The Severn Crossings Toll - Welsh Affairs Committee Contents

Examination of Witnesses (Questions 274-330)



Q274   Chair: Good morning, gentlemen. Thank you very much indeed for coming up today. I know that some of us have met before but, for the record, I am David Davies, Chair of the Welsh Affairs Select Committee. I just wondered if you could also introduce yourselves and then we will start the session. There is no need to stand up. That is absolutely fine. In fact the microphone picks up better when you are not standing.

Councillor John Warman: Thanks very much, first of all, Mr Chairman, for inviting me along today to speak about the Severn tolls. May I first of all say that I am the organiser for CAST—the Campaign Against Severn Tolls.

What I would like to say today is basically the principle that, as an organisation, we are totally against the tolls on the Severn Bridges. We feel that, as an organisation, it spells out disaster for the business and economy in Wales. It also affects the south-west of England as well. It means that private motorists have to dig deeper into their pockets every year and the tolls, as far as we are concerned as an organisation, are nothing more than a tax on entering Wales.

Q275   Chair: Okay, thank you very much, Mr Warman. Don't worry, we will come back to you. We are going to do a question-and-answer session and we very much appreciate you coming up here today. It will be a fairly straightforward question-and-answer session but I will just go through and ask the others, if I may, to introduce themselves.

Rick Longford: I am Rick Longford and I am the Economic Development Manager for Monmouthshire County Council.

John McGoldrick: I am John McGoldrick and I am the Coordinator for the National Alliance Against Tolls.

Q276   Chair: Thank you all very much indeed for coming along. Can I start the questioning by asking about the Aberystwyth University report into tolling which suggested that for most SMEs the impact of the tolls was not substantial? How would you feel about that? Perhaps I could ask Mr Warman first.

Councillor John Warman: Well, I don't agree with that, Mr Chairman. I think that it is a huge burden on business and I have received a lot of communication and comments from the haulage industry in Wales to say how much of a burden it is on their business. I can also tell the Committee here today that I have had a number of private conversations with people who have been involved with companies at boardroom level who wanted to set up business in Wales.

Q277   Chair: Could you name any of these companies, Mr Warman?

Councillor John Warman: I'm sorry, I'm not in a position to do that, Mr Chairman, because some of that was expressed to me in a confidential nature, but what they did say was the fact that when it was discussed at boardroom level with companies one of the issues that was brought up was the cost of how much it would be in tolls for setting up in Wales as an extra burden and therefore they decided not to set up in Wales but other areas. So that is an indication, an example, I feel, of how far it is hitting business and the economy in Wales.

Q278   Chair: Thank you, Mr Warman.

Rick Longford: Thank you, Chair. I have only just had a chance to see the report. I only had it sent to me yesterday so I've had a quick read through. It is interesting to note in the report that it relates that the ones that are having difficulties are those business sectors which are particularly related to transport, such as the haulage businesses and those involved with warehousing. Obviously, in Monmouthshire, warehousing is a particularly important industry on the M4 corridor in the areas of Chepstow and Magor. So I can see that in our location that would probably have a greater impact. However, as you move further away from the bridges then probably that impact goes away.

Q279   Chair: Mr Longford, am I right in thinking that tourism is actually one of the biggest employment industries in Monmouthshire?

Rick Longford: In one sector, yes. It employs round about 10 or 11% of the employees within the Monmouthshire economy. So it is a significant sector for us in terms of that.

Q280   Chair: Is it the view of the Council that the level of tolls is having an impact on that particular sector, if not on SMEs in general?

Rick Longford: There are some tourist businesses which are directly affected, particularly, I suppose, again those close to the Wye Valley. I have had a report from the tourist business in the Wye Valley about how they have seen the perception of that tourism business drop because of tolls. I think, particularly when we look at one-off events such as the Abergavenny Food Festival, we would see, potentially, tourists coming to the Abergavenny area from the Bristol area who may well be—what's the word?—deterred from coming because the toll is then a significant element of the tourist sector.

