The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I wish briefly to set out the Government’s position on the Bill and the background to it. In short, the Government supports this Bill, and in recognition of that I am joined on the Front Bench not only by my right hon. Friend the Member for Putney (Justine Greening), but by the Minister of State, Department for Transport, my right hon. Friend the Member for Chelmsford (Mr Burns). We see the Bill as an essential part of a sustainable settlement for the management and finances of the Humber bridge to endure for the next 25 years or so. This is the outcome of considerable work by all the local MPs—of all parties—the four Humber area local authorities and the Humber Bridge Board, working together to respond positively to the Government’s Humber bridge review. I would like to record my appreciation of that work.
The Government launched the Humber bridge review on 14 June 2011. We consulted widely, and completed work on assessing the economic impacts of the bridge, and the level of its tolls, on the Humber area economy. We announced our conclusions on 29 November 2011. The Government recognised that the Humber bridge has a unique history, and had a unique burden of interest relative to its construction cost, and therefore offered to write down some £150 million of the bridge debt. That was conditional on the bridge board and local authorities submitting a proposal for reform of the structure of the bridge board, and the Humber area local authorities taking on full responsibility for the remaining lower level of debt, and sharing that responsibility out much more broadly and realistically between them.
The bridge board and local authorities responded positively, and came forward with a proposal for reforms, which the Government accepted, and a deal was struck on 29 February 2012, almost a year ago to the day. Some of those reforms could be enacted by the Government with secondary legislation, and that was done during 2012, as I will describe. Other reforms required primary legislation, and the Government agreed to support a private Bill to be promoted by the bridge board to achieve them—that Bill is what we are supporting today.
Looking at the reform package as a whole, the core principles for the governance of the bridge set by the Humber Bridge Act 1959 do not change. The first of those is that the bridge is owned by the Humber area community through the Humber Bridge Board, with democratic accountability through local authority members forming a majority on the board. The second is that the costs of building and maintaining the bridge be borne by its users, through the charging of tolls. That is the long-standing practice for major estuarial crossings in England and Wales. The third principle is that the bridge board has the responsibility to run the bridge efficiently and safely, and to set an adequate level of toll to meet its costs. Any shortfall in toll revenue is made up by a levy on the bridge board’s constituent local authorities. Turning to the component parts of the reform package, two reforms were enacted by the Government in 2012. First, the Humber Bridge (Debts) Order 2012 wrote down £150 million of the £332 million bridge debt, and set a fixed interest rate of 4.25% on the remaining debt. That enabled the bridge board to reduce the bridge tolls substantially on 1 April 2012, including halving the toll for cars from £3 to £1.50. Incidentally, the Chancellor was given the credit for announcing that, but it is only fair to say, even if I get myself into trouble, that the driving force in securing the reduction was the right hon. Member for Putney rather than the Chancellor.
In the first nine months of reduced tolls, 429,000 additional vehicle trips were made across the bridge, an increase of 9.2%. Secondly, the Humber Bridge Board (Membership) Order 2012 reduced the bridge board from 22 local councillors to four, one from each of the Humber area local authorities.
This private Bill provides for those parts of the reform package that require primary legislation. I want to draw attention to two reforms that meet the Government’s requirements for the February 2012 deal. First, clause 3 brings representatives of the local enterprise partnership onto the board, giving the Humber area business community a stake in the good management of the bridge and the opportunity to bring its energy and commercial expertise to its day-to-day running. Secondly, clause 7 ensures that the incentive on the bridge board to set a toll adequate to meet its costs is shared equally between all the Humber area local authorities. That is a major improvement from the previous arrangement, when approximately 98% of the cost of any revenue shortfall fell on the council tax payers of the city of Hull.
The other provisions in the Bill have been worked up by the bridge board and local authorities to modernise the powers of the bridge board to manage its affairs efficiently and transparently and to allow it to act commercially to develop sources of revenue other than tolls, while remaining democratically accountable to the local community. On that basis, we have agreed as a Government to support them. I shall not go through them all now, but I want to draw attention to clause 11, which removes the Secretary of State from the decision-making process on setting the level of tolls while retaining the local community safeguards and rights to be consulted on any change in the tolls. That will save much time and taxpayers’ money and is a good example of the implementation of the Government’s localism agenda.
The Humber bridge review provides an affordable and long-term sustainable solution for repaying the Humber bridge debt and allows the bridge to play its fullest possible part in the success of the Humber area economy and community.
Mr Graham Stuart
The Minister will be aware that 70% of the bridge’s capacity, with the highest tolls in the country, was unused in an area of high unemployment and low average income. This is a tremendous step forward for the area and, when we combine it with the improvements to the A164 and the Beverley southern relief road, he and other Ministers can be proud of the coalition Government’s contribution to the area and its transport infrastructure at a time of such general austerity.
Norman Baker
I am grateful for those comments and concur with the analysis that this will make a significant difference to the economy of the area, for which Members across the House have argued successfully.
The agreed reforms support effective local management of the bridge and accountability to the local community, taking into account the views of all stakeholders and ensuring value for money for the taxpayer. The private Bill is an essential part of the reform package, and I commend it to the House.