Conclusions and recommendations
Impact of the Toll on the Welsh Economy
1. The
Severn Crossings provide a key link in Wales' transport and economic
infrastructure. We note that successive Governments have never
undertaken a study of the economic and social impact of the Severn
Crossings toll charges. There is therefore no quantitative evidence
as to the effect of the toll on the economy of Wales. (Paragraph
35)
2. We recognise the
concerns of business about the impact of the high cost of the
toll. Some businesses argue that the toll represents a barrier
to business activity across the bridge, hampering the development
of Welsh businesses and acting as a deterrent to inward investment
into the country. In particular, it was argued that the toll has
a significant effect on the transport and logistics sector and
on the tourism industry. However, no firm conclusion can be drawn
without a comprehensive study to evaluate the impact of the toll.
(Paragraph 36)
3. We welcome the
Economic Impact Study commissioned by the Welsh Assembly Government.
To ensure that it captures the full picture, the study should
examine not only the elasticity of demand amongst current users,
but also seek the views of companies in Wales who argue it is
not financially worth their while seeking work in England. We
also recommend that the study includes companies that have located
on the English side of the crossings and ascertain the extent
to which their decision was influenced by the level of the toll.
(Paragraph 37)
4. We welcome the
Department for Transport's commitment to consider the findings
of the survey commissioned by the Welsh Assembly Government. We
look forward in due cause to debating the Government Response
to this Committee's Report on the floor of the House. (Paragraph
38)
The Severn Crossings under the Concession Agreement
5. We
welcome the introduction of a facility to make payment of the
Severn Crossings toll by credit cards; albeit many years after
it should have. The Severn Crossings are a gateway into Wales
and provide a first impression to many travellers. For too long,
the first impression of visitors was this antiquated system. This
unacceptable situation went on too long. The introduction of a
contemporary payment method is essential and not before time.
(Paragraph 61)
6. We are disappointed
that a permanent system is not yet in place. Severn River Crossing
Plc maintain that a permanent system will be installed and active
by the end of the first quarter of 2011 at the latest. The public
must be informed of developments and the system must be available
in as many toll plazas as possible to make the credit card payment
system accessible to the most number of users. We will continue
to monitor developments closely. (Paragraph 62)
7. We are disappointed
that it has not been possible to freeze the toll for 2011. The
inflexibility of the Severn Bridges Act, as originally drafted,
does not allow the Government to impose a level of toll charge
as it sees fit in the current economic climate without incurring
liability for the taxpayer. The Government should take responsibility
for the failure of civil servants twenty years ago to future-proof
the legislation. (Paragraph 66)
8. There seems to
be no appetite on the side of Severn River Crossing Plc to reduce
the toll prices and extend the concession beyond the current forecasted
end date of 2017. The responsibility of the company to its shareholders
and debtors puts it in conflict with the needs of the users of
the crossings. This will end when the Severn Crossings return
to public ownership. (Paragraph 67)
9. We make no comment
on the merits of using private sector finance to deliver public
sector infrastructure. However, it is important that the Government
learns from the inflexibility of the Severn Bridges Act 1992 and
the concession agreement when agreeing future contracts. (Paragraph
68)
Future of the Severn Crossings
10. With
running costs of £15 million a year, and a current yearly
income of £72 million, we estimate 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. We recognise, however, that at this
level no "sinking fund" would be accumulated towards
any future replacement of either bridge. (Paragraph 79)
11. We believe there
is a strong case for reducing the cost of the toll and urge the
Government to implement this when they take ownership of the crossings.
Annual accounts for the crossings should be transparent and publicly
available, so that the public can differentiate between the operational
and maintenance costs of the crossings and any profit made. The
Government must not be tempted to use the crossings as a "cash
cow" when it takes over responsibility for the crossings.
(Paragraph 92)
12. We recommend
that the Government amends the vehicle classification system contained
in the Severn Bridges Act 1992 so that free-flow technology can
be implemented as soon as possible. We believe there is a strong
case to invest in free-flow technology now. We recommend that
the Government pays the concessionaire to implement it, with these
costs recouped from future profits when the concession has expired.
(Paragraph 93)
13. We welcome the
UK Government's recognition of the importance of the Severn Crossings
to the Welsh economy and its transport infrastructure. There must
continue to be a close working relationship between the Department
for Transport and the Welsh Assembly Government over the future
strategy for the crossings. (Paragraph 94)
14. We look forward
to regular updates from the Department for Transport regarding
its future strategy for the Severn Crossings. (Paragraph 95)
Conclusions
15. The
Severn Crossings are essential to the Welsh economy. There is
the perception, however, that the high cost of the toll is detrimental
to businesses in Wales and to the development of the Welsh economy
and discourages traffic between England and Wales. The Government
must ensure that it takes note of the economic impact study commissioned
by the Welsh Assembly Government. (Paragraph 96)
16. Our inquiry has
demonstrated the inflexibility contained in the Severn Bridges
Act 1992 and the concession agreement between the Government and
Severn River Crossing Plc. This has made it difficult for the
Government to respond to the current economic climate and freeze
the toll. The Government must learn from the issues that have
resulted as a result of the drafting of the Act for future Private
Finance Initiative projects. (Paragraph 97)
17. Modern technology
must be implemented on the crossings to enable a smooth journey
with the least amount of disruption to the users. The Government
should pay for improving the methods of payment. This should happen
soon. (Paragraph 98)
18. The Government
must develop urgently a future strategy for the crossings. This
must be based on discussions between the Government, the Welsh
Assembly Government and Severn River Crossing Plc. The transfer
to public ownership at the end of the concession period in or
around 2017 provides an unique opportunity for a new tolling regime.
The current tolling prices should be reduced and concessions for
those who depend on the crossings for their livelihood could be
introduced. (Paragraph 99)
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