M4 Upgrading: South Wales

David T C Davies Excerpts

Wednesday 14th November 2018 Westminster Hall

[Stephen Crabb]

The hon. Lady makes an important point about the new convention centre. We have all seen it being built while driving along the M4, and we have been encouraged by how it has come on. It is a major new asset for business in south Wales, but if it is to achieve its potential, we need that traffic to flow much better.

[David T. C. Davies (Monmouth) (Con)]

Can my right hon. Friend confirm that when that wonderful new convention centre opens, one of its clients might be the Conservative party? It could host one of its next conferences there. Would he welcome that? Perhaps we could invite the hon. Member for Newport East (Jessica Morden) along as well.

[Stephen Crabb]

Nothing would please me more than seeing the hon. Member for Newport East (Jessica Morden) formally open a Conservative party conference in south Wales. I have no particular influence over where Conservative party events are held, but the Minister is listening with wide open ears, and I am sure he will feed those views through to the party chairman.

When it comes to major events, however, everyone knows that our Achilles heel is our transport problems. Of course we welcome the UK Government’s decision to scrap the tolls on the Prince of Wales bridge, which is estimated to save regular commuters up to £1,400 a year. We want that to attract new investment, jobs and tourism to Wales. The Welsh Government’s report suggests that our action on that will boost the Welsh economy by £100 million. However, as the hon. Member for Torfaen (Nick Thomas-Symonds) said, modelling predicts an increase of up to 20% in traffic as a result of the tolls being removed. The congestion issues around the Prince of Wales bridge and Newport are already severe, and the increased traffic will create further problems, without there being additional infrastructure in place. As the Freight Transport Association says,

“This places greater emphasis on ensuring that the M4 upgrade is fit for purpose.”

The UK Government have shown that they are committed to boosting the Welsh economy, helping commuters and businesses, and increasing investment. We need the Welsh Government and the Assembly to step up and deliver the M4 upgrade.

As many hon. Members will be aware, a solution has been on the table for more than 20 years. In March 1989, the then Secretary of State for Wales commissioned the south Wales area traffic survey of possible solutions. The subsequent 1990 report identified the need for substantial improvement to the M4. As a consequence, a proposal for a relief road around Newport, a new dual three-lane motorway to the south of Newport, which was later known as the new M4 project, was included in the Welsh trunk road forward programme in 1991. An M4 relief road preferred route was published in 1995 and amended in 1997.

There were further iterations of the relief road plan over the years once responsibility for the road was devolved to the Welsh Assembly, but essentially the plan has followed the original work done in the mid and late ’90s. A draft Welsh Government plan was published in September 2013 and was the subject of public consultation from September to December that year.

Five years on, we are still waiting for a decision by the Welsh Government. That brings us to the question of financial powers and the limits on Welsh Government capital borrowing, which was referenced in the Budget. I am aware of the argument that occurred immediately after the Budget between Welsh Ministers and UK Ministers about whether an extension of borrowing powers should be linked to the delivery of the M4 relief road. I have no interest in getting involved in that, other than to note that the use of the M4 upgrade as a justification for securing new powers from Westminster has been a long-running feature of the devolution debate.

Indeed, upgrading the M4 may have been used as an argument in the original referendum campaign for why an Assembly was needed in the first place. It was certainly used as an argument in the debate in 2013 about full law-making and financial powers that led to the Silk Commission, in which the First Minister said:

“We literally could not do things. We could not improve the M4 without borrowing powers—it will not happen.”

The 2013 deal between the Welsh Government and the UK Government was to give the Welsh Government early access to those original borrowing powers precisely so that the M4 project could get going.

The project is now being used as an argument for securing even more borrowing powers. I can understand the need to extend the capital borrowing limits, given that the projected costs of the M4 upgrade are now higher, but part of me is starting to question whether some are using the project as a fig leaf to enable agreement on more powers and debt for the Welsh Government, without there being any serious intention of getting the M4 fixed. Given the passage of time, I can understand the considerable scepticism in some circles about the project. I hear the phrase, “It will never be built”, quite a lot around Cardiff.

--- Later in debate ---

[David T. C. Davies (Monmouth) (Con)]

I commend my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) and the hon. Member for Newport East (Jessica Morden) for the way they put their points across.

