Severn Bridges

Jessica Morden Excerpts

Tuesday 31st January 2017 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

I beg to move,

That this House has considered future operation of the Severn Bridges.

It is a great pleasure to serve under your chairmanship, Mr Davies. I welcome the select band of hon. Friends who are here today, while other business is on in the main Chamber.

On 13 January the Government announced their consultation on the future management of the Severn bridges. We were promised it in the autumn, with the Government saying it would be about a year to go until the handover, but better late than never. I have called this debate in part to recognise that the Government have moved some way towards recognising how hard hit we in south Wales have been by the level of tolls, although they have not gone far enough—I will move on to that later—but also, crucially, to get more clarity from the Minister on what the Government are planning when, at long last, the Severn bridges concession ends. We need that clarity because there is not long to go now; Severn River Crossing could reach its revenue target in October this year and the Government consultation ends on 10 March. Now that the concession is drawing to a close, this is the first opportunity that Members have had in 25 years to shape the new regime for the benefit of our constituents and businesses.

[Nick Thomas-Symonds (Torfaen) (Lab)]

Does my hon. Friend agree that this is the moment to have a strategic plan? Action on the inequity of the tolls is long overdue, but we also need to look at the future of the jobs for those who work in the toll booths and at the general management of traffic, bearing in mind the proximity of the Brynglas tunnels. There has to be a strategic approach.

[Jessica Morden]

My hon. Friend is absolutely right. This is a critical stage to get this right for the future. Given the inflexibility of the 1992 legislation, it is important that we scrutinise the plans now and future-proof them so that we will not need to unpick things in years to come, for example because we had not thought about vehicle categories. That is a very important point. We must be able to shape the new regime for the benefit of our constituents and businesses. I agree that we will want to get that right.

[Mr Mark Williams (Ceredigion) (LD)]

I congratulate the hon. Lady on securing this debate again; she has had many debates on the topic and I have made the same observation, but I want to say it again. Does she agree that the need to get this right for the business community extends way beyond south Wales to the west of Wales, mid-Wales and the north as well? It is critical that we get this right for businesses right across the country.

[Jessica Morden]

The hon. Gentleman is absolutely right; this issue has ramifications for the whole economy of Wales, in south Wales and beyond, including his constituency. I thank him for being here today and for making that point.

Getting more clarity about the direction of travel is important for my constituents who commute, the businesses that do business across the bridges and those who work on the bridges. In recent years those people have had to suffer the highest toll in the UK, and commuters have just had to absorb the annual increases, however unfair they are. Constituents have had to turn down job offers because the toll is equivalent to nearly an hour on the minimum wage. Just this morning I received an email from a constituent, who said:

“The tolls add a considerable amount to the cost of travel to Bristol, where a lot of attractive jobs for young graduates like myself exist. Many of my friends who have graduated from university recently and are looking for a job fail to look at Bristol because in my opinion, the toll gives…the impression that Bristol is out of reach, even though in actual fact, travel time is not much more than to Cardiff.”

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

I pay tribute to my hon. Friend for securing this debate and for the campaigning she has done on the issue, along with so many of us. She is absolutely right to mention Bristol. I have heard again and again from businesses and individuals in my constituency who trade across the Severnside area, particularly in the creative industries. We have people working in the BBC drama village in Cardiff Bay and the BBC natural history unit in Bristol. Does my hon. Friend agree that sorting out the tolls is absolutely crucial to growing and strengthening that creative economy?

[Jessica Morden]

My hon. Friend is right. House prices in Bristol mean that more and more people are choosing to live in Severnside, Monmouthshire and Newport and to commute. Our local economy is interlinked with Cardiff, but also with Bristol. It is incredibly important that we do all we can to support that growth.

[Nick Smith (Blaenau Gwent) (Lab)]

I congratulate my hon. Friend on securing this debate and making a powerful argument for reducing the tolls across the Severn to Bristol. Does she agree that we must also improve train services between east Wales, Bristol and the west country? That would also help jobs in our area.

[Jessica Morden]

I thank my hon. Friend. He anticipates a point that I was going to make later in my speech about cross-border travel and the capacity of our rail services for those who commute to Bristol and beyond, which is clearly inadequate. When we are looking at tolls, we need to consider the wider picture and take a more holistic view of our transport networks.

