BOUND TO HAPPEN SOONER OR LATER...

The Conservatives in Wales have finally joined calls for the Welsh government to be handed control over the Severn bridges, only to find that a Conservative minister in the Con Dem Coalition government is opposing any such idea. The Conservatives in the Senedd have proposed cutting the bridge tolls and using the proceeds to spend on infrastructure. So we have elected representatives from the same party in opposition to each other over an issue of importance to the Welsh people and our economy. Nothing new here, Labour in Wales was often at loggerheads with Labour in Westminster, putting party (and self) interest before the interests of Wales.

The Second Severn Bridge

Now when it comes to transferring the Severn Bridges (and their income) to Wales, this is also not a new idea. Back in October 2010 Professor Peter Midmore produced an independent economic study of the Severn Bridge tolls which recommended that the revenues should stay in Wales, once the crossings revert to public hands. The Welsh Affairs Select Committee back in December 2010 recommended that the bridge tolls be cut once the concession ends.

At the moment both of the Severn Bridges are run by a private company (Severn Crossings PLC) and the Welsh government (in a report published in November 2012) wants to take control of the Severn Bridges when they return to public ownership. The bridge concession when it ends in 2018 will have brought in some £996 million pounds (based on 1989 prices). At the moment it costs £6.20 to take a car over the M4 and M48 bridges from England to Wales, with driving into England being free. Vans and minibuses cost £12.40 and for Lorries and coaches £18.60. Businesses and commuters currently fork out around £80 million pounds a year to cross the bridges.

Yet, Westminster, no doubt with an eye on useful income stream has said that the Severn Bridges when the concession finally comes to an end won’t be transferred to Wales and also that the tolls may not get cut either. Interestingly enough, the Humber Bridge continues to receive a subsidy, but, no such luck for the Severn Bridges and their hard pressed commuters. Perhaps the party formerly known as New Labour and the current Con Dem Government in Westminster hoped that here in Wales – out of sight and out of mind (at least from a Westminster perspective) - we would not notice the ongoing subsidy.

Plaid has long called for control, or shared control, over the bridge to be devolved to the Welsh government and for negotiations to start immediately to ensure that the transfer is in place by 2018. The Party, committed to reducing the tolls on the Severn Bridges to under £2 per car, recognises that the high cost of the tolls impacts on commuters and 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.

THANKS FOR NOTHING...

A report (produced by Arup - engineering consultants) on behalf of the Welsh Government has suggested that ditching the bridge tolls on the Severn Crossings could boost the economy of south Wales by £107 million. The report suggests that the removal of the tools could boost traffic flow by around an extra 11,000 vehicles driving over the two bridges every day. The Arup report says that businesses and consumers pay out around £ 80 million pounds a year to cross the Severn bridges.

The report looked at what would happen if the tolls were halved, increased by 50% or scrapped entirely. The total revenue brought in 2009 was £77.4 million pounds. A reduction in revenue if the toll was cut by around half (46%) could be around £36 million pounds a year (based on 2009 prices). An increase in the toll by around half (41%) would bring in an extra revenue of around another £36 million pounds per year. Either way any projected change in revenue (on paper) comes in is less than proportional to the change in toll because of either higher or lower traffic flows.

The tolls have been used to pay for their construction of the new bridge, and the maintenance and operation of both the old and the new bridge(s) via a concession agreement with Severn Crossings Plc.

The concession agreement currently in place ends at the point that the operator has raked in around £996 million pounds at 1989 prices (so we are talking about probably well over a cool £100 million pounds by 2018). The tolls are due to end in 2018 when the bridges will revert back to the UK Government.

Back in October (29012) the UK transport minister Stephen Hammond revealed that the government has substantial debts on the bridges which would to be repaid so the tolls would not cease to be collected.  Currently both the Severn Bridges are run by a private company, the concession agreement is due to run its course in 2018, at which point the bridges will return to government ownership. It had been suggested that once that concession agreement ran out, the bridge tolls might have dropped to around £1.50.

