Severn Bridges (Tolling)

Mark Harper Excerpts

Wednesday 5th March 2014 Westminster Hall

[Mr Mark Harper (Forest of Dean) (Con)]

It is a great pleasure to serve under your chairmanship, Mr Bone, and I am grateful to the hon. Member for Newport East (Jessica Morden) for securing the debate.

Anyone following this debate might wonder why I, as an English Member of Parliament, am here. It is worth reminding the House that the old Severn bridge is entirely in England—indeed, my constituency stretches halfway across the bridge and the constituency of the hon. Member for Thornbury and Yate (Steve Webb) stretches the other way. The new, second Severn crossing is of course half in England. My first plea to the Minister is for him to be clear that, because three quarters of the bridges are located in England, they must remain under the control of the United Kingdom Government so that the interests of both English and Welsh residents can be taken into account and balanced properly.

I know that the hon. Lady did not do so, but many in Wales have advocated that the bridges should be under the control of the Welsh Assembly Government. Given the fact that they are in England, and that my constituents are as affected as the hon. Lady’s, it would be wholly wrong for the bridges to be under the control of a Government over whom my constituents have no democratic influence. I make that plea strongly and hope that the Minister can confirm that that is the case.

Perhaps the shadow Minister could also confirm that that is the Labour party’s policy? I am guessing that it is, on the basis that when it was in power for 13 years it left the bridges under the control of the UK Government’s Department for Transport, but it would be helpful to know whether the UK Labour party’s position is the same as that of the Welsh Labour party. The latter wants to take control of the toll revenue. The First Minister has said that one option should be that the Welsh Government should take full control and play

“a central role in determining future arrangements and in accessing and utilising any future revenue streams for the benefit of the people of Wales.”

As I say, that would be quite wrong. The bridges are three quarters in England and any changes will affect English residents just as much as Welsh. The control and decision making about any future tolling regime, or lack thereof, should be taken by the UK Government.

I agree with the hon. Lady that our constituents, and businesses in our constituencies, would rather there were no tolls. I have had conversations with my constituents and said that in an ideal world it would be lovely to have had estuarial crossings financed wholly out of general taxation with no toll. However, I know the world and the realities of paying for things. I know that the previous Government were not great at balancing the books, but it is better to have the estuarial crossings with a toll than to have no toll but no crossings. Of course, all previous Governments decided that tolling was the way we paid for significant estuarial crossings.

I know that when the bridges return to the control of the United Kingdom Government in 2018—I agree with the hon. Lady that it would be helpful if the Minister could confirm what the latest expectation of the date is—some decisions will need to be made. I would like the Minister to think about a range of things. First, I agree with the hon. Lady that it would helpful to know whether the Government will stop levying VAT once the bridges revert to public ownership, which would mean £1 off the price of the toll.

Secondly, decisions have to be made about the future maintenance of both the second Severn crossing and the old Severn bridge that has the M48 running across it. The old bridge has significant maintenance costs. I think the hon. Lady alluded to—the Minister will be able to confirm this—the costs of maintaining corrosion resistance on the cabling on that bridge, which are significant. However, it is important to keep that bridge functioning and benefiting, particularly, my constituency, which benefits most from that bridge as opposed to the second Severn crossing. I am sure that the Minister will be able to say a little more about that when he responds to the hon. Lady’s question.

Thirdly—this is relevant to the question of future tolling on the Severn crossings—the Highways Agency and the Government will have to think about whether there should be future crossings of the River Severn. In my constituency, as one goes up from the existing tolled crossings, there is a crossing at the Over bridge, after the junction between the A40 and A48. That bridge is a significant traffic bottleneck, causing severe tailbacks to my constituents—both commuters going to and from work and businesses in the area. Some short-term solutions have been proposed for the end of this year and for 2015, but the only long-term solution is a future crossing somewhere south of that bridge and north of the existing tolled crossings.

[Neil Carmichael (Stroud) (Con)]

I have set up a commission focusing on economic growth on my side of the Severn. One of the options we should consider is a new bridge. Does my hon. Friend agree that any decisions about tolling in the future should take into account the need for a new bridge somewhere along the Severn?

[Mr Harper]

I agree, for this reason—I will be clear to the Minister—in an ideal world, I would like another crossing over the Severn. I would prefer that to be paid for out of general taxation and not require either tolling on that crossing or continued tolling on the existing crossings. However, I do not want the Minister to rule out, at this stage, considering whether at least some of the future tolling revenue should be used to fund a third crossing. I think the hon. Member for Newport East was tempting him to rule that out; she was tempting him to look forward something like four to four and a half years, to make some decisions about a future tolling regime on the crossings today and then to announce them to the House.