Q281   Chair: I am going to bring in Geraint Davies now. I think I should just say, with absolute respect, that we have had a nice little preamble there but, because of the number of questions we've got, I'm going to ask everyone, including reminding myself, that both the questions and answers need to be fairly short and snappy if possible.

Rick Longford: Okay.

Q282   Geraint Davies: May I ask Mr Longford how reliable he thinks the Aberystwyth study is, in particular because it, and indeed the Welsh Assembly study, focused on the users of the bridge and how much they used it according to the toll as opposed to, for instance, a small builder who might be in Monmouth who would, if there was no toll, go over to Bristol and get some work putting up a roof but simply cannot afford to go back and forth and never tries for that?

Secondly, there is the category of business that says, "Okay, we'll locate in Bristol because most of the market is on that side of the Severn", and that's it. It is a one-off decision. Occasionally, they will trip over to Wales, but if that toll had not been there they might have located in Wales. Do you think those sorts of examples are not really adequately picked up in the Aberystwyth study in terms of the negativity of the tolls on the Welsh economy?

Rick Longford: Yes, I think so. I think, first, that the sample size was relatively small in relation to what the study undertook and obviously it is covering a wide area. So, yes, I think the study needs to be expanded or needs to be developed, particularly in the area of actually questioning the users of the bridge as well rather than the businesses, because I think the business users of the bridge may well have a different viewpoint.

Q283   Geraint Davies: Can I ask Mr Warman and Mr McGoldrick whether they have any anecdotal evidence of builders or any other people based in Wales who don't get business across the bridge because of the toll, or of businesses who have simply relocated?

Councillor John Warman: I feel that for businesses, especially at this time of an economic downturn as well, it is a huge burden and some businesses are going to move outside Wales. Also, the disincentive of that extra cost of the money mounting up in a year for the haulage costs must be a consideration for a lot of companies and there is evidence to say about that. Can I also say that I've also had a number of calls from people, holidaymakers, who told me to say that, if they were not paying the £5.50 or whatever vehicle is out there, that would be going into the pocket of a shopkeeper in Wales. I am just giving an example of the extra money that would be paid.

Q284   Chair: Mr McGoldrick?

John McGoldrick: Well, first of all, I should briefly say that I have not seen the FSB research. I'm not sure that it has been available to the public. My understanding is that it is just based on a telephone survey and it is not much more than that.

The other research in other parts of the country that has taken place has come to a different conclusion. It has come to the conclusion that tolls do have a significant effect on a lot of businesses. Both the businesses that are there and the businesses that are potentially there are discouraged from setting up in that area because of the toll.

As somebody said before, obviously there is also an effect on tourism, which is more difficult to assess because you can't ring tourists up and say, "Are you going to go here or there because of tolls?", although everybody is probably aware that with things like sat navs or if you go on to things like AA Route Finder you will see that one of the options is to avoid tolls, which implies that there is a significant number of people who will avoid tolls if they can.

Q285   Jessica Morden: This is just a quick question for Mr Longford. Did you have any evidence when Tesco decided to relocate from Chepstow over the bridge that the bridge tolls were part of that decision?

Rick Longford: There was no evidence that they used in any of their publications on why they moved, but I have to say it is curious that their excuse for moving was that they had not got a big enough premises in Newhouse and they could be provided on that. Neither Monmouthshire County Council, myself nor any of my colleagues were ever asked to try to find a larger site for Tesco on this side. So when one looks at that and suggests that potentially with 140 stores or so in the south and south-west served by an Avonmouth facility as opposed to 45 or so in the South Wales area, the economics of £16.70 of toll every day for 50 to 100 lorries is quite an argument.

Q286   Jonathan Edwards: Good morning. What evidence is there that tolls have diverted traffic away from the M4 on to less suitable roads, and there are particular problems maybe in Chepstow and Gloucester?

