Severn Crossings Toll

Jessica Morden Excerpts

Thursday 19th May 2011 Westminster Hall

[David T. C. Davies (Monmouth) (Con)]

Everyone seems to be leaving the Chamber, which is sad because very few issues cause more rows in pubs and constituency surgeries in south Wales than the Severn bridge. You might expect me to declare an interest at this point, Mr Davies, but one of the bits of pub trivia that came out of our inquiry is that I do not need to do so, because neither of the Severn bridges starts or ends in my constituency. One ends in the constituency of Newport East, and the old Severn bridge starts and ends entirely in England before joining the Wye bridge. It would, therefore, be difficult for some of the Members who have left the Chamber to demand that the old Severn bridge be partly administered by the Welsh Assembly Government in Wales, because it does not actually come into Wales at all.

The issue for all of us is the price. It has confounded us in constituency surgeries throughout south Wales and the M4 corridor. It is worth setting out some of the background. The second Severn crossing was built by a consortium of four companies, which became Severn River Crossing. Not only did they build the second Severn crossing, but they took on the debt of the old bridge, which amounted to about £450 million. The deal was that they could collect just under £1 billion, which was linked to inflation, and that, once that money had been collected, the bridge would revert to public ownership. At present, that is expected to happen in around 2017.

It became clear to us during the course of our inquiry that, no matter how angry we might get over the level of the tolls and no matter what impact we might think it has on the economy, there is very little that any of us, including the Minister, can do about it. This is a matter not of the Minister deciding what he wants to set the toll at for any given year, but of straightforward contract law that would be backed up by the courts. The deal was struck in 1992 between the then Government and private companies, and there is no flexibility in it whatsoever.

[Jessica Morden (Newport East) (Lab)]

Was the hon. Gentleman as surprised as I was to see the Welsh Conservatives pledge during the Assembly elections to freeze the tolls immediately?

[David T. C. Davies]

I must admit that that was a surprise to me. It would, of course, have been feasible to do it, but a Conservative Government in the Welsh Assembly—which was, sadly, not to be—would have had to pay back all the money to Severn River Crossing. That would have been a significant amount of money. I am not sure whether the policy applied to heavy goods vehicles—I believe that it applied just to cars—but it would still have been significant. The point is that SRC could not simply have been told to freeze the tolls without compensation being paid, because its shareholders would have had every right to take the Welsh Assembly Government to court. There would have been some practical difficulties in implementing that policy, because I presume that it would have been up to the Welsh Assembly Government to negotiate the rate directly with SRC. I am not sure how far down the line the negotiations went. It would have been feasible, but it would have been a challenging proposition. Sadly, it will not come to pass, because of the efforts of the hon. Lady’s party.

--- Later in debate ---

[Jessica Morden (Newport East) (Lab)]

It is good to see the Minister here to respond to the debate. I thought that his evidence to the Welsh Affairs Committee was frank and that he seemed very engaged in the matter. As someone who has been talking about the Severn bridges for some time, I appreciate that.

Like the hon. Member for Monmouth (David T. C. Davies), I obviously have a strong constituency interest in sorting out the issues surrounding the Severn bridges. I commend the hon. Gentleman for the way in which he chairs the Welsh Affairs Committee and for deciding that this should be one of the first inquiries following the election. The evidence that the Committee has received backs up what I have heard from my constituents for many years, which is that the crossings are too expensive, inflexible and inconvenient.

As I said in a Westminster Hall debate last year, until very recently people could not pay by credit or debit card, and they cannot pay online or travel off peak. There are no concessions for people who live locally. Yet the tolls continue to rise year on year, even though the service is outdated. I do not apologise for raising the matter again because, although Severn River Crossing has a responsibility to its shareholders—as has been mentioned—I feel a responsibility to my constituents, who are the customers. I would like Severn River Crossing to pay a little more attention to the customers.

[Nick Smith (Blaenau Gwent) (Lab)]

I, too, congratulate the Chair of the Committee, the hon. Member for Monmouth (David T. C. Davies), on covering the topic, which is certainly important to my constituents. I want to take up my hon. Friend’s point about a permanent system not yet being in place for credit card payments. It seems mad that, in 2011, there is not yet a permanent system in place for people to pay their toll with a credit card. That is absolutely bonkers. If someone goes to the bridge on a Friday evening, there are massive queues. Often people arrive there and they do not have enough cash. That has happened to me on my way home. I have not had enough cash and I had to get off at the service station beforehand to get some. Getting cash in that way can cost money, as people might have to use one of those machines that charge. Would it not be much easier if commuters, hauliers and others could use a credit card easily to cross the Severn bridge?

