferable. The second part of the instruction asks in paragraph (b) whether the provisions of the bill provide an adequate mechanism for taking into account the views of the five district councils … in respect of:

1. (i) increases in tolls;
2. (ii) the use of surplus tunnel toll income"—
3. to cross-subsidise, and—
4. (iii) the desirability of repaying the existing debt".

To summarise, there are very strong views held locally. Indeed, Liverpool has just captured the competition to become the European city of culture in 2008. I know how strongly local people feel, led by Esther McVeigh, that in 2008 there should be a lifting of the tunnel tolls to permit the free passage of cars and lorries during that very important year. I hope that the committee will turn its attention to the petition of the Mersey Tunnel Users' Association and to the need to ensure that the five district councils are properly consulted. The debt has now reduced from 140 million to 98.7 million. Therefore, with the tunnels now in surplus, as they have been since 1992, there is a firm belief that at last we shall see real inroads made into that crippling debt. One person has estimated that the tolls have already raised £500 million, and it is sad that we still have a debt of £98.7 million.

When the committee comes to consider the Bill, I hope that it will take into account all these points. I believe that it is right for me to give notice that if the Bill is not substantially amended, there may well be grounds for your Lordships to reject it at Third Reading, but I do not seek to oppose it at Second Reading today.

8.27 p.m.

The Earl of Mar and Kellie

My Lords, I am not a resident of the Merseytravel area and have no personal knowledge of it. However, I am interested in major infrastructure issues.

In Schedule 1, paragraph 3(a) to 3(e), the Bill seeks to reorganise the future income and expenditure attributable to the three tunnels. It is completely understandable that Merseytravel should wish to fulfil three of the five objectives that are laid down in sub-paragraphs (a) to (e): first, the payment of day to day operating costs and the indexation of the tolls; secondly, the repayment of the costs of financing the tunnels; and, thirdly, the making of payments into a reserve fund to deal with upgrades required by European and other legislation and heavy duty repairs at a future date, which are bound to be necessary with the passage of time.

Noble Lords have previously heard me comment on infrastructure matters in Norway, Scotland's neighbour. The arrival of the EU tunnel directive is most likely to reinforce in the Norwegians a further reluctance to join the EU. Their countless miles of tunnel, almost all bare rock, are unlikely to conform to EU standards, which presents a risk of ever higher costs.

The other two objectives are more surprising. Sub-paragraph (d) would enable the PTA to cross-subsidise the passenger ferries crossing the Mersey. That suggests that the ferries are either too expensive to operate at an economic fare or that there is a desire to charge a less than economic fare, presumably with the purpose of encouraging more people to use those passenger ferries. It is in relation to that issue—a deliberate attempt to reduce the number of vehicles using the tunnels—that we may find a form of congestion charging.

As a non-resident, I am concerned about two matters. First, if I am right about boosting ferry traffic, will there be sufficient parking facilities in the vicinity of the slipways for more cars. Secondly, there will undoubtedly be considerable local disappointment over the abandonment of the promise eventually to reduce the tolls when the original capital debt is deemed to have been repaid. I suspect that the plan to cross-subsidise the ferries or to contribute to the implementation of local transport plans will be unpopular with tunnel users. There is a need to be up-front about the tolls being a form of congestion charge. That would at least make it clear that there is a policy of reducing road traffic into Liverpool.

The other objective, to be able to make grants for noise insulation work in Wallasey, will, no doubt, be popular with those who live adjacent to the approach road, even after all this time of slightly more than 30 years. How this will be viewed by everyone else is to be imagined.

Some will view the abandonment of the promised reduction as a complete betrayal. However, I strongly suspect that the increased running costs of the tunnels, their upgrade and their future repair provision into a reserve fund would have wiped out any real reduction in toll.

When considering the tunnels, I cast my mind back across the North Sea to Norway. Noble Lords will be aware that the Norwegians have become great tunnellers ever since they decided to abandon ships as their first line of transport and to develop a road network in the coastal areas. Tunnel charges are usually 10 or 15 kroner—that is, 90p to 125p—except when a tunnel is new. I recall paying 75 kroner—about 6—to go through the tunnel from Stavanger to Rennesoy on the challenging new highway between Stavanger and Bergen. I learnt at my tourist destination that the 75 kroner toll was expected to reduce to the normal 10 or 15 kroner "when the tunnel was paid for". Given the scale of the difference—a sore thumb if ever there was one—I would expect that toll to reduce in the future.

The £1.20 toll in the Mersey is not exorbitant and, in any case, matches ordinary Norwegian tolls. In Scottish terms, the Forth road bridge is 90p northbound only; and the Skye bridge is a disgraceful £4.70 one way.

I believe that the Bill should receive a Second Reading, preferably without an instruction.

8.32 p.m.

Lord Faulkner of Worcester

My Lords, like the noble Earl, I, too, support the Second Reading of the Bill. I commend the way in which my noble friend Lord Smith of Leigh introduced it. I should also like to express my appreciation to the noble Lord, Lord Hunt of Wirral, for the meeting that he convened for interested Members of the House on 28 January. I suspect that some of us had other matters on our minds that day as the attendance consisted, I am afraid, only of my noble friend Lord Harrison and myself from this House plus a number of the opponents of the Bill from the other place. There were not, unfortunately, any of the Members who spoke at Second Reading in favour of the Bill—such as George Howarth, Claire Curtis-Thomas, Dr John Pugh or any of the others who made up the very large majority that voted for the Bill when it went to a Division on 9 July 2002.

The only interest I have to declare in the debate—it is a wholly unremunerated one—is that I am an honorary vice-president of Transport 2000, the national environmental body which seeks answers to transport problems and promotes solutions which respect the needs of people and the environment. Transport 2000 is a petitioner in support of the Bill.

I welcome the Bill for a number of reasons, not the least of which is that it is wholly in accord with the principles which those of us in my party—and, indeed, in the Liberal Democrat party—have sought to adopt on congestion charging and traffic demand management. I support the idea of index-linking tolls and applying surplus revenues to fund public transport.

Thirdly, in addition to those two reasons, I believe that we need to adopt environmental policies that return streets to the people who live in them and make our towns and cities pleasant places not dominated by traffic. A further benefit of traffic demand policies is that by reducing total vehicle emissions they improve air quality. Traffic that moves smoothly spews out fewer pollutants.

All these principles were contained in the DETR's consultation paper Breaking the Logjam; they were enshrined in the Transport Act 2000 and are now being followed by the Secretary of State for Transport and by the Government as a whole. Indeed, during the time that I had the pleasure of working with my noble friend Lord Macdonald of Tradeston, I remember that we spent many hours in your Lordships' House putting forward the case for local transport plans and for the need for local authorities to be able to raise some of the funds necessary to pay for those plans from local charges. The Mersey Tunnels Bill is wholly consistent with that principle and also with the approach adopted by the Government towards the Dartford crossings.