Rick Longford: There is no specific evidence as such. I do not think there is anything else. There is a lot of anecdotal evidence, or perceived evidence particularly, that because of the toll regime—that you only pay to get into Wales and not out—any traffic going out and doing the Gloucester run may well go out over the Severn crossings and then come back through Chepstow. It has been perceived that Hardwick Hill in Chepstow particularly is an area where it suffers from significant heavy traffic.

Q287   Jonathan Edwards: Do you accept that tolling regimes and road pricing schemes are a positive tool for raising revenues, especially for transport infrastructure, even if, after the concessionary period comes to an end, there are to be maintenance costs and operational costs to consider which would need a toll of some sort?

Rick Longford: I am not in an area to be able to express a real view in relation to that. I have no evidence, but one would suspect that the actual bridges are vital to the Monmouthshire economy. Therefore any reduction in maintenance and therefore potential closure would be detrimental to the Monmouthshire economy.

Q288   Chair: Would both the other gentlemen agree with that—yes or no on that one? Would you accept that there has to be at least a toll in place to maintain the infrastructure?

John McGoldrick: No, definitely not. 99.99% of roads and river crossings are not tolled. To suggest that you need a toll to maintain it is ridiculous. The Government takes £1 billion a week from drivers and about one-seventh is put back into the roads. The suggestion that for, I don't know, say, the £20 million maybe it costs to maintain the Severn Bridges you need to put in a toll, stop the drivers and demand money from them otherwise the bridge is going to fall down is, in my view, nonsense.

Q289   Chair: Mr Warman?

Councillor John Warman: I know that there is a lot of traffic that misses the Severn to go the other way to miss the tolls. It can cause quite a problem, as I understand it, through some of the villages where they go through. I have not got any facts or figures, but I know definitely it does happen. From the nature of my work, I work in Wales quite often so I can see it.

Q290   Chair: What is it you do, Mr Warman?

Councillor John Warman: Sorry?

Q291   Chair: When you are not campaigning against tolls, what is it that you do?

Councillor John Warman: What do I do?

Chair: Yes.

Councillor John Warman: I am a researcher.

Chair: That is fine.

Q292   Owen Smith: Good morning, gentlemen. This is a very quick question to Mr Longford. Have you got any specific examples of investment decisions that have been explained to the Council as not being taken, companies not moving to Wales or relocating from Wales as a result of the bridge?

Rick Longford: I have no specific examples that I can give you of that because that decision—it is usually a multiplicity of activity which prevents people coming in, in decisions. So I have not got any specific ones in writing.

Q293   Owen Smith: Given that, and I think we can all see that there seems to be a lack of empiric evidence about this one way or the other, is the Council's view none the less that you think the bridge is a problem, in terms of the costs of the tolling, in terms of investment in the county, or not?

Rick Longford: Yes, I think it is our view that the tolls are a problem. The high value of the tolls as well is a problem. They are perceived, from a tourist and business point of view, to be a tax on entering Wales. It is perceived that, as you come over the bridge, you then have to pay to enter Wales. You don't have to pay to enter England; you have to pay to enter Wales. So, again, there is a deterrent there.

Q294   Owen Smith: Would that perception be alleviated if the tolling was both ways?

Rick Longford: It could be, but again that may well cause a delay going out of Wales. You would have two sets of delays which also would be a potential problem. I think it is the high rate of the toll which is the particular problem. We have lived with tolls for a long time so we accept that the tolls are there, but it is the high rate that is the problem.

Q295   Chair: Mr Longford, just before I bring in Alun Cairns, I have heard this a lot—that you have to pay to get into Wales but not into England—but if you put the tolls on the other way, surely the same people, and I am one of them, would complain, "You have to pay to get into England but Wales is free"? Does it really make that much difference? Wouldn't there be complaints wherever you put the tolls?

Rick Longford: There could well be, but I think from a tourism perspective we are trying to attract tourists into Wales from the England area and from that point of view it is seen as a negative.

