Severn Bridges (Tolling)

Debate between Nia Griffith and Robert Goodwill

Wednesday 5th March 2014 Westminster Hall

[Nia Griffith]

Yes, indeed. Of course, many other firms in Wales are affected by the tolls on the bridge, too. Whether it is a small electrical contractor, a plumbing business wanting to serve customers on both sides, or a large haulage firm, those businesses are at a disadvantage compared with competitors who do not have to use the bridges regularly.

[Mr Goodwill]

To clarify, on discounts for frequent users in heavy goods vehicles, the Eurovignette directive imposes a 13% cap on any discount for HGVs, and the discount for HGVs on the Severn is near the maximum allowed under that directive. I do not need to mention that hauliers reclaim the VAT on these charges.

[Nia Griffith]

I was about to come on to the issue that the Minister mentions. He kindly sent me a letter containing that information this week. What I would ask is: how close are we to that 13% limit? Is there any wriggle room at all, and would it be possible to open a discussion on further concessions? I think he said in our meeting that that would be likely only if we had a tit for tat, and traded such concessions off against others. If anything like that were to be suggested, the freight companies would need to be closely involved and see the detail, because they would not want to end up paying much more in the daytime to get a night-time concession if their bills ended up being higher. They are still interested, however; they have said that they would be interested in looking at concessions, even if that means that the tolls continue a little longer beyond 2018.

I question the suggestion that EU law means that freight and ordinary car use charges cannot be varied, and whether that is a competition issue. If all freight lorries use the bridge no matter where they come from, it would not be a matter of having more favourable laws for British-based lorries than for Dutch or French-based lorries. It would be helpful to have a little more information on that.

[Mr Goodwill]

The current 10% discount, which is offered by way of the season TAG, is based on 22 trips a month; that is quite close to the 13% maximum.

[Nia Griffith]

Perhaps I could ask the Minister to look at that remaining 3% and see if there is any wriggle room at all, because when we are talking about paying the huge amounts mentioned by my hon. Friend the Member for Blaenau Gwent (Nick Smith), even 3% would make a considerable difference.

VAT is a massively important question. The Minister confirmed in his letter to me that VAT comes off the charge when the crossing is managed by a public, rather than private, company. We would be delighted if that meant an automatic 20% decrease. However, if the rates were to be kept the same, that would be a massive penalty for all the business users who currently reclaim the VAT, because effectively they would have to pay 20% more and would have no opportunity for clawback.

My right hon. Friend the Member for Torfaen (Paul Murphy) mentioned the figure of £112 million. Mercifully, the letter from the Minister says that that has reduced to £88 million. Of course, we on the Welsh Affairs Committee would be pleased if the Department for Transport were to revise that figure downward again. There was an issue about how that was calculated in the first place, and we want to ensure that we get up-to-date information about that. Although the Minister previously said that 2018 was a long way away, firms such as Owens are investing long-term, looking eight to 10 years ahead, and they have to make decisions. The more certainty such firms can have, the better.

The Minister may think that we will have another Government in place in 2018—some of us hope that we will—but I am sure that every Department plans ahead and thinks about what it would do. The Department for Transport is in a position to make the necessary assessment and get hold of the statistics, so that we can have more information about the £88 million being paid back, about when there will be an opportunity for the bridge to be debt-free and just have a maintenance charge, and about what would be done with that maintenance charge.

I am a little concerned by the hon. Member for Forest of Dean (Mr Harper) saying that he would like a levy on the existing bridges—in other words, on people coming into Wales—to fund a bridge further up the river. I much prefer his first suggestion, which was that such a bridge should be funded through general taxation spread across the UK, to the suggestion that we penalise one particular group of users. One of the main bones of contention about the bridge all along has been that such charges are unusual in this country; it is not like in some countries on the continent where most of the motorway network is tolled. That is why there is such great resentment of the toll, and the level of it, in the first place.

We certainly want a little more clarification of what will happen in the future. I would be grateful if the Minister gave us any indication of where we are going, and kept the Welsh Affairs Committee fully updated with any further information.