As my noble friend Lord Smith explained very clearly, it is evident that the financial structure of the Mersey tunnels has been manifestly unjust to residents of the city of Liverpool and to the council tax payers in the other districts that make up the Merseyside PTA. For decades, whenever the tunnel's finances have fallen into deficit, the 97 per cent of Merseysiders in those five boroughs who do not use the tunnels—an extraordinary statistic—have found themselves subsidising the 3 per cent of their fellow council tax payers who do. That injustice is compounded by the fact that 90 per cent of journeys through the tunnels are made by private cars, yet as many of your Lordships will know, car ownership across Merseyside is relatively low due to the widespread deprivation in the conurbation.

The use of local authority funds to bail out the tunnels in the past has thus been a regressive form of taxation. However, at least it can be said that the 3 per cent of local residents who use the tunnels have made some contribution through the rates or council tax. That cannot be said of motorists entering Merseyside from Cheshire, Lancashire, North Wales or further afield. They contribute nothing to the tunnels through local taxes. It is right and proper that the possibility of council tax payers subsidising the tunnels in the future should now be removed.

In rectifying these injustices, the Bill that we are considering tonight also creates the opportunity to bring two further public benefits. First, the proposed indexation of tolls is a demand management tool consistent with the principles of the Transport Act 2000. It would assist in attempting to unclog the congestion in the streets of Liverpool city centre caused by the unrestrained growth of road traffic. The second additional benefit of the Bill is that it allows for the use of surpluses to assist in the delivery of a local transport plan at some point in the future when indexation has enabled the fabric of the tunnels to be improved, the safety requirements to be met. safety standards to be increased, and the soundproofing of local residents' houses to be carried out.

Merseytravel's local transport plan has been widely-praised as one of the very best in the country and has brought benefits to all modes of transport. Those transport modes include ferry, bus and rail services across the Mersey, which provide alternatives to driving through the tunnels. It is interesting that the Government are now reviewing whether the Merseyrail model can be copied elsewhere in the country. The Merseyrail Electrics network is particularly important for residents on the Wirral side of the river. It provides them with direct access to the heart of Liverpool for work, shopping or leisure without the need to drive and find a parking space in the city. Being further able to enhance the rail system for the Wirral through the LTP with surplus funds from the tunnels is vital for the long-term success of Merseyside. That is why I commend Merseytravel for its initiative in linking the services from the tunnels to the LTP by means of this Bill.

We have heard, and I suspect that we may hear from others in this debate, that the Bill imposes an unfair burden on motorists. However, the effect of indexation of the tolls can hardly be described as punitive. The 10p per trip toll increase every three years, amounting to £1 per week for someone crossing the river every working day, will not seriously damage the pockets of commuters. Nor can anyone seriously claim that it will adversely affect the local economy Should there be any prospect of economic disadvantage, the Merseyside PTA—a body made up of elected councillors from five districts—will be able to use its discretion not to increase tolls in exactly the same way as it did in 1992 when it had the authority from the Government to double tolls from 60p to £1.20. The authority then held the toll down to £1 because of the condition of the local authority.

It seems to me that the opponents of the Bill wish to immunise car drivers from the effects of inflation and from the small toll increases which the Bill proposes. But what about bus, rail and ferry fares? Each one of these rises in line with the RPI. In the case of buses they have tended to rise by far more than the retail price index. So why should public transport users be made to pay their way, and motorists be protected? There are countless studies which show that the costs of motoring will continue to fall in the years ahead. It will be difficult everywhere to maintain the attractiveness of public transport through the price mechanism. The opponents of this Bill are trying to lead us in exactly the opposite direction by preventing the tunnels' tolls from rising in line with the RPI.

There is a great deal more that I would like to say but we are time limited and I intend to finish there. I commend the Bill wholeheartedly to your Lordships' House and hope very much that the instruction which the noble Lord, Lord Hunt, is proposing to move is not accepted because that will add unnecessary delays to the committee; it will interfere with the rights of local authorities in the way in which they consider these matters and is entirely unhelpful.

8.41 p.m.

Lord Dixon

My Lords, I, too, support the Bill's Second Reading, as moved by my noble friend Lord Smith of Leigh.

I begin by admitting that my experience in Merseyside is limited to the period I worked as a ships' carpenter in the Liverpool Docks in the early 1960s. The whole of my local government experience during the 1960s and 1970s was in the Tyne and Wear area; I also served for a short period on the Tyne and Wear PTA. I know only too well from my experience that local councillors are on the sharp edge of politics—every May they have to knock at doors and get votes to keep their jobs.

This Bill is promoted by, as my noble friend Lord Smith said, the Merseyside Passenger Transport Authority, made up of 18 democratically elected councillors who are nominated annually by the five Merseyside local authorities. The Bill has the support of those five local authorities, the trade unions and—judging by a glance at the report in Hansard of the debate in the other place on the Bill—the majority of MPs in the area.

The Bill was given a thorough examination in the other place from the time it was deposited in November 2001. The Bill had its Second Reading on 9 July 2002, when it was carried by 105 votes to 22. The report came from the Unopposed Bills Committee on 12 March 2003 and received consideration and Third Reading on 29 November 2003. It spent almost two years in the other place.

Having a little experience, like the noble Lord, Lord Hunt, of the practices in the other place, I know that the procedures gave ample scope for detailed examination by a small number of Members who were not happy with the contents of the Bill. To get a vote for a private Bill means that those in favour have to move a closure or the Bill may be talked out. This requires those supporting the Bill to have at least 100 Members pass through the Aye Lobby, usually at 10 o'clock at night. This is not an easy task on an unwhipped Bill at 10 o'clock without the help of the Government's Whips Office.

I well remember the Felixstowe Bill in the mid 1980s, as I am sure does the noble Lord, Lord Hunt, because he and I were then sitting in the other place. It was opposed by a handful of MPs from mining constituencies who were concerned that Felixstowe Harbour would be used to import coal at a time when many pits were closing. I remember my late and good comrade Lord Hardy of Wath speaking for hours about the effect on wildlife that that Bill would have. From my scant reading of this Bill in the other place I learnt more about the Queensway Tunnel than I know about the Tyne Tunnel, although I have lived a mile from the Jarrow entrance to the Tyne Tunnel. I found out, for example, that King George V opened the Queensway Tunnel on 18 July 1934. My honourable friend Bob Wareing is the only Member of the House of Commons to have walked through the tunnel in 1934, with his father who had made a donation to charity. I also found out that there are 1 million bolts in the iron lining of the tunnel and 140 miles of caulked joints. All those interesting facts surfaced during the detailed examination in the other place. That was perfectly in order.