If I am given the choice of a crossing, I will take the crossing. However, if I am told that I cannot have a crossing for 20 years because it is unaffordable, but I could have one in a year or two if we were able to use some toll revenue, that is a debate I want to have with my constituents. I want to see whether that would be a good trade-off that my constituents might want to undertake—whether it can be balanced with the benefits to businesses, jobs, economic activity and relieving congestion. I at least want the Minister not to rule that out.

I have written to the Highways Agency, asking it to look at some options for further crossings and to set out the future useful life of the second Severn crossing and the old Severn bridge, to see how long they are likely to last.

[Paul Flynn]

Is the hon. Gentleman suggesting that the money from tolls on the bridge that he is suggesting should be tied in with the Severn bridges as they are now, which would guarantee tolls in perpetuity, but provide little service for the people of south Wales?

[Mr Harper]

All I am suggesting at this stage is that the Minister does not rule out considering that in the future. Of course, the tolls would not be in perpetuity, but I do not want to rule them out. The hon. Gentleman needs to reflect on the fact that the bridges do not affect just Wales. The bridges are three quarters in England; as I said, the old Severn bridge is wholly located in England, and it affects my constituents in England just as much as it affects his constituents in Wales. It is important for the House to remember that the debate about the Severn crossings and the tolling regime is not just a Welsh issue, but an English one too; and that it does not affect just south Wales, but, as the hon. Member for Ceredigion (Mr Williams) mentioned, the rest of Wales. This is a wider question, and we need to look at the economic impact on Wales and on England—in Newport West, Newport East and my constituency—and make a balanced judgment.

I was clear in my remarks: I would prefer another crossing over the River Severn that does not have tolling and that does not require tolling on existing crossings. However, I am realistic enough to know that, given the state of the public finances, caused largely by the Government whom the hon. Member for Newport West (Paul Flynn) supported, difficult decisions have to be made. There is a debate to be had about whether we can have the infrastructure sooner by funding some of it from tolling. That debate is worth having, and I want to put it on the table. I am asking the Minister not to make decisions today for a position four and a half years in the future and rule things out that we may have cause to regret. That is all I am asking him to do. I have asked the Highways Agency to undertake some option appraisals, so that we can have a sensible and balanced debate in the future.

[Jessica Morden]

It will come as no surprise to the hon. Gentleman that my priority is for the tolls to come down for my constituents and businesses post-2018, when the concession ends. However, does he think that the current level of tolling is acceptable?

[Mr Harper]

The debate I always have with my constituents is simply to remind them that both Severn crossings had to be constructed and paid for, and that the toll revenue simply repays the cost of providing and operating the crossings. There is a trade-off: if we did not increase the toll each year—of course I understand why that is unpopular; I would prefer it not to go up as well—we would extend the concession period. That is a trade-off the Government have to make. The option would be open to the Government, as it was—I remind the hon. Lady—to the previous Government, whom she supported. For 13 years, they did not make any amendments—by choice—to the tolling regime. They did not do any of the things that she is suggesting, just to put the issue into context.

While it is tempting, we must be honest with our constituents that things have to be paid for, and they can be paid for in only one of two ways, one of which is for the cost to fall on the general taxpayer. Although the public finances have been hugely improved by the difficult decisions taken by the Government, they are in a state because we inherited them from the previous Government. There is no magic money tree to pay for the toll revenue. If we sweep the toll revenue away—I know how tempting that would be—either cuts will have to be made elsewhere, or taxes will have to rise. Politicians owe it to our constituents to be honest and frank with them. There is no magic money tree, and the bills have to be paid.

[Jessica Morden]

If we are to be honest with our constituents, does the hon. Gentleman accept that we should point out that the Government have now benefited by more than twice the debt on the bridge from unexpected tax income as a result of changes related to the bridges? The Government have actually done well in terms of VAT and other tax changes.

[Mr Harper]

That is a perfectly reasonable point, which of course has to be balanced—I am sure the Minister will set this out—against some of the costs. I am clear: I want the tolls to come down; they can certainly come down by the level of VAT. I certainly think that they can come down. All I am asking is that at this point the Minister does not suggest that the tolls are swept away, if the cost of removing them would mean that a future crossing over the River Severn either never happened or only happened at some far distant point in the future. I am only asking him not to make that decision today, given that we have not properly considered the arguments.

[Paul Flynn]

Will the hon. Gentleman give way?

[Mr Harper]

Let me just complete my point, and then I may take another intervention from the hon. Gentleman shortly.