[Philip Davies (in the Chair)]

Order. I ask for interventions to be brief.

[Jessica Morden]

I thank my hon. Friend for his intervention. There is no permanent solution to that at the moment. I travelled over the bridge last Thursday night, and although I believe that a temporary measure is in place, there is still no permanent fixture. I am sure the Minister will correct me later if I am wrong on that. I will move on to that issue later.

The Committee heard anecdotal evidence about the economic impact of the tolls on businesses and commuters, and it welcomed the Welsh Assembly’s commissioning an assessment of the economic impact of the bridge’s operation. The Government response refers to new business investment in Wales. I want to add my own anecdotal evidence. Haulage companies in my constituency, and I suspect in the constituency of my hon. Friend the Member for Blaenau Gwent (Nick Smith), are being severely impacted by the tolls, as the charge is not borne by companies just over the bridge. For example, Owens Road Services is a long-standing Welsh company with a base in Newport. It represents 1% of the total heavy goods vehicle traffic on the crossing and pays £200,000 a year. Toll increases keep coming off its bottom line. The Welsh logistics industry is paying a charge that is not paid by competitors in England. I speak weekly to commuters—for example, teachers—who travel to Bristol. They are suffering every day at a time when hours are being cut, wages frozen and fuel prices are high.

As the hon. Member for Monmouth has said, what came out loud and clear from the Committee’s inquiry is that the contract negotiated with Severn River Crossing is very restrictive and that the Secretary of State’s powers are constrained by that. However, where there’s a will, there’s a way. I still want the Government to pursue the issue of a toll freeze. I took the Minister at his word when he said it is difficult, although as we referred to earlier, there are people in his party who see the matter slightly differently.

On 6 April, which was just a few weeks after the Minister gave evidence to us, during the Assembly elections, the Welsh Conservatives pledged that

“a Conservative Assembly Government will freeze Severn Bridge Tolls cars at their current level. The freeze will be brought in immediately.”

As an aside, there was no mention of business vehicles, which has not gone down particularly well. I am genuinely bemused by that. Has the Minister committed to doing that or do the Welsh Conservatives just not know that the bridges are not devolved and that there are contract limitations? I would be grateful for an answer on that later.

[David T. C. Davies]

Presumably, if the hon. Lady and I were fortunate enough to win the lottery, we could ask Jim Clune if we could pay for everyone to have a toll freeze. Although the matter is not devolved, there would have been nothing to stop the Welsh Conservatives doing that had they formed a Government. Sadly, they did not, but maybe next time.

[Jessica Morden]

I thank the hon. Gentleman for his intervention. Apparently the Assembly would have had to pay £29 million to Severn River Crossing. I am loth to take him up on his offer to commit to paying that if we win the lottery, just in case.

I would like the tolls to be frozen and greatly reduced when the bridges come back into public ownership in 2017. I fully support the Committee’s assertion that the toll could be reduced to a fifth of its current level to approximately £1.50, while allowing the crossings to remain self-financing. We recommend that the Government should seek to reduce the level of the toll at the earliest opportunity.

In the meantime, I want the Minister to address some of my parochial concerns. On car sharing, commuters who share a car cannot share the TAG. I was under the impression that that issue had been sorted out some years ago and dealt with by Severn River Crossing. However, it appears that it has not. Will the Minister please pursue that with the company in the interests of cutting congestion? We are urging people to car share, so we ought to be making it easier.

On off-peak tariffs for business, one issue that businesses have always raised with me, which is an extremely good point, is more flexible pricing. Effectively, off-peak travel for business would offer incentives to travel at certain times of the day and night. That would reduce congestion, save emissions and help companies at a time when they are struggling.

May I also ask the Government at some stage to examine the issue of a reduction in tolls for people who live locally? As someone said earlier, maybe that could be done on a postcode basis. Such a scheme has been introduced on the Dartford crossing. I believe that it is easier to do that on the Humber and Dartford crossings, as they have no concession. I am sure that the Minister will put me right on that if I am wrong, but in the longer term, could we look at doing that in Wales?

On the thorny issue of modern technology, I believe that one of the witnesses, who gave evidence to the Committee referred to not being able to pay by modern methods as a “mild national embarrassment”. That the issue was shown on “Gavin & Stacey” has been well-reported. I am glad that the temporary system is in place, although I believe that the permanent machines have not been installed yet. The company pledged to the Committee to do that within the first quarter of this year, so I would be most grateful for an update on progress.

