Severn Bridges (Tolling)

Richard Burden Excerpts

Wednesday 5th March 2014 Westminster Hall

[Richard Burden (Birmingham, Northfield) (Lab)]

I congratulate my hon. Friend the Member for Newport East (Jessica Morden) on securing this important debate, which will now always be known as the Roy Hughes memorial debate. I also congratulate the no fewer than eight hon. Members who have participated either through interventions or speeches. In the last speech, my hon. Friend the Member for Newport West (Paul Flynn) even treated us to some Harri Webb poetry.

The Severn crossings clearly concern hon. Members on both sides of the House because they are an important transport link between England and Wales that play a vital role for businesses and the economy, that help people to keep in touch with friends and family and that keep our two countries connected. It is therefore unfortunate that the cost and experience of using the crossings have been a source of frustration for so long.

My hon. Friend the Member for Newport East has raised the Severn crossings previously. For many years she has been pressing for reform of what, in her previous debate in 2010, she called an “expensive, inconvenient and inflexible” system. The issues that she has raised today are very much the same.

I will say something about England later in my speech, but the crossings are a key link in the transport and economic infrastructure of Wales, and they are essential to the Welsh economy and its ability to grow. Approximately 25 million vehicles use the crossings each year. Obviously, nobody wants to pay tolls, but the benefits of the crossings are clear and include increased access to markets, suppliers and consumers, and quicker journey times. It is important, however, that the toll price reflects a fair balance between the cost of better infrastructure and the benefits to the people who use it. This debate has made it clear that the cost of the Severn crossings does not appear to be fair, and it has not appeared to be fair for some time. Road users who rely on the crossings have been hit hard by annual increases and, as my hon. Friend said, an inflexible and old-fashioned payment system.

There is an impact on people. First, the tolls are the highest of any crossing on the strategic road network. As we have heard, the current prices are £6.40 for a car, £12.80 for a light goods vehicle and £19.20 for a heavy goods vehicle. On the Humber bridge, the toll for a car is just £1.50 and the toll for an HGV is £12.

[Mr Goodwill]

The hon. Gentleman must bear in mind that the toll is free in the other direction on the Severn crossings, so the prices are not comparable in that respect.

[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.

[Jessica Morden]

That is the point. We do not know whether the Government are even considering the measure. We want clarity.

--- Later in debate ---

[Richard Burden]

My hon. Friend makes her point well.

I have principally referred to the impact on private transport and cars, but the tolls also significantly affect local businesses. We have heard that many believe the cost of the crossings to be a tax either on Wales or on people trading with Wales that restricts economic activity between our two countries. Even if that is only a perception, it is a problem for confidence. As we have all said, the crossings are undoubtedly an essential link between our two economies, so it is fair to welcome the Welsh Assembly’s analysis of tolling, which provides important evidence on the economic impacts of the Severn tolls. The picture is complex, as has just been underlined by the hon. Member for Forest of Dean (Mr Harper), but the research shows that the tolls have a severe impact on small businesses, particularly those operating in the transport and logistics sectors across the border. My hon. Friend puts the figure for some businesses at up to £250,000 a year, which is a major burden on a small business. Indeed, it is a pretty significant burden on a business that is not small, too.

There is also an impact on tourism, particularly on those making short trips. When asked if they would expect to make more trips to Wales by car if the Severn tolls were removed, apparently 22% of people surveyed in south-west England said that, yes, they would visit Wales more often in the next year, which is a significant statistic.

In light of those serious concerns for small businesses, tourism and wider economic growth, we would all appreciate the Minister’s assessment of the social and economic impact of the Severn crossings. Also, we would all appreciate knowing the Government’s response to the evidence produced by the Welsh Assembly, which provides food for thought and, hopefully, food for Government action.

I have mainly referred to Wales, and the Severn tolls are not just an issue for south Wales. They are a whole of Wales issue that affects tourism and businesses across the country. The crossings also affect England, particularly south-west England, and businesses and people travelling from further afield. I am pleased that the hon. Member for Forest of Dean made his point on that today. The issue is important and has been raised with me by Steve Parry-Hearn, who, as the Labour candidate for the Forest of Dean, is after the hon. Gentleman’s job. Mr Parry-Hearn has clearly outlined to me the impact of tolls on people in that area. Small and medium-sized enterprises are hit hard by the cost of the crossing, either directly from the tolls or indirectly from increased traffic as operators attempt to avoid bridge tolls by using other roads. He is campaigning against the level of the charges, which he says are having a

“detrimental impact on the lives of working families, businesses and on tourism across the Forest of Dean.”

My hon. Friend for Newport East referred to a protest on the Severn bridge at the weekend, coinciding with St David’s day, which showed the level of local anger. I must admit that I was not aware until today of the particular attire worn on that protest. I hope the Minister listens to those voices and considers discounts for regular business use or some kind of flexible pricing structure. Off-peak pricing for businesses has been suggested, which could provide an economic boost, cut congestion and mitigate the environmental impacts of heavy traffic at rush hours. These things are complex, but I would appreciate the Minister indicating whether he is prepared to consider such options.