The Bill empowers Merseytravel to increase tolls in line with RPI. However, it does not require the authority to exercise that power; it merely gives it a discretion. What is wrong with that? In one way or another, every Bill considered in this House takes power away from local authorities. This Bill will do the reverse and give local authorities the power to increase tolls in line with RPI.

The Bill also provides for noise insulation in the homes of residents near the Wirral approach roads to the Kingsway Tunnel. They have suffered from tunnel traffic noise since that tunnel was constructed in 1970.

Between 1988 and 1992 the tunnel had a deficit which was made the subject of a precept paid by local tax payers in the five district councils. Noble Lords have already referred to that twice. Why should the people in the area have to subsidise people outside the area who use the tunnel? The statistics mentioned by my noble friend show that only 3 per cent of those who use the tunnel reside in the area. So 97 per cent of tunnel users live outside the area but are subsidised by those who live there.

I support the Bill also because it is not a privatisation Bill. In fact, the preamble states that the authority has resolved that it wishes the tunnels to remain in public ownership.

The Bill was examined thoroughly in the other place. I hope that it has a speedy passage through this place. I support the Bill and hope that the noble Lord, Lord Hunt, will not press his instruction.

8.47 p.m.

Lord Wade of Chorlton

My Lords, I should first declare an interest. I live near Chester and have business interests in Liverpool, so I use the tunnel fairly frequently. However, that does not stop me from accepting that the rates have to increase. I am very happy to accept the Bill's proposal that the costs and tolls should be index linked. I think that that makes sense. I accept the argument that those who use the tunnels should be the ones who pay for them. However, like my noble friend Lord Hunt, I was brought up to believe that one day the tunnel would be free. I should like at least to see the money paid off. So I agree with my noble friend that there should be a clear commitment that the borrowings will be paid off.

I am also concerned that we do not end up with the reverse of what the noble Lord, Lord Faulkner, described as an unfair arrangement whereby those who do not use the tunnel pay for those who do, so that those who use it and pay the increased costs end up paying for other matters over which they have no control. People in my part of Cheshire are concerned about those issues—that costs will continue to increase although all the debts are paid off, and yet they have to contribute towards issues that are of no benefit to them but to the benefit of others who are paying nothing at all.

I think that those two issues need to be examined. I am concerned about the extra powers being given to the Secretary of State to deal with matters of which we are unaware. I do not see why the Bill has to give definite increases and powers to Merseytravel and potential powers to the Secretary of State to do other things of which we have no indication. So although I support the main thrust of the Bill, I support my noble friend's Motion that these matters should be considered by the Committee and the Committee should undertake a proper review of the issues that we have raised.

8.49 p.m.

Lord Harrison

My Lords, everyone on Merseyside knows that Gerry and the Pacemakers sang "Ferry Cross the Mersey". Few, however, know the Beatles' song about that other form of crossing, the Mersey tunnels. It is entitled, "I Feel Fined". That is because after 70 years and after paying 500 million for tunnels that cost only one-tenth of that sum—and, I might add, for the privilege of crossing from one part of their own city to the other side—the people of Merseyside are fed up of paying the toll tax.

The Bill before us not only fails to right that historic wrong; it abandons the promise to abolish the tolls once the historic debts have been paid off. This cannot and is not right. I declare an interest: I and my family in Chester regularly use the Mersey tunnels to visit friends and family, hospitals, art galleries, football stadiums and shops in Liverpool. I also declare an interest as a former MEP for the Mersey tunnels and the Runcorn bridge. Indeed, I waged a campaign on behalf of the good people of Widnes, who rightly objected to having their local roads clogged up by those fleeing the Mersey toll tax, itself an early and unfortunate experiment in road pricing.

All Merseysiders are dismayed, but none more so than Wirralians and those in the hinterland of West Cheshire and North Wales, who have greatest reason for, perforce, using the tunnels and who still, at the dawn of the new millennium, find themselves coughing up on broken promises. How badly timed is this proposed change. Do we really want to celebrate Liverpool's enthronement as European City of Culture in 2008 with welcoming signs on the Wirral side of the tunnel saying, "Willkommen to the toll tax"?

Secondly, the Bill proposes that the tolls should be inflation-proofed, regardless of the historic and real cost of running and maintaining the tunnels. That is irrational and unfair to toll-users. The tunnels should be treated as self-standing cost centres. Given the almost wholly predictable nature of the car flows through the tunnel, appropriate toll levels can be arrived at easily and for stable periods.

My third objection is that toll-payers should not have to fund transport projects beyond the immediate purview of the running of the tunnels; a major change brought about by the Bill. Toll-payers should most certainly not be taxed to fund entirely ungermane projects associated, say, with boosting tourism. I say that as someone who flies the flag for the tourism industry in your Lordships' House and someone who has played a modest role in obtaining Objective 1 moneys for Merseyside. Those worthy projects for transport and tourism seem ideal for European regeneration funding. Indeed, I remember fondly associating with colleagues at Merseytravel to secure Euro-funding for the innovative smart buses some five years ago.

My fourth objection is to the potential for privatisation of the tunnels—the subject of the earlier withdrawn Bill—which would be facilitated by abandoning the current pledge to set the tolls free once the debt had been repaid, and by the fact that the tunnels in the Bill are turned into cash cows by the introduction of the liberty to allocate surplus moneys for other non-tunnel purposes.

That leads me to my fifth concern: the accounts. I have only recently received some information on the accounts. At first glance, it would appear that the company's finances are more than comfortable. That view is reinforced by the recent withdrawal of the application to increase tolls by 10 pence and by the fact of the accelerated debt repayment of £3 million last year.

I have many questions about the accounts that I have seen, but will the Minister confirm whether the current voluntarily-produced accounts of the Mersey tunnels are specifically covered by the district auditor's opinion and certificate? I understand that they are not.

Finally, plans for a new crossing of the Mersey upriver from the tunnels will have a material effect on whether it is wise to change now along the lines proposed. For instance, we do not know whether the new crossing will be tolled. In the light of that, should we not instead pledge ourselves to fulfil earlier promises made about dispensing with the tolls, and at the same time make the running of the tunnels transparent, simple, fair, effective and efficient for the benefit of all the people of Merseyside and its hinterland, especially on the eve of Liverpool's finest hour?

8.55 p.m.

Viscount Simon

My Lords, my noble friend Lord Smith is to be congratulated on his presentation of the powers contained in the Bill, and of the positive benefits that it will bring to Merseyside. I am pleased to speak in favour of the Bill, which modernises an anachronistic system of financing and managing the famous Mersey tunnels. I make no apology if I repeat some comments that other noble Lords have already made. However, I shall keep my comments brief, as the Bill has been debated at length on a number of occasions in another place and was substantially unamended.