No less a figure than the late Rhodri Morgan, former First Minister of Wales, described the M4 as the great infrastructure project in Wales of the 20th century. He recognised that the M4 is not just a matter of local convenience for people living in and around Newport; it also has a huge impact on the whole Welsh economy. Those of us from the Newport area know what it has done for that area. We have seen the development of Severnside, and my right hon. Friend mentioned the major sporting and musical events that now take place in Cardiff. I very much hope that the convention centre will host the Conservative conference sometime soon—I am told that it is the largest conference, and the one that generates the most income locally, so I am sure the whole of Newport would welcome it. We want to see that happen. We have also seen the development of the haulage and warehousing industry along the M4, particularly in the Severnside area.

The M4 has wider implications as it is one of the European Union’s critical routes. Although it is not labelled as such, it is part of the E30, which stretches all the way from Cork to Omsk, so even the European Union recognises its importance. As a great fan of the European states—it is important that we trade with all of them—I very much hope that, if they are going to tie us up in red tape, they insist that we maintain that critical piece of infrastructure.

We all know that there are many problems with the M4—other hon. Members have highlighted them—and this is not just about the Brynglas tunnels area. There are massive and unnecessary delays westbound, towards the Coldra roundabout—unfortunately, right where the convention centre is—and eastbound, coming out of Cardiff towards Tredegar Park, which has an impact on residents of Cardiff.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I apologise for not being here at the start of the debate. I was in a Delegated Legislation Committee. The hon. Gentleman is making a very important point. Clearly, the road infrastructure around the east of Cardiff has a huge impact on my constituents. I consider myself an environmentalist. I want more investment in rail, cycling and pedestrian opportunities, but we have to recognise that there is an environmental consequence to all that traffic queuing into the east—particularly around Rover Way, Splott, Tremorfa and those eastern links. Does he agree that that can have a serious impact on air quality?

[David T. C. Davies]

Absolutely, I do agree. I am also an environmentalist who recognises that to protect the environment we have to generate the funds, and to generate funds we have to have a thriving economy. That is why, generally speaking, the western European and wealthier nations have a better environmental record than some of the poorer nations in the rest of Europe. I very much agree with the hon. Gentleman’s point.

I am concerned not just about the increase in traffic that we will see as a result of the Conservative Government’s welcome decision to end the tolls on the Severn bridge—we will see the benefits of that only if this road is upgraded—but about the possibility of a major problem happening in the Brynglas tunnels, which would effectively shut the M4 and close off one of Wales’ major pieces of infrastructure. We need to have that alternative because the day will come when major work will have to be carried out in the Brynglas tunnels, and if there is no M4 relief road there when that happens the result could be absolutely devastating for the whole economy.

I very much hope that the Government in Wales get on with this. They have been given the powers and the money to do it. If they decide to go ahead I hope they will learn a few lessons from what has been going on slightly to the north where we have seen, I am afraid to say, a practice of Ministers turning up to be photographed in hard hats and high-vis vests for the dualling of the heads of the valleys road—a very welcome project—but not wanting to meet with residents who have been negatively affected by the work that has taken place.

Obviously, whenever a major piece of road infrastructure is built there will be inconveniences for local residents. It is important that those are recognised and dealt with by the responsible Ministers. I think we have agreed, on all sides, that there is a real problem here and there is a solution on the table. The only solution, I believe, is the black route. We have had experts poring over all the alternatives and we have had various people coming up with all sorts of schemes, involving trams and Lord knows what, but the reality is that there is only one scheme that will do it.

My understanding is that there are three candidates waiting to take over from the First Minister. Of those three, only one has given a 100% commitment to building this route. I hope that the Minister will do everything possible to ensure that the Welsh Government have all the power and money they need to build that road, and encourage them to do so as quickly as possible, given the welcome decision his Department has made about the tolls.

I urge my friends opposite, if I may call them that, to do whatever they can to influence the result of their own election and make sure that the candidate who wins is the one who is going to build this road. I am absolutely convinced that after the next Welsh Assembly election we are going to end Labour party rule in Wales. We are going to get rid of one-party rule and we are going to have a Conservative First Minister, but the M4 relief road cannot wait for that. Since we are going to end up with a Labour First Minister, we might as well have one who is going to take one very useful decision.

[Guto Bebb]

I express my support as a north Wales MP. Quite often in Wales, we have the argument that all the funding goes down south, but the view in north Wales is that we will not see major updates to the A55 until this project is off the ground. The view in north Wales is that if we are going to have the improvements to the A55 that we need, we need to see the decision taken on the M4 relief road sooner rather than later.

[David T. C. Davies]

I thank my hon. Friend and simply add that road building is absolutely vital to the economy. I will certainly be supporting the A55.

