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10.36 pm
The Parliamentary Under-Secretary of State for Transport (Paul Clark): At the outset, I congratulate the hon. Member for Beverley and Holderness (Mr. Stuart) on securing this debate on an important issue. I ought also to take this opportunity to congratulate Members of all parties on their hard work, including the right hon. Member for East Yorkshire (Mr. Knight) and those who are sitting behind me—my hon. Friends the Members for Brigg and Goole (Mr. Cawsey), for Great Grimsby (Mr. Mitchell), for Kingston upon Hull, North (Ms Johnson) and for Cleethorpes (Shona McIsaac) and my right hon. Friend the Member for Scunthorpe (Mr. Morley). I congratulate them on the work that they have been doing on this matter, which is dear to their hearts, on behalf of their constituents.
I shall set out a brief history of the development of the bridge, which is an important link between parts of the city region. Perhaps it can be seen as bringing it together rather than dividing it. The Humber bridge was promoted as a local road by the local authorities of Humberside. Approval for the construction of the suspension bridge was given by the then Transport Minister, Barbara Castle, although it was not until 1973 that work finally began. Right hon. and hon. Members will know that the running of the bridge is undertaken by its board, which is made up of the local authorities that promoted the project—Hull city council, East Riding of Yorkshire council, North Lincolnshire council and Lincolnshire county council. The board is made of up 22 members from those authorities. It financed the construction through loans from the Secretary of State for Transport and the Public Works Loans Board.
As the hon. Member for Beverley and Holderness said, the bridge took longer and cost more to build than was expected. However, the amount of traffic was lower than forecast because the expected population growth on the south side of the Humber never materialised. The original cost was some £28 million, increasing to £98 million throughout the construction period, with price inflation caused especially by the ground conditions that were encountered. The Humber bridge board charges tolls to cover that debt.
By the time the bridge was open to traffic in 1981, loans were charged at a rate of 11.62 per cent. compared with the Bank of England rate of some 15 per cent.; many of us remember those awful times. Every year since opening, the bridge has made an operating profit. However, initially, that was not sufficient to cover the loan charges.
As the hon. Gentleman recognised, the Government have done more to assist with the finances of the Humber bridge. The debt was restructured in 1998, when a reduced interest rate of 7.75 per cent. was set, with interest suspended on part of the total debt. The Humber bridge debt, which then amounted to £421 million—£359 million of which was owed to the Secretary of State, and £62 million to the Public Works Loan Board—was restructured. Indeed, we wrote off the £62 million that was owed to the Public Works Loan Board, and we suspended interest payments on £240 million of the debt that was owed to the Secretary of State. We also reduced the interest rate on the active part of the debt. The suspended debt was added back, beginning in the next financial year, in annual amounts, starting at £11 million and rising by 4 per cent. per annum to reintegrate it all. Those arrangements were set out in the 1998 loan agreement and the Humber Bridge (Debts) Act 1996.
In 2007, we again revised the interest rate on the debt to reflect more closely the rates that prevailed then, and to allow the Humber bridge board to repay the debt in the agreed loan period—until 2038—without recourse to levying a precept on taxpayers. Such recourse would mean that, ultimately, the taxpayers of Humberside would have to pay the debt, as set out in legislation. The interest rate was reduced to 4.25 per cent. until 2011, when the matter will be reviewed.
The money saved through lower interest and the repackaging that we introduced in the latest development in 2007 is available to the Humber bridge board to repay capital and establish a maintenance fund. Under the remit of the agreement, the board is expected to manage the financial position until 2011, without recourse to the Department for Transport. That clearly sets out the steps that the Government have taken and the listening that we have done about the issues that must be faced. We have done that in dialogue with the Humber bridge board and through listening to hon. Members who have made representations about the financial position.
The Secretary of State’s role in relation to the bridge is restricted to approving or rejecting the proposed revision of tolls by the bridge board. As hon. Members know, there is an ongoing application to revise the tolls. That includes increasing toll charges from £2.70 to £2.90 for cars, from £4.90 to £5.30 for goods vehicles under 7.5 tonnes, and from £10.90 to £11.90 for goods vehicles that exceed 7.5 tonnes.
The application is to be considered at a public inquiry. After listening and taking on board the representations made through several channels, including the No. 10 website, calling on the Government to cancel the Humber bridge debt and reduce the tolls, a public inquiry will begin on 3 March at the Willerby Manor hotel in East Yorkshire. Let me put it on record that the location of the inquiry is a matter for the board, which has made its decision, not the Government. The hon. Gentleman’s website suggests that the Government refused to hold a public inquiry on the south side of the river. He knows that it is not a matter for the Government.
Mr. Stuart: The Minister might be feeling combative, but let me share with him the fact that at least the Humber bridge board was listening and has agreed to waive the crossing costs of those who come from the south bank. I congratulate the board on listening to our campaign to make that happen.
Paul Clark: Absolutely. Indeed, I noted that the bridge board had listened, which shows not only that are the Government listening, but that the bridge board is listening too. I am pleased that the hon. Gentleman and I can agree on that point. The Secretary of State must await the inspector’s recommendations before deciding whether to approve the proposed increase.
Mr. Elliot Morley (Scunthorpe) (Lab): The bridge board itself has proposed a £1 toll, which would certainly cover the maintenance of the bridge. I listened carefully to what my hon. Friend said about what the Government can and cannot do in relation to the inquiry, but the board’s proposal strikes me as a perfectly reasonable suggestion, because it would deal with the argument about whether reducing the tolls would increase the income. The idea sounds to me like an experiment well worth conducting, which would produce results from which the Government could draw conclusions.
Paul Clark: I hear what my right hon. Friend is saying. Let me make it clear that the issue before the public inquiry that will start next week is raising the tolls, by the amounts that I have specified. A number of hon. Members have referred to a £1 toll, but the Government have received no specifics about that proposal for us to consider. We have not been approached by the Humber bridge board on the specifics of the £1 proposal—and if we are thinking logically, we know that the public inquiry will look into the specifics of increasing the fees, as the hon. Member for Beverley and Holderness and I have set out.
Shona McIsaac: My hon. Friend has heard from all MPs from the area tonight, but it is important to get an idea of the time scale. The right hon. Member for East Yorkshire (Mr. Knight) mentioned the meeting that has been promised. Obviously we all appreciate that the Minister cannot act until the inquiry has reported and is out of the way, and that the Secretary of State has to make a decision, but when can we expect that decision, so that we can move forward?
Paul Clark: Obviously the timing of the report, written by the inspector, is a matter for the inspector, but my hon. Friend is right that we have to await that report, and the Secretary of State will then make a final decision whether to approve the proposed increases.
It has been the policy of all Governments since 1945 that estuarial crossings should be paid for by the user rather than the taxpayer, because of the substantial savings covered. I hear the demands to write off debt and do away with tolls, but there are many competing demands, in terms of transport requirements, trains, bus subsidies and fare subsidies, that have to be met. I therefore urge hon. Members to await the outcome of the public inquiry. I am also willing to reaffirm my previous offer to have a meeting with all interested parties at a convenient time.
10.49 pm
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