I see four key benefits to the Bill. First, the powers sought by Merseytravel will remove a major burden currently placed on Merseyside's council tax payers. Under the existing legislation, it is they who must meet any deficits that arise as a result of the operation and maintenance of the tunnels. While that has not happened recently, it could easily do so again under existing legislation. Indeed, people in Merseyside still talk of the £28 million deficit that had to be funded in that way between 1988 and 1992. Furthermore, Merseytravel, the body responsible for managing the tunnels, can manage its finances with only a limited degree of forward planning. The Bill rectifies that.

Secondly, the Bill will ensure continuing investment in the tunnels' infrastructure and the potential to invest any surpluses in public transport in the region. That has to be a positive development, one which I support. Thirdly, by removing the need for a public inquiry every time that there is an application for an inflationary toll rise, the Bill will remove red tape and place decisions in the hands of those with responsibility for implementing them. That also has to be a welcome step forward.

Finally, I am entirely convinced of the need for the Bill in terms of enabling Merseytravel to undertake noise insulation works to the 200 or so properties situated at the Wallasey end of what is known locally as the Queensway tunnel. Being asthmatic, I know of the dangers that car fumes pose to people's health, as well as the associated health risks from the dust particles that will pollute their homes. I can therefore fully empathise and sympathise with the dangers that the families living in those properties have experienced on a daily basis for many years. As well as those dangers, there are the added difficulties of the constant noise impacting on their privacy and comfort. The sooner the Bill is enacted, the quicker Merseytravel can commence that work and mitigate the dangers to the health and quality of life of those long-suffering residents.

In closing, I would like to comment briefly on the instruction tabled by the noble Lord, Lord Hunt. Unlike him, I am satisfied that Merseytravel is the proper body to make decisions about the finances of a major piece of transport infrastructure which it is ultimately responsible for managing. The instruction seems to be an attempt to further the Conservative Party's campaign against PTAs and I consider that it could well place an intolerable burden on the Select Committee by inappropriately widening its remit. Existing laws, particularly on best value, ensure that the tunnels undertaking is run efficiently, economically and with proper consultation with stakeholders. I am not persuaded by those who voice arguments to the contrary.

8.59 p.m.

Lord Berkeley

My Lords, I congratulate my noble friend Lord Smith of Leigh on introducing the Bill. My interest is in encouraging public transport. Given that the Bill is promoted by Merseytravel, the passenger transport authority and executive for Merseyside, and with the PTA comprising 18 elected councillors who set the policies for the executive, it is about as democratic as it can be. The PTA has a high reputation around the country among transport professionals generally.

I was interested in some of the comments made by the noble Lord, Lord Hunt, about the consultation process. I find it difficult to link the 67 per cent who said "No" to cross-subsidy with the 40 per cent of people in the Merseytravel area who, I understand, do not have access to cars. It would be odd if they did not want some of the toll money put towards public transport if they had no other means of travelling around. The most surprising statistic quoted by the noble Lord was that motorists do not want tolls. That really is a novelty. People really would like to drive around for nothing. But that is not what life is about.

Both the noble Lord, Lord Hunt, and my noble friend Lord Harrison mentioned Liverpool as the 2008 City of Culture. That will be exciting and the key is not to create a toll-free gridlock—"Willkommen aus gridlock " perhaps—but a car-free environment for the period, where the really beautiful Merseyside landscape can be enjoyed without gridlock and the fear of being run over. That should be the objective and the Bill goes some way towards it.

It is a local Bill, promoted by the local PTA. That authority is made up of elected people who should be capable of deciding what is good for Merseyside's travel needs. There is nothing particularly new about the principles behind the Bill. As several noble Lords have said, the principle is consistent with the Government's policy set out in the transport White Paper and the Transport Act 2000, which is to encourage public transport and limit car use for the benefit of all. Perhaps it is the start of a 21st century solution, although we have some way to go. The principle is also similar to the legislation governing the finances of the Dartford crossing and the provisions set out in the Traffic Management Bill, currently before Parliament, which, no doubt, your Lordships will be discussing soon, relating to the use of surplus parking revenues. Just for completeness, that principle is a major part of the European Commission's White Paper on strategic links, which proposed that revenue from tolls on roads and such links should be put aside for investment and support for public transport, rail and so on.

What is wrong with cross-subsidy? The London congestion charge is wholly a cross-subsidy, because Mr Livingstone has used much of it to buy those wonderful new bendy buses that we all love so much. They are very good and I believe that bus use in London has increased by 20 per cent. As for charging for crossings—estuarial or otherwise—that happens for the Humber, the Severn, the Dartford tunnel and the Channel Tunnel. Tolls on the Channel Tunnel for a car sometimes approach £200—significantly higher than that envisaged in the Bill.

There is nothing wrong with paying a small amount to use a piece of infrastructure for one's own benefit, which, as many noble Lords have said, does not benefit 97 per cent of the population. I believe that the Bill places responsibility in the hands of local people, where it should be. We have seen the benefits of local solutions to local issues by local people in Merseyrail Electric's network, which has been the best performing railway on the UK mainland since Merseytravel took over the Strategic Rail Authority's franchising responsibilities. I am not sure it is better than the Isle of Wight railway, but I shall leave that to one side.

My noble friend Lord Faulkner mentioned that the plan was looking at vertical integration, which I might not generally like if I was wearing my rail freight hat, but is good for the area. Whether that principle will be extended to the whole network is not part of the argument. We should devolve decision-making where we can—cut out the bureaucracy and speed up the decision-making. This Bill has been around for far too long in my view.

Turning to the instruction tabled by the noble Lord, Lord Hunt, I do not believe that it is necessary or appropriate. Nor do I agree that it is correct in its central assertion because the seven PTAs, which are responsible for setting public transport policy in the former metropolitan counties, are, in my view, best placed to assert the needs and views of the local population and their stakeholders. They are elected—they are the people who run it. It seems extraordinary that the noble Lord, Lord Hunt, should seek to instruct the Select Committee to consider, whether the provisions of the bill provide an adequate mechanism for taking into account the views of the five district councils", when the promoter of the Bill is the five district councils. This looks to me like a monumental piece of navel gazing by the Select Committee. It would be boring and waste an awful lot of time for absolutely no benefit whatever.

To conclude, the Secretary of State for Transport recently said in another place: Local transport decisions are often best taken by the people who are providing the service and who pay for it. They can be better placed to know what is needed and how best to provide it. as well as being able to make sensible and informed decisions".—[Official Report, Commons, 19/1/04; col. 1076.] This seems to me to be absolutely sound, and having met many transport professionals throughout the country, including Merseytravel's chief executive, Neil Scales, I am confident that the Secretary of State is quite right, certainly in this case.