Businesses, especially those in logistics and the provision of services, are trying to compete with firms in the south-west that do not have to factor in the toll, and they are losing out. Some businesses in my constituency are hit by up to half a million pounds a year, which just has to come off the bottom line. At present there are no effective discounts or incentives for off-peak travel. The arguments have been well rehearsed over many years, but it is worth reiterating just how hard people have been hit and therefore how strongly they feel about the issue.

The Severn crossings are a key link in our transport and economic infrastructure as part of the M4 corridor—the gateway to Wales—which allows access to markets in the UK, but also as part of the E30 route. As has been said many times before, the Severn tolls have been a tax on Welsh business and commuters. I recognise that the Government have gone some way towards acknowledging that. They announced in January that tolls could be reduced to £3 for cars and vans and £10 for lorries when the concession ends, but the message from many of my constituents and businesses is that the Government are not going far enough.

I want to thank the many constituents, businesses and groups, such as the Freight Transport Association, that have worked with me, other hon. Members and the Welsh Affairs Committee over the years on this campaign. I also thank the Under-Secretary of State for Transport, the hon. Member for Harrogate and Knaresborough (Andrew Jones), who attended the Severn bridges summit that I organised with the FTA here last year, so that the people affected could put their views to him directly.

As my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) mentioned, we should also pay tribute to the maintenance and toll staff, who are incredibly hard-working and knowledgeable about the Severn bridges. I hope that the Minister will ensure that they have a key voice in future decisions, because they have the expertise that we need and that we must keep. I urge him to ensure that there are regular meetings with management and staff so that they are fully informed of announcements and discussions. We should acknowledge that it is a sensitive time.

On tolling, the Government have announced that they will seek to reduce the tolls and that they will use the toll revenue for operations, maintenance and debt repayment. The Minister will be aware that there is a strong consensus in the Welsh Assembly, the Welsh Government and among many users of the bridges that the tolls should be scrapped altogether, not least because removing them would boost productivity in Wales by up to £100 million, as a recent Welsh Government study has shown. Tolls represent an unfair tax. In an ideal world the UK Government would pay for the maintenance, not the people and businesses of Wales, particularly after such a lengthy period with such eye-watering tolls.

Scrapping the tolls would be a symbolic move, especially with the uncertainty around Brexit. It would be helpful to hear from the Government why they have not included that option in the consultation. I am sure that many people would like to back it. I hope that the consultation is a true one, not just a paper exercise, and that the Government have an open mind on it.

[Mr Mark Williams]

The hon. Lady touches on a point of principle there. The people of Wales pay taxes the same as everyone else. That money goes towards road repairs right across the country, so why should the people of Wales in effect pay twice?

[Jessica Morden]

The hon. Gentleman makes an important point, which I will come to later when I talk about the debt that the Government say they have to recoup. That is interesting, given the money they have recouped in the past from other sources.

The Minister will say that halving the tolls will allow an assessment of the impact on traffic. The traffic using the bridges has increased and, as recent media coverage shows, many people are choosing to relocate from Bristol and the south-west to Newport and Monmouthshire as a lifestyle choice—a very good choice, as it is an absolutely wonderful place to live. In response, the UK and Welsh Governments need to work on a holistic transport plan that includes the metro, and the Government must help to make up the shortfall from the loss of EU funds. While I am being parochial, the Government should support a new station bid for Magor and provide greater rail capacity, especially on the commuter services from Newport and the Severn tunnel junction, which have been dubbed the “sardine express”—I have had debates on that in the past—and the Welsh Government should look at the matters that are devolved.

[Stephen Doughty]

My hon. Friend is being very generous in giving way. I agree with her point about rail. I and others have been campaigning for a new station at St Mellons Parkway—I hope the Minister will be listening closely, because the decision is going to be taken—and for funding for the south Wales metro. Does she agree that the tolls are not only a tax but a time penalty for Welsh residents, because unlike the Dartford crossing and the M6 toll, which have much faster technology—Dartford has got free flow—we do not have free flow or the faster toll technology on the bridge?

[Jessica Morden]

I absolutely agree, and I will come to the issue of free flow later. The fastest transaction at the moment is the TAG, which takes six seconds, but there is further scope for helping with congestion.

Will the Minister tell us where the figure quoted in the public consultation of a 17% traffic increase over 10 years has come from? How much of that will be in the first year? In fact, it would be particularly helpful if he could publish all the research that the Government have commissioned on traffic modelling in relation to the end of the concessions and the traffic flows. I know that all hon. Members would be grateful for that.