[Chris Davies (Brecon and Radnorshire) (Con)]

I thank my hon. Friend for giving a superb speech, as always. It would be a pity if mid-Wales were left out, if north Wales is being mentioned. One might wonder why an MP for mid-Wales is keen to see the M4 relief road happen. Last week, a haulier from mid-Wales described to me how, because of the Brynglas tunnels, most of his drivers now have to go up to Abergavenny, across to Merthyr Tydfil and down to Carmarthen, before going back on to the main road to get to west Wales. That is putting extra burden on other parts of Wales. This relief road is long overdue and I hope we will see it come forward very shortly.

--- Later in debate ---

[David T. C. Davies]

A good speech usually requires a good peroration and two of them have now been blown out of the water. I very much hope those drivers are using HGV sat navs, not ones designed for cars, so they are not responsible for driving straight through the centre of Abergavenny, which is causing a separate pollution problem.

What can I say? I have said it all. That road needs building as soon as possible and I very much hope that heads will be put together in all parts of the House—and on both sides of the River Severn—to sort this out as quickly as possible.

Oral Answers to Questions

David T C Davies Excerpts

Thursday 29th October 2015 Commons Chamber

[Mr McLoughlin]

I agree that more needs to be done to improve the links between Sheffield and Manchester, and I very much hope that when we announce the new franchise for both TransPennine and Northern Rail we will go some way to meeting the demands for that. The two projects the hon. Gentleman specifically talks about are huge projects. Work is being done at the moment by Colin Matthews on whether a tunnel is the right way forward, and we will expect more updates on that by the Budget of next year. I do understand the hon. Gentleman’s points on HS3 and the infrastructure commission will look at them.

[David T. C. Davies (Monmouth) (Con)]

T6. Figures released by the Department show that the Severn bridge is currently generating about £78 million-worth of profit over and above the cost of maintenance of that bridge. Does that not go to prove that as soon as it goes back into public ownership on 1 April 2018, there is a great opportunity for this Government to slash the tolls on the bridge—bring it down to under £1 per car —and still have enough money to pay for the maintenance of it?

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

The toll levels are currently set by the concessionaire, Severn River Crossing, to repay the construction, finance, maintenance and operations costs. We are expecting the costs to have been recovered early in 2018, and at that point the concession will end and the crossings will revert to the UK Government. We are currently working on what the future of tolling might be. I have heard what my hon. Friend has said and I will keep him updated on progress.

Severn Bridges (Tolls)

David T C Davies Excerpts

Tuesday 21st July 2015 Westminster Hall

[David T. C. Davies (Monmouth) (Con)]

I congratulate the hon. Member for Newport East (Jessica Morden) on securing the debate. I associate myself with every single comment that she and others made, with the possible exception of the one about whether we should hand control of the bridges over to the Welsh Assembly—I will keep out of that one for now. The Government should realise that Members of all parties from constituencies throughout south Wales agree on this and that we do not consider the existing situation to be fair. We are looking for more than has so far been on offer.

In fairness, the second Severn crossing has been a huge boost to the local economy. The tolling regime was well publicised, so the tolls going up by slightly more than inflation each year should not have come as a surprise to anyone, including the press, because it was all agreed at the time. However, it was also agreed that, once the original cost of building the Severn second crossing and the debt taken on from the first crossing were paid off, the bridges would revert to public ownership. The implication was that the tolls would then end. Now, however, that is not going to happen.

The hon. Lady talked about the impact on the economy. Welsh Assembly Government reports show that the tolls cost the economy of south Wales £107 million a year in lost business, which I can well believe, and there are other impacts. Companies that rely on transport to and from Wales will be put off investing in Wales—I am not in the least bit surprised to hear that anecdote from one of the haulage companies. There is an impact on tourism, which is vital to my constituency, and on people who are on low wages. They have to pay £6.50 a day simply to travel to and from their place of work—although they will all, I hope, receive a pay boost as a result of the Budget. The tolls are a big dent in people’s wage packets.

For the record, I welcome the Government’s announcement that the bridges will come back into public ownership. I do not often call for the nationalisation of industry, but in this case, given that it will lead to a big cut in tolls for constituents, I am all for it—I am a pragmatic man. The Government could do better, however, and I want to go back to the financial issues that the hon. Member for Newport East raised.

The Government say that they received an unexpected cost of £88 million for maintenance of the first crossing, and that is the case. In response, I suggest that all around the country, pieces of infrastructure have had unexpected amounts of money spent on them. I had a quick look on my phone now, and some kind of garden bridge in London will get a £30 million boost from the Treasury as the result of a miscalculation of how much it would cost and how much could be raised from the private sector. That is only one example. I am sure that, if I had the time, I could find dozens from all over the country. For the Treasury, £88 million is not a vast sum of money, but it is a vast sum for the users of the Severn bridges if they are expected to pay it back.