John McGoldrick: Can I just say that, generally speaking, with the tolls around Britain or where there have been tolls, one side of the crossing is generally regarded as the wrong side of the tracks. It does not really matter too much, as you said, which side the toll collection point is on. One side will be perceived as being poorer than the other side.

Q296   Alun Cairns: Can I pursue some of the questions that Mr Smith followed, Mr Longford, in terms of the question that asked whether businesses had purposely not located in Monmouthshire because of the tolls and whether they went the other side of the border or the other side of the Severn Bridge? I am familiar with one organisation that took that into account and chose to go to the Aztec Centre—the Aztec Business Park on the English side of the crossing. That is involved in distribution.

Now, we have also spoken about Tesco already. Are you aware of a disproportionate make-up of firms such as that involved in transport and haulage the other side of the Severn Bridge so that that would potentially indicate, well, it's quite obvious that X number of companies have gone there rather than coming to the Welsh side?

Rick Longford: Again, I am not aware of any specific companies who have turned around to us and said, "The tolls are the reason that we are not coming."

Q297   Alun Cairns: No, but I'm asking about the companies that are established. Has any comparison been made or do you think there is merit in comparing the make-up of the companies, say, in the Aztec Centre and other business parks around there in comparison with those facilities where there are pretty near identical facilities on the Monmouthshire side of the border?

Rick Longford: It would be useful to do that sort of work. I am not aware of any work that has been done in relation to that.

Q298   Chair: Just before I bring in Jessica Morden, Mr Longford, can I ask you a specific question? If there were no tolls on the Severn Bridge, wouldn't that have an impact on shops in Chepstow, because at the moment there is already a lot of competition with Cribbs Causeway? Is it not the case that we are actually keeping money in Wales by keeping a toll there as well as perhaps some of the disadvantages that we are both well aware of?

Rick Longford: I think it could be argued that that is the case, but I also think that the reciprocal is also the case where Chepstow is an attractive, historic market town which could well pull people from the Bristol area back to that area as well.

Q299   Jessica Morden: Do you think there is a joined-up plan for tolling across the UK?

John McGoldrick: Well, obviously not. There aren't any tolls in Northern Ireland and there haven't been for over 100 years. There are no tolls in Scotland. In most parts of England and Wales there aren't any tolls. I live on Merseyside. If I want to go into North Wales from where I live on the Wirral, I don't have to pay a toll to cross the Dee. If I then go across the Conwy on the bridge or under the tunnel, I don't have to pay a toll. Obviously, tolls are very haphazard, and if there is any rule at all it is basically what the authorities can get away with. In other words, in the areas where there is the least choice to avoid the toll you are more likely to get a toll.

Q300   Jessica Morden: Would anyone else like to comment?

Councillor John Warman: Yes. May I say that my organisation is against tolls anyway? I just want to remind you, Members, if you were to speak to your constituents, I think they'd all tell you, "Where's all the money going that we are paying in road tax anyway? It's not all being spent on the highways as it should be anyway. So why should we be paying tolls on top?"

Q301   Owen Smith: To the gentlemen who are anti-tolls, just to understand the rationale of your organisations, is it then that you are opposed to tolls full stop because you feel that other means of taxation such as road tax ought to be allowing for the maintenance of bridges and roads that are currently tolled?

John McGoldrick: Well, in brief, the mantra that we used to have, which would take a while to explain, is that basically we believe the tolls are unfair, unwanted and uneconomic. That they are unwanted has been demonstrated on numerous occasions. The most successful petition on the 10 Downing Street website was the petition against road pricing, which is basically road tolls, which got nearly 2 million signatures. The only two local polls that have taken place on the question in Edinburgh and Manchester massively defeated the idea of congestion charging. The western extension of the London Congestion Charge Zone is due to be removed after Christmas because of the widespread opposition to that. Almost every independent survey which has taken place indicates that people don't like tolls.

They are also completely uneconomic. Tolled operations cost more to construct, cost more to operate—sorry, the Chair is interrupting me. I'm sorry for getting carried away.

