§ 7.5 p.m.
§ The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen)
My Lords, I beg to move, that the Bill be now read a second time.
The Bill will provide the Secretary of State for Transport with the power, by order, to suspend interest payments and to write off debt for the major part of the Humber Bridge debt that is owed to the Government.
The local authority-promoted Humber Bridge Acts of 1959 and 1971 established the Humber Bridge Board with powers to borrow and to construct the bridge, but there were no powers to write off debts.
In 1969 the Government formally decided that the bridge should be built and in 1971 they agreed to provide loans to finance the construction costs. The bridge did not open until 1981 because of technical problems and industrial disputes.
The cost of financing the construction of the Humber Bridge was a great deal more than the board's estimate in 1970 of £20 million. The opening debt in 1981 was £151 million.
The bridge was built to promote the regeneration of south Humberside, but unfortunately the expected economic growth did not occur. With less traffic and less toll revenue than expected, unpaid interest on loans was capitalised, and the debt rose from £151 million in 1981 to the £439 million by March 1992.
1611 In 1986 the Government undertook to write off debt which could not be recovered from tolls set at the highest realistic level. After tolls were set at their present levels in August 1989, the board made a case for government financial assistance and undertook to promote a Private Bill to index its tolls.
In July 1991 the Government undertook to legislate for powers to write off and suspend some of the debt. That promise has enabled the Government since February 1992 to meet unpaid interest by annual grants of £40 million under the Appropriation Acts. That temporary expedient halted the increase in the debt, and even slightly reduced it.
We wish to rid local taxpayers of Hull of the threat of having to pay over £200 a year each to meet the current deficits, but we do not rule out precepting. It is the board's responsibility to decide on whether to use precepting or further to increase tolls.
In using the Bill, we will safeguard national taxpayers from any unnecessary contributions. We will encourage the bridge board to set and maintain a high but realistic level of tolls. However, we will not prejudice the Secretary of State's role, under the current legislation, of considering toll applications fairly.
How much debt will be written off, and how much will he suspended, will be negotiated with the bridge board using detailed financial projections. Some suspended debt could he reactivated in the future.
It is a great pity that this Bill is needed, but the need for its powers should be indisputable and uncontroversial. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Viscount Goschen.)
§ Lord Gladwin of Clee
My Lords, I apologise for detaining the House on this issue late at night but the Bill is important for those who live and work on both sides of the River Humber.
The campaign for a river crossing started 100 years ago and between 1850 and 1930 the idea was that there should be a rail crossing and, at some stage, a tunnel, because it was not thought that a road bridge was possible. However, a report that was commissioned by the City of Hull in 1930 stated that a road bridge was possible and the local authority and the Government agreed that a bridge should be built. The Government agreed to pay 75 per cent. of the cost of £1.7 million, which was warmly received by the citizens on both sides of the river. However, in 1931, due to the financial crisis, that proposal was put to one side. Nevertheless the campaign continued.
The first time I remember being taken by my parents across the river was in 1937. That was quite an adventure. We had to get a train from Cleethorpes to New Holland Pier along the south hank of the river, and then wait for the paddle steamer—the ferry—to come. The train journey took 45 minutes. The ferry took either 30 minutes or one hour and 30 minutes, depending on the tides, the weather, the captain and the state of the sandbanks. We did not have a car in those days, but if we had we would have to have gone round the 85 miles 1612 from Grimsby to Hull in order to go to the pantomime. This stretch of water is in some parts three miles and in other parts one mile across.
I recall that 40 years later little had changed. The same ferries were still running. They are very sturdy vessels. One of them is moored on the Thames not many yards away from this Palace. But there were two significant changes. First, the road bridge that had been talked about for 40 years was under construction, but unfortunately it would be a further four years before it was opened; and, significantly, the new east-west motorways—the M.62, the M.18 and the M.180—linking both north and south Humberside with the national motorway network, were either open or due to be opened within a year or two. They were certainly all open before the bridge was completed in 1981.
The bridge was due to be completed in 1977 but a combination of unusually poor weather conditions, subsidence on the south bank of the river, which created technical problems for its construction, and severe labour relations problems meant that it took nine years to complete rather than the projected four-and-a-half years. As a result, costs increased significantly and the debt burden grew to the figure the Minister stated—£439 million in 1992.
The Government recognised some five years ago that this enormous debt could not be paid either out of toll income or by a precept on the local taxpayers of Hull and two small neighbouring authorities. Since February 1992 help has been given to meet unpaid annual interest charges, but this Bill will enable the Government and the bridge board to agree a long-term solution to the problem.
The present level of tolls on the bridge was fixed in 1989. The board is currently proposing an increase of 32.5 per cent., which would maintain the tolls at 1989 levels. That proposal will go to a public inquiry some time this year. The increase will undoubtedly shut off traffic flow for a short time but it will still be cheaper to go over the bridge than go all the way round via Goole.
I know it is not possible for the Minister to indicate how much of the debt the Government are prepared to write off, but I would urge him not to press the bridge board to push up toll charges to meet this somewhat artificial debt burden. The bridge makes an operating surplus, which this year is estimated at £10 million. Six million vehicles use it every year. The bridge is now part of the national road network. Local people are very proud of the bridge. It is a beautiful and very fine example of British engineering, and overseas orders are won on the strength of Britain's ability to build such structures. Economic development has been influenced by the existence of the bridge. From my own personal knowledge, inward investment on the south bank has happened because of the bridge.
The new unitary authorities of North East Lincolnshire, North Lincolnshire and the City of Hull, which come into being in April this year, will continue to work together to develop an economic growth policy for the Humber estuary, with the help of the Government's Yorkshire and Humberside regional office. The Humber Bridge is an integral part of that 1613 policy and nothing should be done which makes the use of the bridge more expensive just to pay off this historical debt. I welcome the Bill.
§ Lord Clinton-Davis
My Lords, I thank the Minister for his brief explanation of the Bill. I also thank my noble friend for his intervention. It enabled us to hear his reminiscences about his boyish peregrinations around this area. I always enjoy anecdotes because 1 have now reached my anecdotage. He argued cogently the benefits that the bridge has brought, although in financial terms there are certainly the negative factors to which the Minister alluded. However, overall, the bridge has been of benefit to the region and to Hull in particular. It has helped to reinvigorate the local economy, which is not an unimportant factor.
My noble friend also referred to the outstanding skill that was exhibited in designing the bridge and in the engineering accomplishments that went into its construction. Those may well have important spin-off effects in terms of the way in which those skills can be utilised overseas. They are certainly a tribute to British engineering techniques.
We support the Bill and we shall cause the Minister no trouble in its enactment.
§ 7.16 p.m.
§ Viscount Goschen
My Lords, I thank both the noble Lords who have taken part in the debate. I, too, was pleased to hear about the boyhood experiences of the noble Lord, Lord Gladwin. There are no doubt important lessons for all of us to learn there.
It is not my intention to replicate the knockabout arguments that have taken place both in another place and outside Parliament on the history of the inception of the bridge. Suffice it to say, it is certainly a bridge of which we can all be proud in engineering terms, but there has been a really serious financial problem surrounding it.
The Bill is the correct vehicle to put that problem right and to put the bridge on a sound financial basis. There is a lot of work still to be done, but I believe that the passage of this important Bill will help with it. It is regrettable that we have had to bring the Bill forward but it is necessary that we do so. I commend it to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.