I commend the Bill to the House. It should be allowed to follow its course without the instruction from the noble Lord, Lord Hunt.

9.6 p.m.

Baroness Hooper

My Lords, I am most grateful to your Lordships for allowing me to speak briefly in the gap. I had not expected to be here this evening and therefore had not put my name down to speak.

It seems appropriate to be considering this issue on a day when Eurotunnel announced that without changes to simplify its structure and more flexibility to help it repay its debts, its future would not be viable. I appreciate that here we are talking about tunnels for cars and not the uses made of Eurotunnel.

As a former Member of the European Parliament for Liverpool I was a great user of the tunnel. Perhaps I may be allowed a personal reflection. My mother often talked of her excitement at going through the first Mersey tunnel before it was officially opened. So there are a number of reasons why I believe the tunnel needs to be put on a more secure footing.

As a great supporter of Liverpool's status as a future European capital of culture, I welcome the suggestion, which was raised by my noble friend Lord Hunt, that the tolls should be lifted during that period. What therefore will happen in 2007, when Liverpool will be celebrating the 600th anniversary of its charter?

Many of the arguments advanced in favour of the Bill were persuasive, particularly those of the noble Lord, Lord Faulkner, but no one has answered the points raised by my noble friend Lord Hunt about the failure to take into account the results of the public consultation. On that basis, and on the others he advanced so clearly, I support him in his request for an instruction to the Select Committee.

It seems to me that the processes of which we can take advantage in Parliament should be thoroughly used in order to meet the concerns which have been expressed not only as shown by the results of the public consultation but also as expressed most vehemently in another place. I see no reason why the use of the instruction should delay proceedings. It simply underlines the fact that we in this House give a thorough examination to all the legislation that comes before us, whether public or private.

9.9 p.m.

Baroness Scott of Needham Market

My Lords, I offer my wholehearted support for the Bill and in doing so declare interests as the chair of the Local Government Association's transport executive and as a member of the Commission for Integrated Transport. Having offered to take on the job of winding-up on what I thought would be a quick and easy debate on a Bill held late at night, I realise that I rushed in where angels fear to tread.

Nevertheless, having considered it in detail, I remain of the view that this a sensible piece of private legislation, which arrives in your Lordships' House in the unusual state of having been scrutinised by another place. That happens all too rarely these days. The Bill is now in its third parliamentary Session. I am dismayed that it has taken so long to reach us. Someone from another planet would wonder why on earth it would take so long to approve something that is in essence entirely in conformity with government policy, as the noble Lords, Lord Berkeley and Lord Faulkner of Worcester, suggested.

I support the Bill because it will allow its promoter to correct a number of fundamental flaws in the legislation that governs the management of the Mersey tunnels with which it has now been struggling for some time. Probably the most glaring example of those flaws is that the tunnels are essentially deficit-driven. The Mersey tunnels must be making a loss before any adjustment can be made to the toll.

As we have heard, in those circumstances it is the council tax payers of Merseyside who are required to make up that deficit, as happened not too long ago. As the noble Lord, Lord Smith of Leigh, said, only 3 per cent of the local populace use the tunnel. I am sure that noble Lords would agree that requiring taxpayers as a whole to meet the debts of a service that is not used by the vast majority of them is not an equitable approach to public finances. In fact, many of them probably do not even own cars, which must make it all the more sickening for them. The Bill would remove that irregularity and enable Merseytravel to place the tunnels' finances on a sound economic footing, removing local taxpayers from that misplaced financial liability.

Also, under existing arrangements, proposed adjustments to the tolls must be referred to the Secretary of State, no matter how modest those increases may be. The Secretary of State almost always decides that there needs to be a public inquiry—in fact, every time Merseytravel has sought such an increase, there has been a public inquiry and the Secretary of State has approved the toll rise. That seems a disproportionate response to the scale of the problem.

That all adds to the delay. Historically, there has been about 22 months between application and approval. During that time, debts can accrue and the public inquiry causes considerable costs. That system inhibits Merseytravel's ability to look forward rather than back and plan investment for the tunnels' structures and operating systems.

The Bill removes the need for Merseytravel to seek the Secretary of State's approval for increases in line with the retail price index. To put that into context, I am told that in 1992, the toll was £1; it is now £1.20. An RPI increase would be approximately 10p every three years for a car. Do we really need the Secretary of State's approval and a public inquiry for such rises? I think not. To respond to the point made by the noble Lord, Lord Harrison, who referred to visitors from Europe, most visitors from Europe would find the idea of paying a £ 1.20 toll perfectly normal, because they do so all the time all over Europe.

Having said all that, the most important and controversial provision in the Bill is that to allow surplus funds to be invested in public transport on Merseyside. That will enable public transport to be delivered more quickly; for that reason, we should support it. It is entirely in line with proposals advanced under the Transport Act 2000 for workplace charging and congestion charges. In that sense, it is entirely consistent with government policy. It seems odd that opponents of the provision seem to think that it is all right for council tax payers widely to subsidise deficits but not for surpluses to be invested across the wider area. I struggle to understand that inconsistency.

Lord Harrison

My Lords, will the good Lady, my noble colleague on the other side, reply to this question: what is her justification for requiring the 3 per cent who, it is claimed, use the tunnel to pay for those extra items that are not tunnel-related but are related to transport infrastructure in Merseyside and tourism activities?

Baroness Scott of Needham Market

My Lords, to start with, I am "noble" rather than "good". Difficulties arise once we start down the road of deciding that we must itemise exactly what people use and how it gets paid for. In the end, one must come to a balance. The balance that I have reached in my mind is that, when 3 per cent of the local populace use the tunnel, it is inequitable to expect the wider population to pay for it.

As the chair of the LGA's transport executive, I have worked very closely with the PTAs. In my opinion, they deliver the only thing approaching integrated transport in this country. They deliver budgets worth many millions of pounds and comprise elected representatives from local authorities. It is extraordinary to think that we need a parliamentary procedure to look in detail at whether they have done properly the job of consultation. All the political parties now talk about localism and local decision-making. It is difficult to understand in any sense how localism comes into play in this context.

In public consultation, when people are asked whether they would like to pay more, of course they will say no. It is natural that people want to stick to the arranged proposition—that the tolls would be reduced when the debts were paid off. But time marches on. The traffic situation on our roads bears no resemblance to how it looked when those arrangements were agreed to. I say that with all deference to the boyish looks of the noble Lord, Lord Hunt. When he heard those propositions as a boy, the traffic situation was quite different, as I am sure he would agree. The PTA has a duty to reflect wider issues of transport policy, and those that pertain now rather than when the legislation was originally drafted.