Chair: And why not, but I have to try and get through all the questions.

Q302   Owen Smith: So there is never an example, you think, even in the straitened economic times we have right now, of the need for some sort of PFI deals that we had with this instance, or some other means of financing that results in tolls? You think it's always going to be unjustified?

John McGoldrick: Well, even if you were going to have a toll operation, PFI is the most expensive way of doing it. It probably doubles the cost for various reasons which I won't go into. If you are going to build a new road or a crossing, it should be judged on economic terms. Is this needed? Is it going to contribute to the bottom line of UK plc? If that is the case, then it should be built. If it is not the case, it shouldn't be built. But it should be financed out of road taxes and not out of a specific charge.

Q303   Chair: I think Mr Warman was trying to come in there on that as well. Is that right? Did I misinterpret that?

Councillor John Warman: I think the general principle of toll charging is not something that the public support from my feedback or the positive responses I have had since this organisation has started. From the feedback I get, the majority of people have said, "We are paying our road taxes", and this principle of going out trying to expand the toll charges and introducing more is just a non-starter as far as they are concerned. It is just a way of getting more money out of the hard-pressed motorist already.

Q304   Chair: Very briefly, how many members are in your organisation?

Councillor John Warman: I can't give you an actual figure, Mr Chairman, because I have never counted them, but I get a lot of support from members who contact me by the internet, by the web, and people who write to me. Can I just say that I can't give you a figure on everybody who is a member, but I get a lot of public support as well from people who know of me.

Q305   Chair: That's fine. I'm just trying to get a feel. Mr McGoldrick?

John McGoldrick: We don't have a formal membership. Basically, we are an alliance. Obviously, the individual groups have members, although most of those are fairly informal. One group nominally has a membership of 5,000.

Q306   Guto Bebb: Just on the question of tolling, it is quite clear that you are opposed to tolling, full stop, Mr McGoldrick.

John McGoldrick: Yes.

Q307   Guto Bebb: You make the point obviously that the amount spent on roads is about £7 billion compared to about £52 billion raised because you used the figure of £1 billion a week, but in the UK we have never had actually had a system where taxes are dedicated for a particular purpose. Are you arguing that the £52 billion should be spent on roads?

John McGoldrick: No. It would be very nice if it was and the country might be better off. I think people in general would be better off if we had more bypasses round villages and so on. The point is that there is a vast profit. To overcharge by about seven times and then to demand a supplementary fee is, in our view, unfair. It is also completely uneconomic. To a certain extent the Committee so far has been asking about the effect on individual businesses, but one of the recent studies that was done by Colin Buchanan on the Humber Bridge looked at it from a completely different way. As I mentioned in our evidence, they looked at what are called agglomeration effects, which basically is the idea that the bigger your market is, the more efficient it is. If you have a river and you put a crossing across it, you increase the agglomeration effects. If you put a toll on it, you reduce those effects. In the case of the Humber Bridge, their assessment was that if the tolls were removed there would be an economic gain of £1 billion.

Chair: That is quite interesting. I understand the general point, but I just want to bring in Mr Davies very quickly.

Q308   Geraint Davies: On that point actually, would you accept that the bridge, in essence, is a gateway into the South Wales economy for inward investment and trade and as such the tolls are a squeeze on that gateway? We have had people coming here, in particular Ieuan Wyn Jones, who said there may be an argument that some of that toll should be used for new transport systems in Wales and therefore there should be a toll.

But wouldn't you accept that, if, for example, there was a proposal which put a toll on the M6 so that the people of Manchester could have a few more buses, there would be an outcry? Hold on, why should we have these arbitrary tolls and messing around with the system when, in essence, what we are stopping is trade for South Wales or whatever region, and the case for tolls isn't made at all?

John McGoldrick: Of course what you have just said virtually happened anyway. With the Manchester Congestion Charge proposal, the Outer Ring of it was the motorway going around Manchester where you would have had to pay a toll if you went along it or you crossed it. The vote there, in the Greater Manchester area, was 4 to 1 against for a variety of reasons. Most people believed that it would harm businesses inside the toll cones.

