Tolls (Severn Bridges)

Debate between Nia Griffith and Norman Baker

Wednesday 23rd June 2010 Westminster Hall

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I wish first to congratulate the hon. Member for Newport East (Jessica Morden) on securing the debate. I thank her very much for her kind welcome to me in my new post. Our commitment to the issue is not in doubt, and I hope that the fact that it is taking place during another event outside the House demonstrates to her constituents her dedication to the issue—assuming, of course, that they will support England.

Before I start to discuss the tolls on the Severn crossings, I wish to make the point that, since 1945, it has been the policy of successive Governments that crossings on estuaries should be paid for by the user rather than by the taxpayer. Successive Governments have taken the view that tolls on all such crossings are justified because the user benefits from the exceptional savings in time and money that those expensive facilities make possible. It is important to make such a point at this stage. It is one that should not be forgotten, not least of all with the present financial difficulties that the Government and country face.

In specific relation to the Severn crossings, it might be helpful if I give a brief outline of their history, some of which is relevant to the issues that have been raised. The first Severn bridge was opened by the Queen in September 1966, providing a direct link from the M4 motorway into Wales, with a toll in place for use of the bridge to pay for the cost of construction. The original bridge continually operated at significantly above its designed traffic capacity, so the then Government said in 1986 that a second bridge would be constructed. In July 1988 they announced that the private sector would be given an opportunity to participate in the scheme and in April 1990 they announced the selection of the bid led by John Laing Ltd with GTM-Entrepose to design, build and finance the second crossing. That consortium was also to take over the maintenance and operation of the existing Severn bridge.

In October of that year, the concession agreement was formally signed between the Government and Severn River Crossing plc, and in February 1992 the Severn Bridges Bill received Royal Assent. The concession agreement was enshrined in an Act of Parliament and commenced in April 1992. Severn River Crossing plc then took over both the operation and maintenance of the present bridge and the construction of the new bridge. The finance arranged by the company covers the cost of construction for the new bridge and pays for the outstanding debt on the present bridge.

Construction of the new bridge started in September 1992 and the new crossing was opened on 5 June 1996 by the Prince of Wales, almost 30 years after the opening of the first bridge. The concession period is limited to a maximum of 30 years. The actual end date will be achieved when the concessionaire has collected a fix sum of money from tolls, which is £995,830,000 at 1989 prices; that is £1.8 billion at today’s prices. As part of the concession agreement, Severn River Crossing plc is authorised to collect tolls to meet its financial obligations. It is worth stressing that that is the company’s only source of income.

Let me make it clear why tolls are collected at the crossings. Tolls are in place to repay the construction and financing costs of the second Severn crossing, the remaining debt from the first existing crossing from 1992 and to maintain and operate both crossings. I have seen no evidence to suggest that the tolls impact on the economic viability of Wales, although I note the concerns of hon. Members about the impact of the tolls in their constituencies. Clearly, there is a cost to the crossing, which is borne by business and those who pay the tolls, but that has to be weighed against the benefits that the crossings provide in terms of more direct access into Wales, allowing users quicker access to markets than would otherwise be the case. However, I am happy to receive and to look at evidence from the Welsh Assembly, hon. Members or others. That is an open invitation to supply such information to me.

[Nia Griffith]

Does the Minister agree that in a situation where tolls are not the norm on other roads, it makes a firm such as Owens feel at a distinct disadvantage when it is competing with firms whose distances from the main markets and from the channel ports may be similar, but who do not have to make their route via a tollbridge, and that there is therefore a feeling of economic inequality in that instance?

[Norman Baker]

I do understand that. I mentioned earlier that it is standard practice for estuary crossings to have tolls, no matter where they are. They limit the journey time and deal with—or compensate for—the geography of the area. While I understand that there is a cost involved that would not be there if a crossing were not necessary, the alternative to a toll crossing would be a much longer diversionary route. That is a matter of geography; I am not downplaying the concerns that hon. Members and others have about the impact. As I said, I welcome any further information that they want to give me on that matter, and I will personally look at it.