I support the Bill and wish it a speedy passage on to the statute book from this side of the House, although it took a long time in another place.

9.17 p.m.

Lord Luke

My Lords, several noble Lords have said that they do not know the Merseyside area very well. I can at least say that I have been through one of the tunnels—I notice that that creates surprise—but I am afraid that it was so long ago that I cannot remember which one.

This has been an interesting debate and has been sharply divided between those supporting the promoter of the Bill, the noble Lord, Lord Smith of Leigh, and those such as my noble friend Lord Hunt who question whether it is morally right to divert funds that are effectively being used to pay off debts incurred both in tunnel-building, maintenance and unprofitable working through the years.

In another place, supporters of the Bill broadly came from the Liverpool side of the tunnels, and those broadly against came from the Wirral. Arguments, as I have read, swayed to and fro during the four separate occasions on which the Bill was discussed during 2002 and 2003. There was clearly no thought of compromise on the part of the promoters at any time. Most of the relevant arguments have been put again tonight, and I shall not waste noble Lords' time by repeating them at such a late hour.

I wish to quote from an amendment moved by my honourable friend Christopher Chope in another place on 29 October 2003. He said that the purpose of the amendment was to delete from the Bill the provision to use tunnel income to make payment to, the Authority's general fund for the purpose of directly or indirectly facilitating the achievement of policies relating to public transport in its local transport plan, or for other purposes".—[Official Report, Commons, 29/10/03; col. 360.] This sensible amendment, which was needless to say defeated, although it was supposed to be on a free vote, encapsulates the main concern about this Bill. Again, Mr Chope said in the debate at Third Reading, This Bill is provocative and contentious … the promoter has missed a great opportunity to try to reach a compromise".—[Official Report, Commons, 29/10/03; col. 403.] I understand that there has been a long-standing agreement that income arising from the tolls should be used to pay off the debts, which I mentioned earlier, and that when that has been done the tolls should be lowered and just used to pay for ongoing maintenance. This Bill would seem to be about to kill off that understanding, just when the debt burden is coming down fast.

This is just another anti-private motorist measure, this time promoted by the Labour-controlled local authorities in Merseyside. The way has been trenchantly indicated by my noble friend Lord Hunt of Wirral. I hope that the Minister will support his most sensible instructions and that they will be accepted by the noble Lord, Lord Smith of Leigh, as well.

9.21 p.m.

Lord Triesman

My Lords, I join in congratulating my noble friend Lord Smith of Leigh on the able way in which he has put the case for the Bill. I also thank the noble Lord, Lord Hunt of Wirral, for providing what I can only describe as so passionate a response. I commend all those who have taken part in the debate on all sides of the House, because it has been a useful debate on issues of some importance. I have been through both the Kingsway and Queensway tunnels, but I shall not say that it gives me any special qualifications in any respect.

As noble Lords will know, it is the convention that the Government take a neutral stance on private Bills that do not contradict stated Government policy. That is the position that the Government will take this evening on this Bill. That said, the Government have stated through my right honourable friend the Secretary of State for Transport that they have no general objections to the aims of the Bill.

The Bill includes a number of provisions. It will permit Merseytravel to increase tolls at the tunnels based on the retail price index, the RPI formula, without having to seek permission from the Secretary of State for Transport to use some of the proceeds from the toll revenues for wider transport objectives in Merseyside. That is broadly in line with the options available to local authorities through legislation that already allows them to introduce road user charging. The Government are therefore not opposed in principle to Merseyside's proposals to use some of the additional toll revenue for local transport purposes, a point that was well made by my noble friend Lord Faulkner of Worcester concerning the whole issue of transport demand management, and my noble friend Lord Simon, who also emphasised the effectiveness and efficiency arguments that are inherent in what I said.

The Bill would permit increases to toll charges in line with the RPI. As the noble Lord, Lord Smith of Leigh, said earlier, any increase beyond the RPI would continue to be a basis of a right to object, and the Secretary of State would still have to consider any such proposition. The Government are not opposed to this principle, especially as the tunnels are owned and operated by a passenger transport authority made up from members of Merseyside's five local authorities. As such, it is already subject to clear democratic accountability. It does so in a credible way, as the noble Lord, Lord Dixon, said and as the noble Lord, Lord Berkeley, reinforced.

The Bill would give Merseytravel the ability to undertake and finance noise insulation work to properties on the Kingsway tunnel approaches to the roads on the Wirral. The Government welcome the introduction of those new powers because they understand that this is responding to a longstanding concern expressed by local residents. The power to take such a welcome step does not currently exist in legislation. My noble friend Lord Simon made that point forcefully and others have echoed it.

The key argument against this general approach is that the only proper use for the money is to repay the debt. I carefully listened to the arguments about that. With great respect to noble Lords, when the toll collectors were talking to small children in the past, they may not have provided a definitive economic analysis or plan for the whole of the future of the Merseyside transport system, let alone the tunnel. No doubt I would have been gratified—although I went through the tunnels as an adult and did not have the benefit of that discourse—on hearing it, but I do not think that it could be regarded as a serious proposition now.

The noble Lord, Lord Hunt, questioned the appropriateness of what he described as allowing Merseytravel, in effect, to "tax" tunnel users to fund other transport projects in Merseyside. The use of net proceeds from the toll or from any charging revenue for wider transport objectives is not unique. Matters move on. Safety demands become greater. Traffic management issues become more important. Environmental demands cannot be set aside lightly and they make new calls on all of us. I know that my noble friend Lord Harrison will see that point—at least, I hope that he will. Perhaps the noble Lord, Lord Luke, will as well; but from what he said, perhaps not.

The Government have already introduced similar powers within the legislation allowing for the introduction of road user charging under the Greater London Authority Act 1999 and the Transport Act 2000. In those cases, the relevant legislation states that net revenue from road user charging must be used for transport purposes. Of course, historic issues are important. I understand that. But the future is probably much more important if we are to get it right. The noble Earl, Lord Mar and Kellie, was right when he referred to that issue.

While the Government generally have no objections to the aims of the Bill, in the past they expressed two areas of concern. First, the Government were conscious of the strength of local feeling about allowing the Merseyside Passenger Transport Authority (Merseytravel) to increase tolls by RPI without any check; and secondly, that some of the Bill's proposals for using revenue derived from heavy goods vehicles for purposes not related to the costs of the tunnel's construction, maintenance and operation could be in breach of EU Directive 99/62 on the charging of heavy goods vehicles for the use of certain infrastructure.