Q309   Geraint Davies: Mr Longford?

Rick Longford: I think the situation would be that, if you wanted to put a toll on the Severn Bridge and it had not existed before and then you decide to impose it, there would be a much greater outcry than there is against the tolls as they exist at the moment.

Q310   Karen Lumley: I see that you talked about the Humber Bridge. Do you think that the pricing on the Severn crossing and the Humber Bridge has been treated differently by the Government?

John McGoldrick: There are 20-odd toll crossings around the country and each one, to a certain extent, is open to a different regime. The Humber and the Severn are similar in so far as they are the joint highest tolls in the country, but they have a different mechanism for increasing the tolls on the Severn; it goes up automatically. On the Humber, they have to apply for Government permission.

The other main difference is that the Humber has had a massive subsidy from the Government over the years. They have had about £500 million in subsidies because the losses on the bridge were so great that something like £320 million of debt was written off. They have had interest subsidies which are worth about another £200 million; in other words, most of the debt they did not have to pay interest on. They still feel aggrieved that they have to pay the toll, but they have received, compared with the rest of the country, a massive subsidy of about £500 million.

Q311   Karen Lumley: Which is not available to the Severn crossing at all, is it, so actually we are losing out there?

John McGoldrick: It is not available to Severn and it is not available everywhere else. It is because the tolling obviously discourages use of the crossing. On the Humber Bridge it discouraged it, and other factors as well, to the extent that it was perpetually in the red. Obviously, beyond certain points, if you keep on putting the tolls up, which they could have done legally, then it is going to be a case of diminishing returns. If you double the toll, you might not even get the amount of toll income that you get at the moment.

Q312   Chair: Just before I bring in Alun Cairns to ask about the methods of toll payment, could I ask a quick question to Mr McGoldrick and Mr Warman—it is really a yes or no—and perhaps Mr Longford as well? Would you all accept that it is better to have the bridge with a toll than no bridge and no toll?

Rick Longford: I would answer yes.

Q313   Chair: Mr Warman?

Councillor John Warman: Mr Chairman, I think on the issue of the tolls, the charges and the card that is coming in, we are still totally opposed to the toll charge. The card that is coming in is going to be more of a convenience, but I've got to say that there's total confusion.

Q314   Chair: What do you say then—yes? Is that a no? It strikes me that you are probably so against the principle of any toll that you would probably rather not have had the bridge. What about you, Mr McGoldrick? What do you think?

John McGoldrick: If you look at the amount of traffic that goes across the Severn crossing, if they had removed the toll on the first crossing, then in theory, based on normal traffic flows, they should have been able to cope without building the second crossing.

Chair: Right.

Q315   Alun Cairns: Can I talk about the toll payment methods? Do you think that the method of payment at the moment is sufficiently wide in terms of its convenience and in terms of speed, Mr Longford?

Rick Longford: No, I don't think it is. We have suffered under a long period of time now that you can only pay by cash or there is a TAG system as well, which has a detriment particularly. It was pointed out by Peter Cole in a recent study from Capital Region Tourism that this method of using cash is alien now to a lot of people who are now using cashless systems. The bridge seems to be a long way behind what it needs to be.

There has been a move to introduce cards for the Ryder Cup, but as soon as the Ryder Cup was finished that was then taken away again. I believe they have tried to reintroduce it. It was due to be reintroduced in the current few days, I believe, but I'm not sure whether it actually has. We need to move to something more sophisticated such as the Inner London Congestion Charge technique of recording people who are crossing the bridge so that people don't actually have to stop. That stopping creates an environmental problem at the tolls with vehicles then having to start up again. If they could go through a toll booth without actually stopping, then that would be a great incentive as well.