Given the long, painful years it has taken to get to the stage of being able to pay by credit and debit cards, which appeared to be a fairly simply issue, may I urge the Minister to get to grips with the future of the bridge post-2017, as the hon. Member for Monmouth has mentioned? The Government response to the Committee’s report states:

“it is too early to be setting a future strategy for the Severn Crossings at this stage, including future toll prices and concessions.”

With the current Parliament due to expire in 2015, this is not an issue that can be left until another election, because businesses and commuters in my constituency need certainty.

I welcome the Department’s commitment in the Government response to provide regular updates to everybody on future strategy. I also thank members of the Committee, as one of the local MPs, for the time that they have spent on this issue. It has been a valuable exercise in providing fresh impetus to sorting out the future of the bridges.

--- Later in debate ---

[Mike Penning]

This is where I wish that I had not joined the Army at 16 but had gone to university and become a corporate lawyer. We can discuss the legalities in quite simple terms. Nothing at all can be done without the agreement of the concessionaire, so should the company decide that it does not want to do what has been suggested, that will be a fact. We are trapped in a contract; everyone knows that and the Committee examined the matter in detail.

I can see the logic of where the hon. Member for Swansea West is coming from, but the Welsh Assembly subsidising what would be the increase this year would not cause the contract to be terminated earlier, because all that would happen is that the same money would be recouped from the Assembly or whoever wanted to pay it as would be recouped from tolls. Thus the length of time would be exactly the same. I will write to the hon. Gentleman—the lawyers are probably panicking as they listen to the debate—to clarify exactly what the legal position is. However, I am certain—this is what all the advice says—that if the company that was formed specifically for this purpose does not want to play ball, there is nothing that we can do.

[Jessica Morden]

While the Minister is on the issue of the contract, does what has been said equally apply to car sharing? Would it be equally difficult to resolve the issue of being able to swap between different cars in car-sharing schemes?

[Mike Penning]

I have asked for a note, but it has not arrived. It might do—hint, hint—in the time left. I cannot understand the difference, I must admit. Clearly, car sharing is going on. It happens on the routes that go from where I used to live in Essex into London. We commend car sharing. We want people to share cars, because it reduces emissions and makes travel much more cost-effective for people. I do not understand how the concession agreement would be affected in that respect, but I am sure that the lawyers will tell me why I am wrong—as always, I am being as honest as I can.

The hon. Member for Newport East made a couple of other points earlier. I have already touched on how price freezing and tolling would work. In the Select Committee evidence session, I talked about whether there is more technology that we can use to make things much easier for the communities on both sides of the border and for industry and at the same time to sweat the asset more, as we are doing with managed motorways. In other words, are we getting the best out of the bridge? Clearly, the toll process is causing delays.

We are committed to free-flow tolling at the Dartford river crossing. We made an announcement about that in the spending round, and I made an announcement about it to the Select Committee. There are real technical issues about using automatic number plate recognition, which is what we intend to use. It is similar to what the congestion charge scheme in London uses. There is an enforcement issue, particularly in relation to overseas vehicles. We intend to get that right at Dartford before we introduce the system. However, I can see no logical reason why it could not be introduced at the Severn river crossing.

The problem, of course, is the cost and who bears it. That is what the hon. Member for Pontypridd was alluding to. Let us be honest: why would the company set up in the context of the concession agreement to make this profit say to me, “Okay, Minister, we’ll spend X million pounds doing this for you,” rather than saying, “Will you pay for it?” or “We’ll use our rights to go further in the concessionary period.”

The truth is that by the time we fully implement ANPR and free-flow technology at Dartford, we will be into 2013, not least because of the construction work that needs to be done. Doing free-flow tolling sounds simple, but it is not. Otherwise, people would be hurtling through and we would have speed issues and so on. We will not be that far away from the conclusions about what will happen post the concession. I think that the negotiations will have to include what we would expect a modern tolling system to involve in the 21st century. The issue will arise once we have rolled out the system and done everything that we need to do at Dartford. The last thing that the Select Committee would want me to do is to say yes, we’ll definitely be able to roll it out in 2015 or ’16—in the latter part of this Parliament—if we have not got it running right. I am confident that we can do that, because the technology is there.

I think that we were all sceptical when the congestion charge was introduced in London. The issue was not the rights and wrongs of it, but whether it would work. It does work. The main issue is enforcement in relation to foreign-registered vehicles. I was with representatives of Transport for London only today, working out how we can deal with that.