News that the Conservative MP for Monmouth constituency, David Davies has come around to the idea that the Westminster Government should take control of the two Severn bridges should be warmly welcomed. Currently the original Severn Bridge and the Second Severn Crossing are maintained and operated by Severn River Crossing plc (SRC), in approximately five years SRC’s contract will come to an end. While the Westminster Government is quite content for the concession to remain in private hands, the MP for Monmouth is not.
As noted by the Western Mail (06.08.2012), a briefing paper provided to Mr Davies from the House of Commons Library reveals how a European court judgement in 2000 determined when VAT is payable on bridge tolls, when they are operated by private concessions. According to the briefing paper states, local government authorities and other bodies which are governed by public law’ may not charge VAT on ‘transactions in which they engage as public authorities, even where they collect dues, fees, contributions or payments in connection with these activities or transactions’. What this means is that if the Severn bridges were run by a state body, then long suffering motorists and businesses would not have to pay VAT at 20% to drive across them.
Back in October 2010, a study for the Welsh Affairs Select Committee at Westminster, which is looking at the impact the tolls on Wales amongst other things. Professor Peter Midmore's study found that Welsh businesses were unfairly penalised by the tolls and concluded that the money should be shared with the Assembly Government and used to improve Wales’ roads and public transport. Under the current stitch up (sorry set-up), once the cost of the Second Severn Crossing is paid off (by 2014 or 2016) the revenue stream will revert straight to Treasury coffers in Westminster.
The study of 122 businesses commissioned by the Federation of Small Businesses found that the tolls had a negative impact on 30% of firms in South Wales, compared with 18% in the Greater Bristol area. While noting that the economic impact was not substantial for most, the study found that transport; construction and tourism-related companies reliant on regular crossings suffered increased costs and reduced competitiveness.
As long as the operation of the bridge tolls remain in the hands of a private company (Severn River Crossing PLC) then commuters, businesses and visitors will continue to get regularly fleeced. The bridge tolls have become in an effective a tax on jobs, a tax on commuters, a tax on growth and tax on business in the south of Wales. When the concession comes to end in 2018 the bridges could revert to the Department for Transport in London.
Plaid has long called for control, or shared control, over the bridge to be devolved to the Welsh government and those negotiations to this end should start immediately to ensure that the transfer is in place by 2018. Plaid is committed to reducing the tolls on the Severn Bridges to under £2 per car and recognises that the high cost of the tolls is a serious matter of concern for the Welsh people because of the impact on businesses, especially freight and logistics, and on people visiting Wales. The bridges are of such importance that it is only fair that control, or at least shared control, over them is in the hands of the Welsh people.