Be that as it may, I want to take the argument a bit further. As the hon. Lady pointed out, when the bridge was built it was assumed that VAT would not be payable. There was then some sort of court case, or the European Parliament was involved, and it was decided that, because the bridges were run by a privately operated company, VAT was payable. As a result, the Government began to charge VAT and received a windfall. We do not have the exact figure, but I have heard various ones, including £120 million, as well as higher figures. In fairness to all users of the bridge, the Minister should first find out exactly how much extra money the Treasury has received as a result of the European decision asking the Government to levy VAT. As the hon. Lady pointed out, it is perfectly reasonable to ask for that information.

With the industrial buildings allowance, again various figures have been floated. I have seen £20 million and £24 million, so presumably the exact figure is of that order. If we take the lower two estimates—only £120 million from VAT and £20 million from industrial buildings—that is still £140 million, which is a lot more than the £88 million that the Government are asking to have back. It is no good the Government’s saying, “Oh well, these things are not hypothecated and it could have gone somewhere else”, because we know all that. The reality is that the Treasury has received a windfall way in excess of the £88 million being asked of the users of the Severn bridge. If my figures are incorrect, I am happy to stand corrected, but I think that we are roughly right.

Furthermore, as the hon. Member for Newport East correctly said, the revenue drawn in is way in excess of the maintenance costs. I know that those costs are significant, because we visited the bridge ourselves. It is an incredible structure. I had not realised that it is constantly moving and that a whole team of people keep the thing safely upright. The managing director told me that it cost more to keep the bridge upright and to maintain it than it does to maintain a large chunk of the motorway network of south-west England—fascinating stuff. Again, total revenue brought in by the tolls is way in excess of the maintenance costs, and we calculated that a toll of about one third of the existing level would be more than enough to pay them. Again, if we as a Committee are incorrect in that calculation, please tell us that we are wrong. I have been using that figure for the past two to three years, and nobody has yet gainsaid it, so I assume that it is roughly right. If that is the case, although we welcome the fact that the Government will bring the bridge back into public ownership and remove the VAT, I speak for many from all parties when I say that that is simply not enough and we would like a much more generous offer from the Government. Wales, the people of south Wales and the users of the bridge in England and Wales have been treated unfairly, all the more so if one compares the situation of the Severn bridge with what is happening to bridges across the rest of the United Kingdom.

With all due respect to the Minister, the questions asked by the hon. Member for Newport East about the revenue that is coming in, the maintenance costs of the bridge, the amount of VAT that the Government received unexpectedly and the level of industrial buildings allowance are perfectly reasonable. If we do not get answers to them, it is unlikely that anyone will accept as fair any future settlement for the Severn bridge.

--- Later in debate ---

[Andrew Jones]

I mentioned earlier that we are already committed by the road investment strategy to work with the Welsh Government, and we are more than happy to continue with all the strategy commitments. As I said, I have already started work with my colleagues in the Wales Office. I am expecting more work to be done over the summer and in the early autumn by my officials in the Department, and will be more than happy to share it more widely as we go forward, but I cannot yet give a specific date. However, it is work in progress, and we are starting that work. It will certainly involve wide co-operation and consultation.

[David T. C. Davies]

Can the Minister supply an answer in this debate to the questions about how much extra money the Government have received in VAT and industrial buildings allowance, and the costs of maintenance? If he cannot give those exact figures today, can he commit his Department to providing them before the autumn? Otherwise, I suspect that hon. Members might decide that they want to apply for another debate, and I will certainly support them if they do.

Infrastructure Bill [Lords]

David T C Davies Excerpts

Monday 26th January 2015 Commons Chamber

[Amber Rudd]

My hon. Friend is absolutely right: it is a win-win for the UK in both potential economic benefit and reducing our carbon footprint.

[David T. C. Davies (Monmouth) (Con)]

In addition to all the advantages my hon. Friend has already mentioned, does she accept that we need to have a shale gas industry to go hand-in-hand with our wind industry, because wind-powered generators require gas generators to back them up?

Rising Cost of Transport

David T C Davies Excerpts

Wednesday 9th January 2013 Commons Chamber

[Mr McLoughlin]

I am grateful to reaffirm to my right hon. Friend the Government’s commitment to adopt what was Lord Adonis’s plan for HS2, and I pay tribute to the former Secretary of State. My right hon. Friend and I disagree on HS2. I believe that it is vital for future investment and opportunities for the whole country. I will say more about that in the House in a few weeks’ time.