I just want to respond to a point that the hon. Lady raised. I am sure that she did not do it deliberately, but she did not set out accurately for the House what the Welsh Affairs Committee said. I think that she said—I will take an intervention from her if I have misquoted her—that the Committee argued that the toll should be reduced to a level of £1.50, which would effectively just pay for maintenance. The Committee did not say that. It said that, if the toll was reduced to that level, that would allow

“the crossings to remain self-financing.”

It also said that

“the Government should seek to reduce the level of the toll at the earliest opportunity.”

However, it did not say that the Government should reduce the level to £1.50, because—this relates to my point about a future crossing—it said:

“We recognise…that at this level no “sinking fund” would be accumulated towards any future replacement of either bridge.”

The Committee also said, and I agree with the hon. Lady about this point:

“The Government must not be tempted to use the crossings as a ‘cash cow’.”

I agree with that, which is why if there is any future tolling over and above the level required for maintenance, the Government must be clear about its purpose. My view is that it must be used for infrastructure, which would benefit the hon. Lady’s constituents, my constituents and the economy of the UK. That would be the only scenario where future tolling, other than that required to pay for maintenance, would be acceptable. I agree with the hon. Lady about that, but I do not want the Minister to close any doors at this point.

[Paul Flynn]

The question that I asked the hon. Gentleman, which I am afraid he has not answered, was whether he foresees a repetition of what happened with the Severn Bridges Act 1992, which was that when the second Severn crossing was built, the two bridges were treated as one entity for financial purposes. Is he now suggesting that we should have another bridge that goes from one thinly populated part of England to another thinly populated part of England, which then becomes a financial burden on the people in south Wales, because those people will be paying tolls on it to use the main crossing from Wales to England? Can he please make it clear that he is asking for something that is entirely freestanding from one part of his constituency to another?

[Mr Harper]

At the moment, I have asked the Highways Agency to carry out some option appraisal work, to examine what options there might be for a further crossing over the River Severn, somewhere between the existing crossing at Over and the old Severn bridge. I asked because that detailed option appraisal work has not been done, so I have no idea where there may be sensible routes to cross the river, how much they might cost and what kind of traffic flows might be diverted. It is worth saying to the hon. Gentleman that, of course, there are significant traffic flows through my constituency that use my local roads, as people do not use the Severn crossings they ought to use because of the tolling. We have to look at all these issues in the round and make a proper judgment, which is another reason why the bridges need to stay under the control of the UK Government, so that different issues can be balanced. I accept that the hon. Gentleman and the hon. Lady will be completely focused on south Wales. Of course they will be; that is the part of the country that they represent. That is absolutely right, but I am focused on representing my constituents in England, and I want to ensure that all these judgments are properly weighed up. At this stage, I am not asking the Government to commit to tolling or to building another crossing. All I am asking at this stage is for the Highways Agency to respond to my request to consider the options, and for the Minister not to shut off future debate about what the tolling regime should be.

I have been quite clear—in an ideal world, I would like there to be no tolls on the bridges, or perhaps only those to cover maintenance. However, the fact is that if we want more infrastructure, it has to be paid for, either by general taxation, which is difficult given the difficult financial position that we inherited, or by the users of that infrastructure, or by a combination of the two. I simply want to ensure that we can have an open and frank debate in the future, and that we do not simply shut off any avenues. I think the hon. Lady was simply tempting the Minister to look forward four, four and a half years—or however long he will confirm to us—and make final decisions today that will shut off some of the opportunities for debate and for future infrastructure growth. All I am asking him to do is to keep those options open, so that we can have that debate, properly balance the needs of my constituents and his constituents, and the Government who are elected at the next election can make those sensible judgments. That is all I am asking for, and I hope that the Minister can confirm that that will be his approach.

--- Later in debate ---

[Paul Murphy]

I agree. That follows a pattern over the past few weeks, with a huge disagreement on taxation, but that is another issue. It would be worth while the hon. Member for Forest of Dean getting in his car one day, going on the M4 to Cardiff Bay, and chatting with the transport spokesperson for his party in Cardiff.

[Mr Harper]

I do not disagree with the right hon. Gentleman that the Welsh Assembly and Government have an interest in this. I agree with the conclusion of the Welsh Affairs Committee, chaired by my hon. Friend the Member for Monmouth (David T. C. Davies), that the British Government should discuss the matter and have a proper conversation, because it is important. My point was that decisions have to be taken by a Government accountable to people in England and Wales. The problem with decisions about the bridge tolls being wholly under the control of the Welsh Assembly is that my constituents have no democratic input into that Government, who will make decisions solely based on interests in Wales. The United Kingdom Government can consider the interests of the whole UK, and people living in both England and Wales. That is why the decision making should stay there.