Amendments were made by the House of Commons' Unopposed Bills Committee, which sought to satisfy those concerns. Schedule 1 to the amended Bill now includes a new sub-paragraph (4) to the amendment of Section 91 of the County of Merseyside Act 1980, which, for brevity, I shall refer to as the 1980 Act. The new sub-paragraph obliges Merseytravel to ensure that toll revenue used for any purpose other than the operation, maintenance and policing of the tunnels will not contravene the EU directive. It also obliges Merseytravel to apply sufficient toll revenue to ensure the safe, efficient and economic management, operation and maintenance of the tunnels before applying toll revenue for any other purpose.

The Government believe that including this sub-paragraph will satisfy the legitimate concerns about a possible breach of the EU directive. It is important to include the sub-paragraph within the Bill because of the extra powers that the Bill gives Merseytravel (unlike operators of some similar undertakings) to be able to apply toll revenue for purposes other than the operation, maintenance and policing of the tunnels.

Schedule 1 to the amended Bill also contains a new sub-paragraph (5) to the amendment of Section 91 of the 1980 Act. That new sub-paragraph places a duty on Merseytravel to consult with the people of Merseyside once all debts have been repaid on the justification for not reducing tolls and for retaining the ability to increase tolls. Surely, that has been at the heart of any of the objections made with any force today.

The Government are satisfied with the amendments because they meet the concerns that have been expressed. The noble Baroness, Lady Scott of Needham Market, covered many other issues raised over several years and I shall not repeat those. I conclude simply by saying that the Government have no objections to the Bill going forward.

9.30 p.m.

Lord Smith of Leigh

My Lords, in replying to this interesting and wide-ranging debate, I thank all noble Lords who have contributed to it. I appreciate the support of the majority of speakers and the way they developed the arguments in favour of the Bill. I appreciate in particular the attendance of the right reverend Prelate the Bishop of Liverpool, showing his support. I am glad of the support of the Liberal Democrat opposition and that of the Government through my noble friend Lord Triesman, who has just confirmed that they have no objections. The legislation will mean better management of the tunnels. It will promote public transport and, by doing so, will encourage a better environment in Merseyside.

In his typically robust contribution, my noble friend Lord Harrison defended tunnel users, a position perhaps not consistent with Labour's transport policy of the moment. He was concerned about the use of surplus income from the tunnels for wider purposes. However, my noble friend Lord Berkeley covered the point by explaining what happens in London and elsewhere. It is not inconsistent to regard use of the tunnels as a transport mode. Merseytravel is under an obligation to encourage more people to use public transport and to improve transport facilities, including those in the Wirral.

Seeing that I was to introduce the Bill in this House, the Mersey Tunnel Users Association contacted the local newspaper in Wigan. As a result, a typical headline appeared: "Leader upsets Scousers". I am not sure whether that is a benefit, but judging from the contributions of my noble friend Lord Harrison and the noble Lord, Lord Wade, I must have upset those from Chester as well.

I want to say how much I appreciated how the noble Lord, Lord Hunt of Wirral, in moving his instruction and responding to my opening remarks, graciously agreed not to oppose the Second Reading of the Bill. I, too, had boyhood experiences of travelling through the Mersey Tunnel. I was always concerned that we should emerge on the other side because I was nervous about it. However, as my noble friend Lord Triesman pointed out, the comments of toll collectors anticipating future free use of the tunnels were somewhat naive. The current operators cannot be held to that. As I said in my opening remarks, the costs of operating and maintaining the tunnels are likely to increase.

The financial accounts of Merseytravel, in particular the elements applying to the tunnel operations, show that in 2004–05 they will break even because of taking out an additional loan. There are problems.

The consultation exercise is important and all in public life must listen to the responses. However, that does not mean to say that we must follow consultation exercises slavishly. As my noble friend Lord Berkeley pointed out, it is not surprising that road users do not want to see increased tolls. Such responses are partial within any form of consultation and need to be properly interpreted.

The promoter of the Bill, Merseytravel, has sought to put forward legislation that meets the concerns of everyone. I shall comment on what was said by the noble Lord, Lord Luke, who said that it is being promoted by Labour local authorities. If he checks the record in Merseyside. I think that he will find two Labour authorities, two hung authorities and Liverpool still controlled by the Liberal Democrats. However, we are to have local elections later this year and on this side of the House we hope that that may change. For the moment, however, it is a Liberal Democrat authority.

We in Greater Manchester have supported Liverpool as the future city of culture. However, my noble friend Lord Faulkner was right to ask why, in celebrating the culture of Liverpool, do we have to have the streets clogged with traffic through free use of the tunnel? That is not the way to celebrate culture in the city.

I hope that the Select Committee will be left to turn to the task in hand. No doubt the members will be informed by the contributions made by noble Lords in our debate. I hope that the noble Lord will think it unnecessary to move his somewhat restrictive instruction to the committee, thus enabling it to do its job and allowing the Bill to come back to the House for further consideration.

On Question, Bill read a second time, and committed to a Select Committee.

9.35 p.m.

Lord Hunt of Wirral

rose to move, That it be an instruction to the Select Committee to whom the Bill is committed that they should consider—

1. (a) whether the power of the Secretary of State to increase all or any of the tolls by order is justified; and
2. (b) whether the provisions of the Bill provide an adequate mechanism for taking into account the views of the five district councils on Merseyside (the Metropolitan Borough of Wirral, Liverpool, Sefton, Knowsley and St Helens) in respect of:
1. (i) increases in tolls;
2. (ii) the use of surplus tunnel toll income to improve public transport services on Merseyside; and
3. (iii) the desirability of repaying the existing debt on the tunnels before applying surplus toll income to other projects.

The noble Lord said: My Lords, I understand from the Clerks that this is an appropriate moment for me to address the points that have been made about the instruction because I still believe it to be necessary.

First, I can tell the noble Lord, Lord Dixon, that in his day the Government in the other place would have adopted a position of strict neutrality. If, however., he reads the speeches—of Labour Members, in particular—he will see that the Bill has only ever come to this place after lengthy opposition in the other place because the Government made time available for the debate to continue in government time. We always follow a better code of practice than the other place in dealing with private Bills. As one Minister admitted—perhaps inadvertently—not having followed the neutral example of the noble Lord, Lord Triesman, in this debate, the Government were whipping in favour of the Mersey Tunnels Bill. In the days of the noble Lord, that would never have happened. Of course, if it had not happened, we would not have the Bill before us now.

I wish to address one or two of the points made by the noble Lord, Lord Faulkner, who was the only noble Lord to address the instruction as such, although one or two others referred to it. First, the noble Lord said that the instruction would cause delay; secondly, that it would interfere with the rights of councils; and thirdly, that it was entirely unhelpful. The real problem, especially with the Birkenhead Tunnel, is that it links the two cities of Birkenhead and Liverpool. There is another crossing—a bridge at Runcorn—that is toll free. That crossing is completely free to cars, which can come and go as they please.