[David T. C. Davies (Monmouth) (Con)]

Will my right hon. Friend also mention the rise in transport costs for users of the Severn bridge and say whether there is any possibility of capping those increases when the bridge returns to public ownership in 2017-18?

[Mr McLoughlin]

If I am still Secretary of State in 2017, I will have been the longest serving Transport Secretary. If my hon. Friend will forgive me, I have enough problems on my plate without making commitments for 2017. I look forward, however, to a Conservative Government making that decision—that is as far as I will go towards meeting that commitment at the moment.

The fact that we have capped fares to RPI plus 1% will benefit more than a quarter of a million annual season ticket holders by around £45 a year, and some commuters will be more than £200 better off over the two years. The motion before the House is confused in another way. It attacks the flexibility that allows operators to increase some regulated fares by more than RPI plus 1% if they cut other fares by an equal amount—for example, on Virgin Trains the Rugby to Euston season ticket has increased by almost 1% less than inflation. Today, the hon. Member for Garston and Halewood tried to claim that it was not the last Government who introduced that flexibility, or that such flexibility existed for more than one year. The changes to the agreement, which I can read to her, make it clear. The deed of amendment states:

“With effect from 00.00 on 1 January 2010 Schedule 5.5 of the Franchise Agreement will be amended as set out in the Appendix to the Deed…From 00.00 on 1 January 2011”.

Therefore, the agreement was amended for just one year.

Severn Crossings Toll

David T C Davies Excerpts

Thursday 19th May 2011 Westminster Hall

[David T. C. Davies (Monmouth) (Con)]

Everyone seems to be leaving the Chamber, which is sad because very few issues cause more rows in pubs and constituency surgeries in south Wales than the Severn bridge. You might expect me to declare an interest at this point, Mr Davies, but one of the bits of pub trivia that came out of our inquiry is that I do not need to do so, because neither of the Severn bridges starts or ends in my constituency. One ends in the constituency of Newport East, and the old Severn bridge starts and ends entirely in England before joining the Wye bridge. It would, therefore, be difficult for some of the Members who have left the Chamber to demand that the old Severn bridge be partly administered by the Welsh Assembly Government in Wales, because it does not actually come into Wales at all.

The issue for all of us is the price. It has confounded us in constituency surgeries throughout south Wales and the M4 corridor. It is worth setting out some of the background. The second Severn crossing was built by a consortium of four companies, which became Severn River Crossing. Not only did they build the second Severn crossing, but they took on the debt of the old bridge, which amounted to about £450 million. The deal was that they could collect just under £1 billion, which was linked to inflation, and that, once that money had been collected, the bridge would revert to public ownership. At present, that is expected to happen in around 2017.

It became clear to us during the course of our inquiry that, no matter how angry we might get over the level of the tolls and no matter what impact we might think it has on the economy, there is very little that any of us, including the Minister, can do about it. This is a matter not of the Minister deciding what he wants to set the toll at for any given year, but of straightforward contract law that would be backed up by the courts. The deal was struck in 1992 between the then Government and private companies, and there is no flexibility in it whatsoever.

[Jessica Morden (Newport East) (Lab)]

Was the hon. Gentleman as surprised as I was to see the Welsh Conservatives pledge during the Assembly elections to freeze the tolls immediately?

[David T. C. Davies]

I must admit that that was a surprise to me. It would, of course, have been feasible to do it, but a Conservative Government in the Welsh Assembly—which was, sadly, not to be—would have had to pay back all the money to Severn River Crossing. That would have been a significant amount of money. I am not sure whether the policy applied to heavy goods vehicles—I believe that it applied just to cars—but it would still have been significant. The point is that SRC could not simply have been told to freeze the tolls without compensation being paid, because its shareholders would have had every right to take the Welsh Assembly Government to court. There would have been some practical difficulties in implementing that policy, because I presume that it would have been up to the Welsh Assembly Government to negotiate the rate directly with SRC. I am not sure how far down the line the negotiations went. It would have been feasible, but it would have been a challenging proposition. Sadly, it will not come to pass, because of the efforts of the hon. Lady’s party.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The point is that the Welsh Assembly Government had no locus or power to set anything. These things are set by the UK Parliament, which cannot be changed now. Surely the Government can announce, however, not that we can change the toll now, but that in 2017 the toll will go down to £1. If they did that, it would trigger inward investment now, not then, because people would plan for the future. They could establish their business now in south Wales, so that after 2017 their costs would go down. That is what the Government should do.