This, however, now appears not to be the case, the House of Commons Welsh Affairs Select Committee, was told that there would be no drop bridge tolls when the concession ends. Even though the bridges would come back into public ownership there were apparently "substantial government debts that needs to be repaid" from building and maintaining the river crossings amounting to around several hundred million pounds.

The Welsh Affairs Select Committee was told that the government has a deficit of at least £112 million left on the bridges covering items such as maintenance costs and the costs of "professional advice". The Department for Transport has stated that once the concessions ends the government will need to repay its own debts resulting from the building and maintenance of the bridges, and so tolls will continue after 2018.

Meanwhile the Labour in Wales First Minister Carwyn Jones has stated that control of the bridges should be transferred from the UK government to the Welsh government in 2018, he has so far refused to state say what a Welsh Government would do to the tolls. The Severn Crossings which are the main way in and out of South Wales carry an average daily traffic of about 80,000 vehicles. Bridge Tolls have been in place ever since the first Severn Bridge was constructed.

So there appears to be little chance that hard pressed commuters will see and end in sight to the tolls, whether they remain under the control of the Department of Transport (in London) or the Welsh Government (in Cardiff) – no doubt both potential inheritors of the tolls don’t want this cash cow to be put out to pasture.  So whether it looks like it will be one of our governments continuing to fleece us  and continue to the ramp up fat profits at our expense for the foreseeable future (after 2018). Thanks for nothing...

WHY DID THEY BOTHER?

The news that the Severn Bridge tolls are unlikely to drop once the vital crossings come into public ownership does not surprise me very much. The  UK transport minister Stephen Hammond stated that the government has substantial debts on the bridges that need to be repaid.  Both the Severn Bridges are run by a private company, the concession agreement is due to run it course in 2018, at which point the bridges will return to government ownership. It had been suggested that once that concession agreement ran out, the bridge tolls might have dropped to around £1.50.

Sadly this appears not to be the case, the House of Commons Welsh Affairs Select Committee, was told that there would be no drop bridge tolls when the concession ends. Even though the bridges would come back into public ownership there were apparently "substantial government debts that needs to be repaid" from building and maintaining the river crossings amounting to around several hundred million. It is enough to make you wonder after the best part of twenty five years of a private company fleecing the people of south Wales and ramping up fat profits at our expense why the bridges were ever privatised in the first place?

Back in June 2010 a Plaid Freedom of Information request revealed the significant difference between the large amounts of money raised by Severn River Crossing plc from the toll, and the relatively small amount being spent on treating the damage to the cables on the old crossing. The FOI request revealed that (since 2006) some £15 million has been spent on main cable work on the first Severn Crossing (the M48 bridge).

The Highways Agency (back in 2011) revealed that another £5.8 million's worth of maintenance will take place over the next five years.  This was despite the fact that some £225,733,000 has been collected in bridge toll revenue since 2006. Back in October 2011 I speculated on whether we were going to get saddled with major work to maintain the bridges while the toll profits were being siphoned off by the concession holding company after the bridges are finally returned to public ownership (then in 2014 or 2016) now 2018. Depressingly the answer is Yes...

DOOMED TO REPEAT THE MISTAKES OF THE PAST?

The Westminster Welsh Affairs Committee is correct when it says that Wales was ‘slow to adapt’ to changes in the international market for overseas investment. There is much truth in the Committee's labelling of the late 1980’s and early 1990’s as a ’golden age’ for attracting foreign business investment thanks to a combination of grants, land and relatively cheap labour costs.

The Committee is also correct to say that successive governments reacted far too slowly to new emerging challenges from Eastern Europe and more distant competitors. Wales paid the price for that complacency as between 1998 and 2008, some 171 foreign-owned sites closed, with the loss of 31,000 jobs, mainly in the manufacturing sector.

The economic development model as practised by the Westminster Government (and the Welsh Office) well before 1997 and by the Welsh Government before 2007) was fundamentally flawed at a very basic level – it was short term and fundamentally dependent upon a combination of relatively cheap labour and other inducements that could never compete on a truly level playing field.