If, as the consultation indicates, the Government decide to continue tolling, the toll level should not exceed the cost of operating the two bridges. Severn River Crossing collects about £90 million-plus each year, and that is going up. Maintenance and operation costs are between £13 million and £15 million. Based on a rough, back-of-the-envelope calculation, that requires a toll of about £1, which means the Government will still be charging three times more for cars and 10 times more for lorries. The Government argue that they will have to recoup a £60 million debt for fixing defects but, as the Welsh Affairs Committee has documented, they have done very well out of the bridges so far: the Treasury has received £154 million-plus since 2003 in unexpected VAT—more than enough to cover the debt and undertake the resurfacing work, which the Government value at £12 million, with a lot left over.

On the point made by the hon. Member for Ceredigion (Mr Williams), why do we have to pay for resurfacing on this stretch of road out of bridge tolls, when for any other stretch of road the cost is taken out of general taxation?

[Chris Elmore (Ogmore) (Lab/Co-op)]

I congratulate my hon. Friend on securing this debate. On that point, if one of the many other bridges in the UK failed—God forbid—it would be repaired by the Department for Transport. Does she agree that the Government should be responsible for repairing both Severn bridges?

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[Jessica Morden]

I agree with my hon. Friend—I agree with everyone. That is clearly something the Government should take on board. Given that they have absorbed the VAT charges into the general Treasury coffers, surely we should be dipping into the Treasury’s coffers to pay for the resurfacing work.

The Government have recouped a substantial pot of money. We should not forget that they wiped £150 million of debt from the Humber bridge. Wales deserves the same. Has the Minister estimated the date by which the outstanding Government debt will be paid off? I understand that, under their current plans, it could take 18 months. Is their intention to reduce tolls at that point to reflect that?

Will the Minister tell us how the Government calculated the £3 figure? There is no rationale for how it was reached, and it would be really helpful to have a breakdown to know how the tolls will be spent. Will the Minister confirm what ongoing method will be used to calculate the tolls in future? The consultation does not make that clear, and we need to know how the Department for Transport will assess the tolls annually, because we have suffered years of annual increases.

It is also crucial that we know from the Government when the new tolling regime will come into force. We are currently no clearer about the expected timing of the handover of the crossings. It is anticipated that the revenue target will be met in October, and that the actual transfer of services will occur at some stage after that. What is the current plan? It is important that we get clarity about the handover period and know when the bridges are formally to be run by the Department for Transport. If there is a gap, and VAT comes off the bridges but the tolls remain at the current level, there will potentially be a period when businesses that claim back their VAT will, in effect, have to pay more. Have the Government given any thought to that?

The Department for Transport said that it is a year to go until handover. When does it expect that date to be? Does that mean, for instance, that if the formal handover has not taken place by January 2018, we will have to endure yet another retail prices index increase next year?

The mention of free flow is welcome, but many will be disappointed that it may not be seen for some years. As my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) said, the main benefit is the reduction in journey times and congestion. Although free flow is clearly a future consideration, I ask for two things: first, that under free flow the tolls will not go up for a return journey; and secondly, that all back-office functions for dealing with evasion and administration should be sited locally. It would be an advantage for free flow if those who carry out the back-office functions know the local area and the local issues. Will the Minister give us some clarity about the Government’s current estimate of the costs of free flow?

Free flow will be looked at in future, but what thought has been given to improving the TAG? It is the fastest current form of payment—it takes about six seconds—but it is important to improve it if we are to tackle congestion. Severn River Crossing has made strenuous efforts to promote the TAG, and nearly 30% of users now use that method of payment, but only an improved season TAG discount and a first-time trip TAG discount beyond a halving of the toll will materially affect TAG take-up. With that in mind, will the Government consider a more ambitious future for the TAG to speed up traffic in the short term?

I am pleased that the long-awaited consultation has been published. I will certainly encourage all those with an interest to contribute their thoughts to it.

[Glyn Davies (Montgomeryshire) (Con)]

Probably every Welsh MP has some sympathy with the points that the hon. Lady is making—not necessarily with all of them, but certainly with some. As she is drawing to the end of her speech, may I ask her about a point of principle? Is she against the whole idea of using a tolling mechanism for constructing new bridges and roadworks? Is the Opposition’s view that there should not be tolls and that we should always fund new road improvements from the Exchequer?

