Severn Bridges: Tolls (Hansard, 3 June 1998)

§ The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman)
My Lords, while no such assessment has been made recently by the Government, the Severn bridges provide a major high quality link in the transport networks linking South Wales with the remainder of the United Kingdom and Europe. They are a major factor in encouraging new industries to locate in Wales and tolls and private finance were integral to the provision of the new Severn crossing.

§ Lord Islwyn
My Lords, does the Minister appreciate that over generations Wales has been plagued by unemployment, and that there are still many black spots? Yet to enter Wales through its main access point, a lorry pays a toll charge of £12.10, a light van pays £8.10 and a car £4. Is there any wonder that a recent survey of economic development officers by the CBI and the AA demonstrates clearly that the tolls are an impediment to investment by existing companies and new companies considering relocating there? Is it not time for the Government to give some thought to how the problems can be tackled?

§ Baroness Hayman
My Lords, I am well aware of my noble friend's concern about these matters. He stated the concern expressed in the Western Mail as regards the AA/CBI report to which he referred. I have seen that report. It dealt with the need for investment in transport infrastructure in the whole of the United Kingdom. That was one comment among many in one small section of the report. The evidence indicates that in 1996–97 Wales secured 22 per cent. of all new jobs promised for the UK by foreign direct investment. That is with a population of 5 per cent. of the UK. So there is not a great deal of evidence that tolling acts as a disincentive to investment, although in view of the unemployment concerns to which the noble Lord referred, it is a matter that the Government will keep under review.

§ Lord Mackie of Benshie
My Lords, is the Minister aware that the charge of £4 for a motor car to cross one of the busiest and most prosperous parts of Wales and England is cheap compared with the charges in Skye, one of the poorest parts of Scotland?

§ Baroness Hayman
My Lords, the noble Lord tempts me to report to the House that in response to a manifesto commitment to review the impact of tolls on low income island communities, frequent users of the Skye Bridge now pay £2.60 for a round trip. Therefore those concerns were addressed.
339 I know to my cost that issues of comparative prices on tolls are controversial, but I believe that the balance is right.

§ Lord Roberts of Conwy
My Lords, is the Minister aware that we wish that high level of investment under the Conservative Government to continue under the present Government? Anything that can be done to alleviate the toll situation over the Severn bridges would be most welcome.
Although there have been complaints over the years about the toll on the Severn Bridge (now the Severn bridges) is it not a fact that the previous Labour government did not abolish tolls? Is it, or is it not, the intention of the present Government to abolish tolls over the Severn bridges? They may not wish to do so because the cost would be prohibitive.

§ Baroness Hayman
My Lords, we do not propose to legislate to change the current toll structure under the Severn Bridges Act 1992. That is because we recognise, as I said earlier, that there is not a disincentive to investment in Wales by the tolling. Since the new crossing has opened, heavy goods traffic has increased by 6 per cent. to 8 per cent. compared with 5 per cent. to 6 per cent. growth in car traffic, which suggests that the economic traffic is still travelling there.
As regards records of comparative governments, my right honourable friend the Secretary of State for Wales announced last month plans for a new £15 million European rail freight terminal in Cardiff which will open in 1999. It will provide much needed infrastructure to encourage further development in the Principality, an aim which was notably absent from the programme of the previous government.

Viscount Bledisloe
My Lords, can the Minister explain why the tolls over the Severn are so much higher than those over, for example, the Forth and Clyde? Surely one would expect that the high usage should render the toll lower since the overheads can be regained over a larger number of vehicles.

§ Baroness Hayman
My Lords, the tolling regime on different crossings are related to the financial costs of the infrastructure and to the concession agreements granted in relation to them. The Severn River Crossing plc elected to charge tolls in one direction. That decision was reflected in the provisions of the Severn Bridges Act 1992 and its concession agreement.
As I said earlier, it is invidious to make comparisons between individual pieces of infrastructure, each of which has separate concession agreements relating to them.

§ Lord Islwyn
My Lords, does the Minister appreciate that under a Labour Government only a minimum toll charge applied? Under the new regime, the charges have escalated significantly.

Noble Lords
Oh!

§ Lord Islwyn
My Lords, I refer to the Severn bridges regime. Does the Minister further appreciate that there is now a renewed threat of VAT charges on top of those tolls?

§ Baroness Hayman
My Lords, the Government are concerned about the threat from the European Commission of VAT being charged on tolls. In common with France, Greece, the Netherlands and Ireland, this country fails to charge VAT on tolls and does not believe that tolls should be subject to VAT. Hearings are scheduled later this year at the European Court of Justice, with a final decision by the Court towards the end of 1999. We shall certainly defend our position in relation to ECJ infraction proceedings.

§ Lord Hooson
My Lords, I should, first, declare an interest as I am the chairman of Severn River Crossing plc—

Noble Lords
Oh!

§ Lord Hooson
Is the Minister aware that, despite the tolls, the increase in investment on both sides of the estuary has been very great during the past two or three years because the transport facility is so much better than it was before? Do the Government appreciate that when the two bridges are returned to them, free of all charges and in pristine condition within the time allowed by the Act of Parliament, they will be in a position to abolish all tolls, as will be the case with the Dartford bridge? However, do the Government intend to do so?

§ Baroness Hayman
My Lords, as the concession will continue for a maximum of 30 years and the prediction is that it will end after 22 years in the year 2014, it would be a foolish Minister who committed a future government to detailed policy at this point.