We have heard that it is not only the costs of the crossing that are such a big issue, but the lack of convenience. There is no doubt that the Severn crossing has provided a poor service to users. It is absolutely astonishing that a modern card payment system was not introduced until 2011. I note the efforts of my right hon. Friend the Member for Tooting (Sadiq Khan) in his previous role as Transport Minister in helping to make that finally happen. It was overdue. Even with that, the Severn crossings are still playing catch up. I understand that the system still requires road users to enter their PIN number into a handheld device, which takes time. That means that cash is still encouraged for quicker transit.

The technology exists for easier and more convenient methods. Remote payments are a possibility and free-flow technology is set to be implemented at the Dartford crossing later this year. Will the Minister confirm the Government’s plans for further modernising payment and usage at the Severn crossing? Can some kind of free-flow technology option be considered? Will he consider the recommendations of the recent Driver and Vehicle Licensing Agency review, which called for the agency in Swansea to become a digital centre of excellence? That could be a real opportunity to make online payments and improved digital services a reality on the Severn.

On questions for the future, “What next?” will be important for whichever Government is in power after 2015. I have talked about reforms to price and payment that could bring big benefits for users, but those do not on their own fundamentally address the main point, which is that the concession will soon end. I understand that the estimated end date has slipped again, because of the VAT rise and the costs of introducing card payment. When the date finally does arrive, the crossing will revert to the control of the Secretary of State and into public ownership. The annual cost of maintaining and operating the toll will only be a fraction—20%, I understand—of the current net revenue made from the crossing, which was estimated to be £87 million in 2012-13.

As we have heard, the Government will be left with an estimated debt of some £88 million due to extra operating and maintenance costs. My hon. Friend has asked a perfectly reasonable question. As well as confirmation of that figure of £88 million, it would be useful to have a breakdown of it. That would inform decisions about what is fair for the future. In the fairly near future, a decision must be made about how the debt will be recovered and about future toll charges. That is why it is important that the Government work in partnership with the Welsh Government and the Welsh Assembly to sort these things out. They should also work with Severn Crossings plc, while it is the concessionaire, to prepare for that without losing much more time.

Last week, the Department for Transport launched a consultation to simplify the procedures for toll increases at local statutory tolled bridges, tunnels, lifts and crossings. If the Minister is considering how best to regulate the price of tolls across the UK, will he set out a clear strategy for the future of the Severn tolls at the same time? The consultation creates an opportunity to do that, and I hope he will seize it.

--- Later in debate ---

[Mr Goodwill]

If the hon. Lady looks into it in more detail, she will find that the Humber bridge review in 2011 found that the Humber bridge had a unique burden of interest in relation to its original cost of construction more than 30 years ago. Although the bridge cost only £98 million to construct, rolled-up unpaid interest meant that the bridge debt had grown to £439 million by 1992. Such unique circumstances justified the Government writing off £150 million of the £332 million owed to them by the Humber bridge board. I hope that provides some context. Some Members might even remember Barbara Castle announcing the construction of the bridge at a by-election in Hull.

At the end of the concession, the Severn crossings will revert to public ownership. The Government will need to continue tolling to recover the costs that they have incurred falling outside the concession agreement. The Department’s latest estimate is that they will be £88 million at the projected end of the concession in 2018, and it will take one to two years to recover that money. Once in public ownership, VAT will no longer be payable on the tolls.

My hon. Friend the Member for Forest of Dean (Mr Harper) raised various issues. I can confirm that the bridges are indeed a UK asset for the benefit of all UK road users and taxpayers. Much has been said about the Treasury or the Government benefiting from this, but I humbly suggest that it is taxpayers who benefit, and the debt that we have inherited from the previous Government can be reduced by the tolls.

My hon. Friend spoke about maintenance of the bridge, which is of paramount importance. I am well aware of the issue with the cable on the old bridge, which I am pleased to say has now been stabilised, but the toll income already pays for maintenance. On his other point about a new bridge upstream, which would avoid a 33-mile round trip via the M48, there are precedents around the country. There is the Merseylink toll, although those bridges are slightly closer together, and many consider that a new lower Thames crossing could incorporate the existing tolls from the Dartford crossing to make it affordable.

[Richard Burden]

On the £88 million, I am pleased the Minister has clarified that that is the estimated figure. However, might we have a breakdown of how that is made up? What is the debt that is estimated to remain?

[Mr Goodwill]

I am more than happy to provide the hon. Gentleman with that information.

In conclusion, no decisions have been made regarding the operation and tolling arrangements for the crossings once the current regime ends. However, the Government have been clear that any future arrangements will need to make proper provision for repayment of Government costs and future maintenance, and reflect the needs of road users in England and Wales. I suspect that this is something that various political parties may visit when they write their election manifestos, although there is nothing to stop the hon. Gentleman making an announcement today about what a Labour Government—were we to get such a Government after the election—would do at the end of the concession, or at the end of the period when the tolls are paid off.

The Government are committed to the successful operation of such vital crossings. They have provided a huge benefit to the Welsh and English economies through quicker access to places and markets. As the concession draws to an end, the Department will work with key stakeholders, including the Welsh Government, affected local authorities, business representatives, the Welsh Affairs Committee, and other interested parties.