The Department for Transport's Annual Report 2007 (HC 313-i) Transport Committee 30 Jan 2008

Q111 Mr. David Clelland: I am a bit concerned about the possible effects of these cost overruns. I noticed in three schemes in the South-East involving the A21 and the A23 that the cost overruns are something of the order of £140 million. That is money that those of us who live in the North-East would dearly like to see spent in our region. We still feel that we get a raw deal in terms of highway spending in the North-East. How are these cost overruns going to affect regional funding allocation or are they going to affect regional fund allocation in the future?

Ruth Kelly: There is a major piece of work which is happening at the moment within the Department for Transport and the Highways Agency which is making sure that we have robust assessments right across our roads programme, so going back and looking road by road at how the estimation was done, making sure that is on the best possible basis and working out, as it were, how much we can afford to commit as an investment to roads over the next number of years. That work is currently ongoing. I hope to be in a position within the next few months to make a definitive statement about where we are on costs, which roads we are committed to see being delivered over what timescale going forward. I hope that you will have confidence in the figures and that regions like the North-East feel that they are being treated fairly.

Q112 Mr. David Clelland: Given the overall expenditure of your Department as it is distributed nationally, do you feel it is distributed on a fair and reasonable basis, given what some of us feel is the over-concentration of spending in the South-East of England to the cost of the rest of the nation?

Ruth Kelly: To take your point on the regional funding allocations, that is allocated on a per capita basis, which I think most people would consider to be fair. I understand there are fewer people living in the North-East, but it is at least a reasonable way I think of allocating funding. We have always said that if the regions want to come forward with an alternative formula on which they can agree, then we would consider adopting that and allocating funds through the RFA programme, but at the moment that seems to us to be the fairest and best of allocation resources.

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Q144 Mr. David Clelland: The Secretary of State said earlier something about the possible effect of cost overruns. One of the worst congested roads in the country is the Gateshead Western Bypass, a road we discussed before. We have been told that the earliest we can expect any major improvements to that road is 2015. That is far too long as far as we are concerned in the region for that project. Are you suggesting, Secretary of State, that even that date might be put back as a result of these cost overruns?

Ruth Kelly: Mr Clelland, I am not suggesting anything at the moment. I know that you have raised this issue on previous occasions. This is a very complex project. The Highways Agency is doing a lot of work at the moment in assessing what the right approach to this is. For the short term, the Highways Agency is investigating measures to improve the operation of the A1, which I hope and expect is welcome locally, including for example measures to improve incident management and so forth, which is tackling congestion on that section of the road, but they are also exploring what the right solution is for the future. Clearly, we will have to make decisions about that, alongside other road schemes. I am not in a position today to speak about that.

Q145 Mr. David Clelland: The date which the Highways Agency itself has published is 2015. All I was asking is: are we now seeing, as a result of these cost overruns, that that might be reassessed and even put back further?

Ruth Kelly: I am not suggesting that today because I do not have the information about what the pressure on the roads budget is, but what I have said to this Committee is that over the next couple of months I will be able to take a firm view as to what roads are being prioritised.

Q146 Chairman: We would like you to give us that information as soon as you have it available.

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Q172 Mr. David Clelland: On Woodhead [tunnel] before we leave it, are you saying, Secretary of State, that the National Grid are going to lay their cables in such a way as they would not interfere with the tunnel being used, or are you saying that they will lay their cables but there may have to be some alterations if the tunnel is used after that, which would obviously add to the cost of bringing the tunnel back into use?

Ruth Kelly: I think there are two possibilities here. It is either the case that the old tunnels could be used for rail services or indeed, were the new tunnel to be needed, then I think those cables would have to be re-laid. That is one of the issues that I am looking at at the moment.

Q173 Mr. David Clelland: So the National Grid would have to lay the cables in such a way that the tunnel would be able to be brought back into use without having ---

Ruth Kelly: They have given us the assurance that their laying of the cables in this tunnel would not preclude their future use. I am not saying there will not be any expense associated with that but it would not preclude their future use.

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Q232 Mr. David Clelland: Does the Government intend to introduce a national road pricing scheme?