Q316   Alun Cairns: Thank you. You have covered most of the issues that I wanted to cover, but something I want to close down on is, do you think it is acceptable, is it confusing, and were you made aware of, the introduction, the withdrawal and the reintroduction of tolling? In the answer that you gave earlier, you said, "I'm not sure where we are now." Do you think it is acceptable as the authority that would have an impact in that area that you don't know where we are?

Rick Longford: I don't think it is acceptable that we don't know where we are. We have no communication really with Severn River Crossing plc at all. They don't give us any information in relation to tolling or tolling techniques.

Alun Cairns: I agree. Thank you.

Q317   Owen Smith: Do you know whether they have reintroduced it? They were meant to reintroduce it last Friday.

Rick Longford: I actually don't know, I'm afraid. I did come over the bridge on Sunday and I didn't see any method at that time, but perhaps I didn't go to the right toll booth.

Q318   Jonathan Edwards: In terms of the evidence we had from Severn River Crossing plc last week, they said that there would be no movement in terms of moving ahead with a more modern system for recording until the end of the concession period because it was not worth their while. It seemed that the decision therefore was, do we extend the franchise and perhaps move ahead with a more modern system for collecting the tolls, or do we move towards public ownership as soon as possible so that we can reduce the tolls? Given the two counter weighting choices there, which would be the preference of the local authority?

Rick Longford: That's a difficult one. I'm surprised at that reaction that you had from Severn River Crossing plc—that they were not prepared to look at new technology, because if they would introduce that they could then reduce their operating costs. As their operating costs are taken away from the receipt to get this figure that they need, then surely there would be a big advantage to doing that. I am just totally surprised at their reaction.

Q319   Jonathan Edwards: I think their argument was that the capital costs of moving the toll booths, etc. would be prohibitive—

Rick Longford: I think they are making a significant profit out of the bridge as it is and I wouldn't have thought that that was a major problem.

Q320   Owen Smith: On that question about profits, one of the things we are wrestling with in the Committee is the nature of the deals being struck and the nature of the financial arrangements. They are actually quite opaque. They tell us that it is impossible to determine how much profit they are making right now and how much profit they will make at the end of the scheme. You are implying that your impression, looking at it, is that it is a profitable business and therefore they should be investing?

Rick Longford: Yes, I have looked at the report that was put to the National Assembly for Wales in June 2010. At the back of that, there is the annual tolling income. Looking at those sorts of figures, you wonder why. They are taking £77 million a year. Their cost of sales, which is their operation, is £10 million. The cost of operations/repairs—this is for 2008, by the way—was only £4.24 million. I don't think they are spending an awful lot of that £77 million.

Q321   Owen Smith: What about when we revert to public ownership of the bridge? Do you think the tolling regime should remain or do you think it should be reduced, and if it should be reduced is there an optimal bearable toll level or should it be reduced to the absolute minimum?

Rick Longford: That's a difficult question, I suppose, for me. I think that the people of Monmouthshire and those that use the bridge would obviously like to see no tolls for the reasons that have been discussed in this meeting now. I am also concerned, as I said earlier, that the bridges are vital to the Monmouthshire economy, that, if, for instance, there were no tolls and therefore no income, does that mean that the first crossing, which is obviously having significant costs of keeping it open, would be closed, because you have another bridge so you don't need that one? So there is a question there. I think that we do need to see a reduction in those tolls. The tolling regime has been 10p on every year irrespective really of the RPI, and I think that's another area—

Q322   Chair: That is an important point that you have just raised. Have MCC got any concerns that the first bridge might close at some point because of maintenance costs?

Rick Longford: We have got no evidence to put it that way, but with the reports recently that the main cables for the first crossing are in need of serious repair or replacement that obviously is a huge cost and there could be decisions being made about that.

Chair: We have been given the impression that that work is being done, but that is a good point. Thank you for that.

Q323   Karen Lumley: During the Ryder Cup when these machines were in use, was there any anecdotal evidence that they took longer to use or how long they were taking to use?

Rick Longford: We have not had any reports back on that so I am not aware of any information relating to that.