It is interesting that in a survey on 4 October 2002, the bridge linking Runcorn and Widnes carried exactly the same number of vehicles in a 24-hour period as the tunnels. The tunnels have eight lanes and the road bridge has four. The points made by noble Lords that there is enormous congestion and a surfeit of cars using the tunnels is only when people are going to and from work. There is huge feeling among the people in Liverpool and Birkenhead because if they go to Runcorn to cross, it is free. Let us not forget that we are talking about Merseyside, which is a deprived area, and the cars going through the tunnels are not of the greatest value. Often that is the only way in which people can get to work—especially at certain hours of the day. They also need to carry their equipment, and so on.

Let us examine and understand the strong feelings. The position is unlike other city centres, such as London. We do not have to pay a toll on the bridges or the tunnels. There has always been a strong view in Liverpool and Birkenhead that the tolls are to pay off the debt on those marvellous tunnels that take people to and from work. But the amount produced by the tolls must eventually result in the payment of their construction costs so that the tolls will fall once the debt has been repaid.

With regard to the point made by the noble Lord, Lord Faulkner, that it will cause delay, there is already a petition, which is why the Bill will now go to an Opposed Bill Committee. As the noble Lord, Lord Harrison, mentioned, that petition is from the Mersey Tunnel Users Association. Many of the points raised in the petition, which I am not permitted to mention in my instruction because they are already covered by the petition, will result in close scrutiny of the Bill.

I feel, and I am strongly supported by those who have spoken on this side of the argument, that the committee should consider very carefully the points that I have raised in the instruction. The first point is that there should not be two ways of raising tolls. The Bill not only allows for automatic increases in accordance with the RPI but also perpetuates the old system of having a mechanism for a public inquiry and for the Secretary of State to authorise increases over and above the rate of inflation. I hope that the committee will look at the instruction from the point of view of the five councils.

The noble Lord, Lord Berkeley, said that in many ways the instruction is not necessary because there are elected councillors. However, let us not forget that those councillors are not elected to the Mersey Passenger Transport Executive. They are voted on to the MPTE by their own respective councils. The point was made that they could be removed by the councils. I hope that noble Lords will accept that it would be far better to ask the committee to check that the views of the five councils are being carefully considered, alongside the views, as the noble Lord, Lord Harrison, pointed out, of the Mersey Passenger Transport Executive.

The noble Lord, Lord Berkeley, made the point that there should be a 2008 toll-free gridlock. As I have already demonstrated, the bridge is free. The tunnels being free as well would not create a huge gridlock. If one uses the tunnels at most times of the day, it is fairly easy to get through. The problem of congestion arises only as a result of people going to and from work first thing in the morning and in the evening. I have already demonstrated that the four lanes on the bridge are equivalent to the eight lanes of the tunnels in relation to the amount of traffic that they carry. The problem is that the congestion arises early in the morning and late at night.

Lord Davies of Coity

My Lords, I thank the noble Lord for giving way. The noble Lord says that there would be no greater congestion if the use of the tunnel was free of charge. Does he not think that people now travelling on the bridge would instead go through the tunnel, thereby increasing the traffic flows?

Lord Hunt of Wirral

My Lords, I agree that that may happen. However, the majority of the traffic on the Runcorn bridge would be travelling to and from work in that direction at peak hours, and those of us who are familiar with the area know that they are not people making what is a 30-minute detour from Birkenhead and Liverpool to go over Runcorn bridge and back again. I therefore do not believe that it would make a significant difference, but I have to acknowledge that the noble Lord may be right; there may be some difference. Interestingly, over the past 10 to 15 years the volume of traffic has gone neither up nor down. The total number of vehicles was 25.1 million in 1995 and 25.2 million in 2001–02.

If any noble Lord wants to make any further comment on my instruction, I shall be happy to give way. However, I hope that when noble Lords vote on the instruction, they will see it as a mechanism for highlighting to the committee the points of concern.

I know that the committee will carefully read Hansard and consider some of the points. By stressing them in the way that I have, I hope it will give the Committee an opportunity to recognise the main areas of concern and to deal with them before the Bill comes back before your Lordships again. I beg to move.

Moved, That it be an instruction to the Select Committee to whom the Bill is committed that it should consider—

1. (a) whether the power of the Secretary of State to increase all or any of the tolls by order is justified; and
2. (b) whether the provisions of the Bill provide an adequate mechanism for taking into account the views of the five district councils on Merseyside (the Metropolitan Borough of Wirral, Liverpool, Sefton, Knowsley and St Helens) in respect of:
   1. (i) increases in tolls;
   2. (ii) the use of surplus tunnel toll income to improve public transport services on Merseyside; and
   3. (iii) the desirability of repaying the existing debt on the tunnels before applying surplus toll income to other projects.—(Lord Hunt of Wirral.)

9.45 p.m.

On Question, Whether the said Motion shall be agreed to?

Their Lordships divided: Contents, 26; Not-Contents, 27.

Division No. 1
CONTENTS
Anelay of St Johns, B.	Jones, L.
Astor of Hever, L.	Luke, L.
Attlee, E.	Lyell, L.
Brougham and Vaux, L.	Montrose, D.
Cope of Berkeley, L.	Newton of Braintree, L.
Dixon-Smith, L.	Noakes, B.
Fookes, B.	Northesk, E.
Fowler, L.	Seccombe, B.
Harrison, L.	Shaw of Northstead, L.
Henley, L. [Teller]	Skelmersdale, L.
Hooper, B.	Waddington. L.
Hunt of Wirral, L.	Wade of Chorlton, L. [Teller]
Inge, L.	Wilcox, B.
NOT-CONTENTS
Addington, L.	Liverpool, Bp.
Berkeley, L.	McNally, L.
Campbell-Savours, L.	Mar and Kellie, E.
Clark of Windermere, L.	Miller of Chilthorne Domer, B.
Davies of Coity, L.	Pendry, L.
Dean of Thornton-le-Fylde, B.	Rennard, L. [Teller]
Dixon, L.	Roper, L.
Eatwell, L.	Scott of Needham Market, B.
Faulkner of Worcester, L. [Teller]	Shutt of Greetland, L.
	Simon, V.
Gale, B.	Smith of Leigh, L.
Haskel, L.	Thomas of Gresford, L.
Hogg of Cumbernauld, L.	Walmsley, B.
Lea of Crondall, L.	Whitty, L.

Resolved in the negative, and Motion disagreed to accordingly.

House adjourned at five minutes before ten o'clock.