[David T. C. Davies]

Once again, the hon. Gentleman has anticipated some of my comments.

Before I turn to 2017, we should have a quick discussion about the impact on the economy. There is, as the hon. Gentleman will recall, mixed evidence about this. There is no hard evidence that the current level of the tolls is having a detrimental impact on the economy. Let me quickly add, however, that there is plenty of anecdotal evidence, which most of us would accept, particularly in relation to areas such as haulage and tourism. I worked extensively in the haulage industry and the situation is not all bad, because a haulage company in Wales competing for business that is local to south Wales has an advantage over an English company in Avonmouth, which would find it harder to compete. Similarly, shopkeepers in towns such as Chepstow might be concerned that, if we got rid of the Severn bridge tolls, it would lead to even more people crossing over and going to Cribbs Causeway, when the current numbers are already causing a problem.

Having said all that, I think that there is an impact on the economy. I do not think that it is as bad as some people have suggested, but there is a negative impact. To give some evidence for that, I remind Members that the previous Government froze the Humber crossing tolls because they felt that the level of those tolls would have made the impact of the economic downturn worse. It is sad that, having decided to do that on the Humber, the previous Government did not feel that they could make the same commitment to the River Severn. If any Opposition Members want to tell me why Wales was discriminated against in that fashion, I would be more than happy to hear their comments.

What we need is hard evidence so that we can put a proposal for 2017 to the Government. I welcome the fact that the Welsh Assembly Government, who do wonderful things on occasions—they are not all bad; like all things, they have advantages as well as disadvantages—are conducting an in-depth assessment of the impact of the current level of tolls on the economy. They will hope to get evidence from the Department for Transport. It was our strong recommendation that the DFT work with the Welsh Assembly Government on this and offer them every assistance and co-operation, and I very much hope that it does.

[Paul Murphy (Torfaen) (Lab)]

The hon. Gentleman has said that the Labour Government did not act on these issues. He might not remember this—it was a long time ago—but 20 years ago I served in the Committee that considered the Severn Bridges Act 1992. The Welsh Affairs Committee report says that the deal that was struck in 1991 was a poor one. One of the reasons why was that it could not easily be changed. That, as much as anything else, is the real reason why we are in the situation we are in today.

[David T. C. Davies]

The right hon. Gentleman has far more knowledge of what happened in 1991 than I do. However, if we had asked for a more advantageous and flexible Bill from our point of view, I presume that SRC would have asked for more than £1 billion. I was not party to the negotiations, but I imagine that it would not have simply rolled over and given way that easily—I do not know. What I know is that it is all up for grabs after 2017 or thereabouts. It is important, first of all, that we have hard evidence about the impact on the local area.

The hon. Member for Swansea East—

[Geraint Davies]

West. We have not had the boundary changed yet.

[David T. C. Davies]

I apologise. The hon. Member for Swansea West (Geraint Davies) made a point about the potential level of the toll after 2017. I think that he will agree that it was a back-of-the-envelope calculation, and I am sure that it can be corrected. I shall address the figures to which he has alluded. The current annual revenue from all the tolls is about £76 million a year. The current cost of maintaining the bridge is £15 million. I estimate, therefore—this is purely a back-of-the-envelope calculation—that it would be feasible to levy the toll at about £1.50 and still be able to maintain both bridges. Obviously, there may be other factors that the Welsh Affairs Committee has not been made aware of.

[The Parliamentary Under-Secretary of State for Transport (Mike Penning)]

Will my hon. Friend give way?

[David T. C. Davies]

I suspect that the Minister is going to make me aware of a few of those factors. I accept that we may want to put money aside for a future bridge or for future major works to be carried out on one of the bridges. I invite the Minister to confirm, however, that it would be possible to set the toll at a significantly lower level than its current one and still be able to maintain both bridges in good working order.

[Mike Penning]

I do not want to pre-empt in anyway my later comments, but my hon. Friend may notice that I am not a Treasury Minister. Treasury Ministers do not do things on the back of a fag packet. Whatever we do must be evidence based and correctly calculated all the way through. We are not going to rule anything out or anything in. It will be very much a Treasury matter, as well as one for the Department for Transport.

[David T. C. Davies]

I appreciate that clarification. However, we are about five or six years away at most from the estimated date of handover. By that time, I would expect people in the Minister’s Department or the Treasury to be thinking about what we will do next. I understand that the current plan for the next five years after 2017 is that the tolls will continue at the current level in real terms and that the money will be set aside for a sinking fund.