Ruth Kelly: It is certainly the case that Roy Eddington said there needs to be widespread road pricing if congestion is not to increase, I think about 30% was identified by 2025, and that it would be a severe cost to the economy. The approach taken so far is to try and tackle urban congestion. Roy Eddington also said that 80% of all congestion was in urban areas; 80% of the likely increase to 2025 was to be in urban areas; we have as you know set up the transport urban innovation fund to encourage local areas to come forward and bid for robustness as part of a package for public sector investment in transport infrastructure; we want to have a debate in the light of progress in those areas while we simultaneously in parallel examine whether we have the technology in place, sophisticated technology, that would enable us to have time/distance/place charging, so a sophisticated form of road pricing. We have not made any decisions on national road pricing at this stage because we do not know if the technology would work in the way that would deliver both an enforceable system acceptable to public opinion and which dealt with public privacy issues, which are rightly highlighted in the debate, and we have not seen how the debate has been progressed in those areas where congestion is worst.

Q233 Mr. David Clelland: Is there not any evidence from other countries as to whether technology works for road pricing?

Ruth Kelly: It is certainly the case that countries like Holland have said they are committed to introducing national road pricing, but in countries which have accepted the case in principle I have not yet seen any system which in practice now is able to deal with the sorts of issues I have raised. There is a lot of research and development and trialling work to be done to know precisely what sort of technology would enable that to happen.

Mr Devereux: It is clearly possible today to do some road pricing in London as it happens on the roads in France. The thing which we are still waiting to see demonstrated, which is why we put money into the pilot projects, is to see the entire system work if it is on a satellite basis that does not then require gantries and barriers. Many people come into the office and explain it is all quite trivial and you just need to connect this piece and this piece and it will be fine but nobody has actually demonstrated that, and although, as you say, the Dutch are committed to introduce precisely such a system, they have got no, as it were, working system which they are about to roll out. They have gone for the political commitment first and sort the details out afterwards.

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Q237 Mr. David Clelland: How is the strategy of relying on local authorities to introduce road pricing working?

Ruth Kelly: We have two bids in at the moment from Manchester and Cambridge; we are considering those and an announcement will be made in due course. I think there are ten areas which are currently benefiting from money that we give them to help them work up bids locally; we look forward to some of those coming forward with worked-up bids in due course, so it is clearly an appetiser to look at road pricing as part of a package where there is significant investment in public transport alongside that - in fact first.

Q238 Mr. David Clelland: So the investment in public transport would have to come before the road pricing presumably?

Ruth Kelly: That is right.

Q239 Mr. David Clelland: And that is the strategy your Department is working on, that we get investment in public transport before road pricing?

Ruth Kelly: Yes. It is absolutely right that people need to feel they have alternatives.

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Q291 Mr. David Clelland: As we have established we are not likely to see a national road pricing scheme in the near future, should the Government return to the idea of some form of lorry user charging?

Ruth Kelly: Lorry user charging is very difficult to do, and I know this emerged post the 2000 fuel protests and it was abandoned I think in 2005 in the context of moving to international road pricing, but the real problem here is dealing with congestion. We are determined to deal with congestion which is why we are trialling the new technology, that would have implications not just for lorries and heavy goods vehicles but also potentially for passenger vehicles, and it is why we are working with urban areas to deal with urban congestion, while debating whether there should be more widespread national road pricing. Now I think that is a very fruitful way to go but we have to deal with technical difficulties first.

Q292 Mr. David Clelland: Do you think it is fair that United Kingdom hauliers continue to pay towards the cost of maintaining the infrastructure while their foreign competitors often do not make any contribution?

Ruth Kelly: I do think there is an issue there. It is an issue that would be best dealt with by dealing with the impact on congestion through a road pricing scheme, but we do not suffer the same impact on the national roads infrastructure as happens, for instance, in other European countries such as Germany where they have very significant --

Q293 Chairman: Secretary of State, you do know that other countries have a system of making sure that our freight drivers have to pay for acqui communitaire, and there is a completely different system, and we have been knocking this one around this Committee for a number of years. That is why Mr Clelland is asking you what are you going to do about foreign drivers, because not only does it distort competition but it is very much resented, and, in fact, it actually distorts the contracts that individual freight companies are able to offer?

Ruth Kelly: We are undertaking a freight data feasibility study and working with the industry to see whether it would be possible to impose a so-called vignette, but, as I am sure this Committee knows, there are European rules in place which mean you cannot charge more than the external infrastructure costs imposed by foreign lorries.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

The full transcript may be read here.