[Paul Murphy]

Perhaps there should be joint decision making, or some arrangement could be made. Yes, of course, the bridge is hugely important to the people of the Forest of Dean and elsewhere in Gloucestershire, but that was not the purpose of building the bridges. I repeat that they were not built to go to the Forest of Dean or Gloucester; they were built to ensure that Wales and England were connected, to avoid the terrible journey through the Forest of Dean, around Gloucestershire and on to the A4.

--- Later in debate ---

[Paul Flynn (Newport West) (Lab)]

When the first bridge opened, Harri Webb wrote a telling poem, recalling the pressure from Wales over many decades to build the bridge. However, he made the observation:

“Two lands at last connected,

Across the Severn wide,

But all the tolls collected,

Upon the English side.”

Things have been corrected since then, but the hon. Member for Forest of Dean (Mr Harper) has released another hare that is running, and the implied threat of tolls in perpetuity will cause a great deal of interest in Wales. I believe he has in mind a repetition of what happened when the second bridge went up: the pooling of finances to build bridges into a great lump, with all the complexities of financing that, and added to the total bill and debt—if that still exists—would be a sum of money for a third crossing from somewhere in Gloucestershire to somewhere else in Gloucestershire. Those are thinly populated areas in which I doubt there is a strong case for putting in another bridge. If that is seen to be a further burden on the main artery out of Wales, that would be deeply resented, so we will be interested to see if that is pursued.

[Mr Harper]

I have two points. First, many people going into Wales do not use the bridges, but come through my constituency. That is an argument for reducing the tolls, as the bridges are not the only crossing. Secondly, I remind the hon. Gentleman, however, that, as I think the hon. Member for Llanelli (Nia Griffith) touched on, the old Severn bridge goes from England to England and it is used by people from England and Wales, not just people in Wales. Therefore, we need to take a balanced view about the impact. The crossing at Over that the hon. Gentleman referred to suffers from significant congestion. If he thinks that the area is thinly populated, I suggest that he goes there on a Monday morning at about 7 am to sit in a queue of traffic. He will see that it is not as thinly populated as he might think.

[Paul Flynn]

Like my right hon. Friend the Member for Torfaen (Paul Murphy), I am old enough to remember not only the opening of the Severn bridge, but the terrifying and unforgettable experience of going across on a ferry: there was roughly one inch between the car and the water on one side and about half an inch to the next car on the other side as they packed the cars tightly on to the ferry. To escape that nightmare, many made journeys around Gloucester. As he said, the congestion was pretty bad at that time. The hon. Gentleman has to make that case, but it should be separate from the Severn bridges, which are not only the main roads from Wales to England, but a main European highway. For those travelling from the continent right across to Ireland, that is the recommended route.

Unfortunately, we have had this long period of a perceived barrier in getting into Wales. It is a psychological barrier, but it is powerful. People see the crossing as an obstacle. They would say, “You mustn’t go that far, or we’ll be paying.” That barrier is perceived to be a great deal more than the actual cost. The toll is high enough, but if the total cost of running a car is added up—insurance, petrol and all the rest—it is not a huge percentage of that, except to those who travel across the bridge daily. The feeling that, somehow, this is an obstacle in the way of going into Wales has inhibited development and progress in Wales for many years.

I agree entirely with my right hon. Friend the Member for Torfaen that such costs appear to be created by accountants and it is difficult to argue against those. I can recall one time in the House when a courageous, or foolhardy, Conservative Member for Vale of Glamorgan argued for an increase in tolls. The toll was some £3.75, and he argued that it would speed the traffic through the bridge if the toll went up to £4, but that view was not universally supported.

We feel that this is the Roy Hughes memorial debate, because our late comrade mentioned the Severn crossings on more than one occasion, and probably on more than 1,000 occasions, in this House. He became very strongly identified with the bridges through his persistent, long campaigning. If he were alive today, he would be horrified that we are now faced with a new debt. The users of the bridges should be treated in the same way as users of other parts of the motorway network in the rest of the United Kingdom. They should not have to pay this unjustified toll in perpetuity, as it now seems to be. If the £88 million is paid off, the accountants in the Treasury would probably come up with some other pretext for charging even more and keeping the charges going.

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[Richard Burden]

If we do the sums, the point is still made. Whether or not the toll is free one way, the price is clearly still higher. Those amounts are not theoretical. We are living through the worst cost-of-living crisis in a generation and they hit people hard. A lot of attention has been paid to energy costs, fuel bills, food bills and so on, but the cost of transport is a large chunk of people’s household budgets. That has been made worse for domestic users of private motor cars because they have also been hit by the VAT increase to 20%, which has hit the price of fuel, too.