To date, no one has even talked to SRC about who is going to man the toll booths or do the maintenance. It surprises us that more work has not taken place and that there is not greater clarity about what is going to happen. Certainly, at some point, the bridge will be in public ownership, both bridges will be paid for and a large profit will be being made by someone. However, it is not being made at the moment and, in fact, the evidence suggests that SRC will not make that big a profit. SRC’s shareholders are not a load of people in top hats somewhere in the City of London; they are anyone who happens to have a private sector pension. We often forget that when we talk disparagingly about shareholders.

At some point in the next 10 years, a large sum of money will be being made from what is basically a tax on the people of south Wales and the west country of England, which is not acceptable. We have a right to know what is going to happen and to absolute transparency, so that when the bridge becomes the Government’s property, we can open the books and see how much is being used to maintain both bridges and how much is simply going back into Government coffers. We could then put aside some money for future works.

I want to squash a couple of myths that are prevalent in the pubs of Monmouthshire and possibly elsewhere. The first myth is that the whole thing is owned by the French Government and that the money will all go back to France. I do not know where that came from, but it is obviously completely incorrect. The second myth that has persistently dogged us over the past few years in Monmouthshire is that the old Severn crossing is falling down and at some point will be closed. We have found absolutely no evidence for that either, and we are assured that that is not the case.

We look forward to finding out a little more about what will happen on the happy day when the bridge goes back into public ownership and ceases to be paid for. We also look forward to a day when the tolls can perhaps be set at a level that is fair, that enables the taxpayer not to lose out because the bridges will be maintained and that is beneficial to all of us who live and work in south Wales.

--- Later in debate ---

[Jessica Morden]

I thank my hon. Friend for his intervention. There is no permanent solution to that at the moment. I travelled over the bridge last Thursday night, and although I believe that a temporary measure is in place, there is still no permanent fixture. I am sure the Minister will correct me later if I am wrong on that. I will move on to that issue later.

The Committee heard anecdotal evidence about the economic impact of the tolls on businesses and commuters, and it welcomed the Welsh Assembly’s commissioning an assessment of the economic impact of the bridge’s operation. The Government response refers to new business investment in Wales. I want to add my own anecdotal evidence. Haulage companies in my constituency, and I suspect in the constituency of my hon. Friend the Member for Blaenau Gwent (Nick Smith), are being severely impacted by the tolls, as the charge is not borne by companies just over the bridge. For example, Owens Road Services is a long-standing Welsh company with a base in Newport. It represents 1% of the total heavy goods vehicle traffic on the crossing and pays £200,000 a year. Toll increases keep coming off its bottom line. The Welsh logistics industry is paying a charge that is not paid by competitors in England. I speak weekly to commuters—for example, teachers—who travel to Bristol. They are suffering every day at a time when hours are being cut, wages frozen and fuel prices are high.

As the hon. Member for Monmouth has said, what came out loud and clear from the Committee’s inquiry is that the contract negotiated with Severn River Crossing is very restrictive and that the Secretary of State’s powers are constrained by that. However, where there’s a will, there’s a way. I still want the Government to pursue the issue of a toll freeze. I took the Minister at his word when he said it is difficult, although as we referred to earlier, there are people in his party who see the matter slightly differently.

On 6 April, which was just a few weeks after the Minister gave evidence to us, during the Assembly elections, the Welsh Conservatives pledged that

“a Conservative Assembly Government will freeze Severn Bridge Tolls cars at their current level. The freeze will be brought in immediately.”

As an aside, there was no mention of business vehicles, which has not gone down particularly well. I am genuinely bemused by that. Has the Minister committed to doing that or do the Welsh Conservatives just not know that the bridges are not devolved and that there are contract limitations? I would be grateful for an answer on that later.

[David T. C. Davies]

Presumably, if the hon. Lady and I were fortunate enough to win the lottery, we could ask Jim Clune if we could pay for everyone to have a toll freeze. Although the matter is not devolved, there would have been nothing to stop the Welsh Conservatives doing that had they formed a Government. Sadly, they did not, but maybe next time.

[Jessica Morden]

I thank the hon. Gentleman for his intervention. Apparently the Assembly would have had to pay £29 million to Severn River Crossing. I am loth to take him up on his offer to commit to paying that if we win the lottery, just in case.

I would like the tolls to be frozen and greatly reduced when the bridges come back into public ownership in 2017. I fully support the Committee’s assertion that the toll could be reduced to a fifth of its current level to approximately £1.50, while allowing the crossings to remain self-financing. We recommend that the Government should seek to reduce the level of the toll at the earliest opportunity.