[Jessica Morden]

I think that, after many years of pretty eye-watering tolls on this bridge, it is time we looked for a much fairer regime for people who live in south-east Wales. The tolls have hit my constituents and businesses especially hard. As I have said, there is a strong call, supported by the Welsh Assembly and the Welsh Government, to scrap the tolls altogether, and I have huge sympathy with that. If this Government are not willing to go that far, as indicated in the consultation, we should surely have a £1 maintenance-only toll.

[Nick Smith]

It seems to me that we need some transparency from the Government about the finances, because at the moment they seem very opaque. We have got to find out what is happening with the treatment of VAT, with the future debt costs, and with the resurfacing and maintenance costs. We need the Government to be absolutely clear about what the costs are so that the public can take a view about whether it provides value for money.

[Jessica Morden]

My hon. Friend is completely right. More clarity would be most welcome so that, when statutory instruments are introduced on the matter, we are far clearer about what the effects will be. The consultation contains more detail about the options that are not being considered than about those that are on the table. It says that Highways England will have the responsibility in future, but will it contract out any elements of the operation or maintenance of the bridges? What maintenance charges, other than for the resurfacing, do the Department for Transport anticipate for the bridges in the first 18 months?

The consultation mentions the option of removing tolls between 10 pm and 6 am—off-peak travel—but does not seek views. Will the Government speak to businesses and others to gauge their views? Business representatives I met in my constituency on Friday said they thought it would be extremely attractive to companies based in south Wales, particularly in the logistics industry, so more work should be done to pursue that option.

To conclude, the Severn Bridges Act was written almost 30 years ago. As we have said many times, it was an inflexible piece of legislation that was not future-proofed. I have one plea for the Minister: whatever legislation we have to pass—the consultation made mention of statutory instruments—we as local Members should be consulted properly. We and our constituents need to be able to take part, because in the months to come we will have many more detailed questions, although I hope that the Minister can answer some today. I appreciate other hon. Members supporting the debate and I look forward to their contributions.

[Geraint Davies (in the Chair)]

Moving from Newport East to Newport West, I call Mr Paul Flynn.

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[Glyn Davies]

rose—

[Jessica Morden]

rose—

[Paul Flynn]

rose—

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[Mr Hayes]

That was the point that I was making—less concisely and persuasively than my hon. Friend. As I said, the debate is perennial; we have such a debate about nearly every kind of fee or charge, for every public service. I suspect that the answer—and I hate to sound tediously consensual—is that a balance has to be struck.

[Jessica Morden]

Tolling at £3, in part, to pay back the £63 million cost to the Government of the latent defects on some of the bridges, when the Government have in fact recouped more than double that in an unexpected tax windfall, seems especially unfair—particularly when the Government stepped in and wiped £150 million off the Humber debt. Does the Minister appreciate how strongly people feel about that?

[Mr Hayes]

The reason I said I wanted to break down the costs is that, as the hon. Lady will understand, as well as a capital cost to be recouped in the form of a debt, maintenance costs are associated with any crossing of this kind. She will be familiar with the details of the Severn Bridges Act 1992, which makes it clear that those costs can be included in any tolling system through to 2027. The operational, maintenance and servicing costs are real, and are borne by those who pay for the crossing through tax and tolls. As I have described, a balance has to be struck, and that is why the Government are engaged in consultation in response to calls from the hon. Lady, among others.

Having been slightly unkind to the hon. Member for Newport West, I will mention that he has longer and more profound experience in this context even than that of the hon. Member for Newport East—certainly than mine; I pay tribute to the fact that both hon. Members have been consistent in advocating their constituents’ interests in making their case about the crossing. I hope that they, in similar good faith, will recognise that I will do my best to bring about a reasonable and fair outcome to the consultation, which will guarantee the interests of all concerned into the future.

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[Jessica Morden]

The Minister just referred to the handover in January 2018. Can he be specific about the date? The consultation ends on 10 March. Presumably in October a car will drive through the Severn bridge toll plaza and the revenue target will be hit; what happens then? Potentially, with a handover period, businesses that can now reclaim VAT might be unable to do so. If the handover is not until January 2018 will there be an increase then, as there has been every year?

[Mr Hayes]

The hon. Lady is right to say that we need to set out the process, and that responsibility will pass to Highways England. The fourth of my five points is that it is important to be clear about how Highways England will manage the process. She asked particularly whether others will be involved and Highways England will contract the responsibility. That will of course partly depend on the results of the consultation. If we move to a free-flow system, like the one at the Dartford crossing, it will have implications for organisation and management. Fewer people will be involved at the crossing and more behind the scenes, and there will be advance booking as happens at Dartford, with an account-based system that will hopefully help traffic flow. That will require us to set out, following the consultation, the further steps necessary for the handover. I am happy to do that, but I do not want to pre-judge the consultation.