It would be lovely to say that the tolls should just be scrapped, but, as we have heard, that is not necessarily practical. There is a strong case, however, for considering whether there is a way to make the tolls fairer. It is possible to consider a cap on annual increases, which is a model we use for other modes of transport. There might be a way to take regular and local users into account, for which there are precedents. From March 2014, local people eligible for the resident discount on the Dartford crossing will be able to make unlimited trips over the crossing for just £20 a year, thereby ensuring that that toll on the strategic road network does not hinder local mobility.

[Mr Harper]

The hon. Gentleman makes a good point on the local discount, and my constituents have raised the Dartford issue. The Minister might want to address what “local” means. My understanding is that, for the Dartford crossing, it is a very local and tightly drawn boundary. If we had something like that on the Severn crossings, would “local” include my constituents? Would it include some of my constituents and some of the constituents of the hon. Member for Newport East (Jessica Morden)? How widely would the boundary be drawn? My view is that if we are to have such a boundary, the right people to make the decision would be the UK Government, who could take into account both sides of the national boundary, rather than just the Welsh side.

[Richard Burden]

I will address the UK Government and the Welsh Government in a while, but the substance of the hon. Gentleman’s point is correct. Working out the meaning of “local” is complex. I am simply saying that the Government should not close the door. They should consider it and see what is feasible, and they need to do so relatively quickly because decisions have to be made in the near future. The situation has gone on long enough.

--- Later in debate ---

[Mr Goodwill]

Yes, by all means. I have given the hon. Lady the latest figure on the VAT. If I may, I will write to her with a more up-to-date figure on the VAT, if we can get hold of it, and also on the buildings tax that she mentioned.

[Mr Harper]

On the VAT, may I clarify what the Minister said? I think he said that the Department for Transport can account for the gross amount of VAT collected, but it is not able to ascertain how much was reclaimed. It would be helpful, so that people can see the net amount that the Government have collected, at least to break it down into that collected for car users and that collected for freight. It would be a reasonable assumption that most freight users were VAT-registered and would therefore have reclaimed the VAT. It would be unhelpful for people to assume that the gross amount was collected and retained by the Government, and not to take into account the fact that for freight users, a lot of it would have been reclaimed, or would not have been a cost to their businesses.

[Mr Goodwill]

Yes, it would be reasonable to assume that most business users reclaim the VAT, so when we write to Members participating in this debate, we will estimate that level. When there is talk of the Government using this as a cash cow, it must not be forgotten that every vehicle saves 52 miles by crossing one of the crossings, but on the long journeys going the long way round, they would actually be paying a fair amount of fuel duty. So it is not simply that the Government benefit from the VAT; there is actually a loss in terms of the amount of fuel revenue that otherwise would have been collected.

I want to stress an important point: the Secretary of State does not have the authority to reduce Severn tolls without amending primary legislation and obtaining the concessionaire’s agreement. The concessionaire would not be able to agree to anything that would affect its net revenue without compensation and agreement from its shareholders and lenders, which would result, if such an agreement were forthcoming, in a cost to the taxpayer. Any discounts or exemptions are a matter for the concessionaire to decide, provided that those provisions comply with existing legislation, such as the Eurovignette directive. Where that is not the case, such schemes cannot be introduced without changes to the concession agreement.

Discounts of 10% for vehicles of over 3.5 tonnes, and 20% for other vehicles, are offered by way of a season TAG, based on 22 trips per month. Blue-badge holders and the emergency services are exempt. There are significant discounts for users, including businesses that make multiple trips per day. Tolls are charged in a westbound direction only, from England into Wales. The current toll prices are: £6.40 for cars; £12.80 for vans; and £19.20 for vehicles over 3.5 tonnes.

Once one-way tolling and the distance saved owing to the existence of the crossings are accounted for, Severn tolls compare favourably with toll levels on other crossings. On the points raised by the hon. Member for Newport East, I can give some examples. The toll for a car is £6.40, but, with the free return journey, it is equivalent to £3.20 for a saving of 52 miles; the Dartford toll is £2 for a saving of 22 miles; and the Tyne tunnel has a charge of £1.60 for a saving of only eight miles.

The hon. Member for Birmingham, Northfield mentioned lorries. In the case of the Humber bridge, lorries pay £12.50 for a saving of 45 miles, whereas on the Severn crossing—if we divide by two for the free return—it is £9.60 for 52 miles. Some of the comparisons made with other crossings in the country do not necessarily bear scrutiny, or perhaps Members can pick their example to support their case.