Q324   Guto Bebb: I'm sorry, Mr Longford, but I'm coming back to you again, I'm afraid. In terms of the comments that you made about the profitability of the bridge, obviously that is refuted by the Severn River Crossing companies, who argue that when you look at their accounts you obviously have to take into account all the financing costs. So, in effect, your argument is almost an argument against PFI projects per se, because if you strip out of their financial records the issue of financing costs then obviously they are quite profitable. But if you look at the real world scenario where they do have to pay back the money they borrowed in order to build the bridge in the first instance, then obviously they don't make those profits that you claim. Is it your assertion therefore that PFI is a bad thing?

Rick Longford: I wouldn't be able to comment on that, I'm afraid. I can only go on the figures that I have from that report which suggests to me that that is the situation, that they are making a profit. I'm sure they are making a profit as a company because they are a private company. They are there to make a profit.

Q325   Guto Bebb: Because their year-on-year accounts have shown losses on occasion as well.

Rick Longford: I'm not aware of those and not had that information.

Q326   Guto Bebb: I just wanted to clarify that. Maybe you have a comment on PFI in general because you did state in passing that you had concerns about PFI as a concept.

John McGoldrick: It would take a long time to go into that. Just touching on the profits the company makes, the problem that the company have is that they must look over the life of the concession and basically whether they make a profit or not under the concession depends on how quickly the traffic flows build up. The sooner they reach this £1 billion at 1989 prices, the more likely they are to make a profit. If you look at their last published accounts in 2009, they made a profit before tax of £14 million. That was not necessarily typical, but on that they paid £10 million to the Government. So indirectly the toll payers paid £10 million in tax to the Government. Also, as the Committee will be aware, they are paying VAT to the Government, which the Government is keeping, which I estimate was probably about £15 million. So, in 2009, the Government took £25 million out of the money that would otherwise have been available to pay off the debt.

Q327   Geraint Davies: On that point really, do you feel that the construction of the concession is such that the incentive of the Severn River Crossing company is simply now to take the money and not invest? That was said to us—that they have got no incentive to invest in modernisation before 2017. All they are really trying to do is to take what money they can, basically pay off the debt and make some money within the time constraint and the revenue constraint of the concession. Do you think there is an inherent problem there for a consumer?

Chair: Mr Warman?

Councillor John Warman: Yes, I just wanted to say about PFI, actually, that I think it is just a quick fix myself. It is an easy solution. You get it today; you have to pay for it later on. It comes back, and it is becoming a huge problem. I think the public outside would have said about the Severn Bridge, "Why wasn't that paid for out of taxes anyway when the money should have been put there for it." The money was there, but it was just an easy fix, and I think that problem of PFI is going to come back to haunt us.

Q328   Geraint Davies: Has Mr McGoldrick got an answer to my question because he started, and Mr Longford?

John McGoldrick: Sorry, could you just quickly repeat the question?

Q329   Geraint Davies: Do you believe that the structure of the concession basically means that no money is reinvested in modernisation and the money is just taken, as you have already said, by the Government?

John McGoldrick: Obviously, it depends on the points. The closer you get to the end of the maximum period of the concession, which is 30 years, the less incentive there is to invest, although they are obviously obliged to keep the bridge in good repair. The main incentive for the company is just somehow or other to maximise traffic as best they can and to reach this £1 billion target as soon as they can rather than anything else.

Q330   Geraint Davies: But they haven't invested in credit cards or new systems, like the Congestion Charge systems we have here. They are just saying that it is not worth their while and they are just taking the money they can.

John McGoldrick: Congestion charge systems using cameras, etc. are very expensive. With the London Congestion Charge, the administration cost is about £4.50 per vehicle per day.

Chair: That is a very interesting point. I am ever so sorry, but we have the Minister waiting outside and we have to start at 11.15 promptly. So I would like to thank you all very much indeed for coming.

John McGoldrick: Thank you.

Chair: We shall let you have a copy of the report when it is done.

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