There are arguments for maintaining cash payment; I will be blunt about that. When we debated Dartford, the first time I was in the Department for Transport, we considered that closely because a cash system is simple and straightforward; but there are disadvantages—particularly the delays. Evidence from places in this country and abroad shows that automated systems can be highly effective, can be properly managed, and can offer considerable benefits, particularly to regular and business users. We will set out the transition process and it will to some degree depend on what we do about future toll collection.

The fifth point that I want to make is to express thanks to those involved over time in managing and maintaining the crossing. It is right that in any changes that take place we recognise the contribution that people have made to running this important crossing, which is a vital piece of UK infrastructure. It has benefited road users from England and Wales for 50 years, it is used by more than 25 million vehicles each year and it has provided road users and businesses in England and Wales with exceptional savings in time and money since the first crossing helped to connect the economies of both countries in 1966.

I enjoyed the story about the ferry, although I am not sure I was meant to enjoy it. It sounded like a hazardous—indeed tortuous—business, and I imagine that those who can look back on that will recognise just what a difference the crossing has made. As we now consider the next steps, it is important that we take account of the effects they might have on all of those involved in the process, and I wanted to do so publicly.

Let me summarise my response. I repeat that we have no preordained view about how this matter should unfold. It is important that these debates inform thinking, and they certainly do in my case. There is a strong argument for making as much information available as possible to Members of this House and more widely along the lines requested throughout the debate across the Chamber, and we will do so.

If the debate does no more than all of that, it will have achieved a great deal, because it has persuaded this Minister—if he needed persuading—not only of the importance of the matter but that we need to move ahead with as wide agreement as possible about the kind of tolls charged, the effect they have on people, the methodology that we employ and the steps we will take to manage that process. All of that will happen, and the hon. Member for Newport East can be proud of yet again representing her constituents and others so admirably.

As a postscript, the hon. Lady and the hon. Member for Newport West can be pretty sure that my references to the pre-written script were as slight as the hon. Gentleman had hoped.

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[Jessica Morden]

Thank you for ably chairing the debate, Mr Davies. My thanks to all hon. Friends who took part and in particular my hon. Friend and neighbour the Member for Newport West (Paul Flynn). May I thank the Minister for his response and in particular the points about the staff who work on the Severn bridges, whom I mentioned?

I thank my hon. Friend for pointing out forcibly that we do not feel that the Government are being generous in their offer. For years, excessive tolls have been charged to people making essential journeys and we feel strongly that it is time to right that wrong. I worked out that this is about the 87th time I have spoken about the Severn bridges in my time here in questions and at other times. As the concession is nearing its end, the impression is that the Government have been dragging their feet. For instance, we expected the public consultation last autumn and it has taken its time.

[Mr Hayes]

I am sorry to interrupt the hon. Lady. I have spoken already, but I omitted to pay tribute to the Under-Secretary of State for Transport, my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones). Were it not for him and his role in this matter—I mention him because he answered the debate last time round—I do not think we would have moved as quickly as we have. He has been determined to ensure that we responded properly to the hon. Lady’s concerns. It is not I but he who deserves the credit for any progress that has been made.

[Geraint Davies (in the Chair)]

That sets a precedent—an intervention on a wind-up.

[Jessica Morden]

I appreciate the Minister’s intervention. I thank him for his comments, but I am not sure whether we are that much clearer about the breakdown of the £3 toll. I will hold him to his promise to break that down for us in more detail.

I am also not sure whether we are that much closer to understanding the handover plan. The Department for Transport clearly cannot take over the bridges the minute the last car pays up and the revenue target is reached, so it would be useful to know about that, not least because I would not want constituents to face another annual increase in January 2018. I would also like more detail from the Minister on what can be done about the TAG reduction.

I hope that this time we end up with a lasting solution that means we can future-proof the legislation. Will the Minister respond in writing to anything else we have raised in the debate? That would be particularly helpful. As in all our efforts in talking about the Severn bridge tolls, we do so for our constituents, our businesses and the wider economy of south Wales, which have been hit hard by the tolls over the years.

Question put and agreed to.

Resolved,

That this House has considered future operation of the Severn Bridges.