In the meantime, I want the Minister to address some of my parochial concerns. On car sharing, commuters who share a car cannot share the TAG. I was under the impression that that issue had been sorted out some years ago and dealt with by Severn River Crossing. However, it appears that it has not. Will the Minister please pursue that with the company in the interests of cutting congestion? We are urging people to car share, so we ought to be making it easier.

On off-peak tariffs for business, one issue that businesses have always raised with me, which is an extremely good point, is more flexible pricing. Effectively, off-peak travel for business would offer incentives to travel at certain times of the day and night. That would reduce congestion, save emissions and help companies at a time when they are struggling.

May I also ask the Government at some stage to examine the issue of a reduction in tolls for people who live locally? As someone said earlier, maybe that could be done on a postcode basis. Such a scheme has been introduced on the Dartford crossing. I believe that it is easier to do that on the Humber and Dartford crossings, as they have no concession. I am sure that the Minister will put me right on that if I am wrong, but in the longer term, could we look at doing that in Wales?

On the thorny issue of modern technology, I believe that one of the witnesses, who gave evidence to the Committee referred to not being able to pay by modern methods as a “mild national embarrassment”. That the issue was shown on “Gavin & Stacey” has been well-reported. I am glad that the temporary system is in place, although I believe that the permanent machines have not been installed yet. The company pledged to the Committee to do that within the first quarter of this year, so I would be most grateful for an update on progress.

Given the long, painful years it has taken to get to the stage of being able to pay by credit and debit cards, which appeared to be a fairly simply issue, may I urge the Minister to get to grips with the future of the bridge post-2017, as the hon. Member for Monmouth has mentioned? The Government response to the Committee’s report states:

“it is too early to be setting a future strategy for the Severn Crossings at this stage, including future toll prices and concessions.”

With the current Parliament due to expire in 2015, this is not an issue that can be left until another election, because businesses and commuters in my constituency need certainty.

I welcome the Department’s commitment in the Government response to provide regular updates to everybody on future strategy. I also thank members of the Committee, as one of the local MPs, for the time that they have spent on this issue. It has been a valuable exercise in providing fresh impetus to sorting out the future of the bridges.

--- Later in debate ---

[David T. C. Davies]

I am grateful to the Minister, a fellow holder of an HGV licence, for giving me another 15 minutes to speak. As some of us wish to make fact-finding visits to the Severn bridge later today, I shall not use it all.

A bridge with a toll is better than no bridge. That is accepted. A bridge with a cashless payment system would be better still, and not one that takes only credit cards; the sort pioneered by companies such as Ringo—I have no connection with the company, but it gave evidence to the Committee—would be better still. A bridge with a reduced toll after 2017 would be excellent, and we look forward to improvements.

The Gwent national party, led by the right hon. Member for Torfaen (Paul Murphy), and I see eye to eye on many things, and we would have no difficulty in finding agreement on the Severn bridge, on the importance of the Union and on the importance of the first-past-the-post voting system—and, I suspect, on whether we hand further powers to the Welsh Assembly. That, however, is an argument for another day. We look forward to improvements after 2017.

Question put and agreed to.

Intercity Express and Rail Electrification

David T C Davies Excerpts

Tuesday 1st March 2011 Commons Chamber

[Mr Hammond]

If the hon. Lady is talking about the wider package, I can tell her that there are obviously many components to it. Jobs will be created through the electrification process over a number of years as Network Rail gears up to deliver that programme, and others will be created at Newton Aycliffe for the IEP. Further jobs—thousands of jobs—will be created in the UK supply chain that will support that major investment which, incidentally, is not just about delivering the UK IEP, but about Hitachi’s manufacturing and development base for its involvement in European rail in future.

In addition, of course, there will be huge benefits in the south Wales area from the electrification of the valleys lines—what economists like to call agglomeration benefits, meaning the reinforcement of the economy that happens when connectivity is improved and labour markets are deepened. Those will allow people in towns up the valleys lines, some of which, frankly, are among the most deprived in Wales, more readily to access the markets and economy of Cardiff, which is a powerhouse for the area. That will bring significantly increasing prosperity and wider opportunities for people who live in the Cardiff hinterland.

[David T. C. Davies (Monmouth) (Con)]

Had the Secretary of State announced that he was electrifying and putting a high-speed train on every branch line in Wales, Opposition Members would still object. Will he instead accept the congratulations of all those who are worried that some want Wales to become more separate? His statement is a tangible way of putting Wales at the heart of the UK. Dewi Sant will be looking down today with a glass not half full, but almost overflowing.