For too many years economic development (from the 1950's onwards) was focused on one-off large scale developments - what can be best described a single egg solutions, which promised much and deliver significantly less. The assumption, not entirely incorrect, may have been that other smaller business would develop supply materials, goods and services to the primary larger employer – this happened in part, Llanwern Steel works being a reasonably good example.

The problem was that if the larger industry suffered a downturn or caught cold then the smaller firms would suffer with varying symptoms of pneumonia. The focus should have been on developing small to medium size local businesses, which are significantly less likely to up sticks and leave for perceived greener pastures and fresh applications of development grants and also trade with each other and other local firms.

The LG development near Newport, was a good example of this - promising the usual total of 6,000 jobs – it accrued significant public funding (committed by the then Welsh Secretary, William Hague) yet never delivered anything like what was promised. Most economists (even Conservative ones) should have had serious concerns about the state of the Korean and the Far Eastern economies and a basic understanding of where technological developments in relation to PC monitor screens were going, enabling them to say hang on a moment.

A combination of fantasy island economic assessments, a fatally flawed business case and a forthcoming Westminster election led to one of the spectacularly duller decisions of recent years being made, something that ended up costing us millions of pounds worth of public money. The old WDA has in truth not really consistently delivered anything like long term economic stability and much needed long term job opportunities to our communities that it should have done considering the amounts poured into it..

European funding opportunities has been seriously squandered, where are the physical assets, by which I mean the things you can literally put your hand on like improved communications (rail and road), broadband infrastructure, etc - that bring long term benefits to our communities. How much money has been scammed (and scammed may be the key word) into dubious training programmes and questionable educations programmes that fail to deliver the necessary skills that workers and potential workers need to make a decent living in the modern economy?

What was called in some circles the Plaid driven One Wales Government (2007 – 2011) at least made significant efforts to think and act differently when it comes to economic development and support for small to medium sized enterprises. Simply going out to attract branch factory operations for a relatively short term period does not help develop our economy it merely seeks to repeat the mistakes of the recent past, but, of course Labour (New or Old) is far happier living in the past than in Wales.

NOT GOOD NEWS

Despite a well organised and well supported campaign to prevent the closure of Newport's Passport Office, PCS Union leaders say they expect confirmation this Monday that the passport office will close with the loss of 280 jobs. The PCS said indications from the UK Government were it would press ahead with its cost cutting measures.

Local people, local politicians and local press were united in their call to retain the Passport Office, the Westminster Welsh Affairs Select Committee has criticised the move warning that it will have a "significant" economic impact in Newport. An Identity and Passport Service spokesman said it had completed a collective consultation over the centre's future and that it would inform staff of the future of the office on Monday.

So much for a Conservative dominated Government listening to Wales and so much for the consultation and listening to local concerns. While I rarely agree with any sentiments expressed by the South Wales Argus in relation to Wales, The South Wales Argus, adequately described the news of the closure and its impact on Newport back in October 2010 in an editorial, which I post in full:


IGNORANCE OF WELSH IDENTITY


AS we have said all through our campaign to save Newport's passport office, the loss of 300 jobs would devastate each and every individual and their families and have a severe impact on the local economy. 


But at a time when the government is actively planning the loss of half a million public sector jobs the loss of 300 is not in itself likely to cause it to reverse the closure decision. 


What we have said all along is that it is morally and philosophically wrong for the Welsh nation to lose its only passport office - a powerful symbol of national identity. 


Now we discover what, in truth, we had suspected all along.


In reaching its decision to obliterate the passport office in Newport the home office did not for one moment consider the impact this may have on the national identity of the Welsh. 


At a time when officialdom goes way over the top not to upset various religious or lifestyle lobbying groups, and when it is rightly illegal to discriminate against anyone because of their racial or ethnic backgrounds the home office (upholder of the law) sees no difficulty in ignoring Welsh identity.


This takes us back to the days when the Encyclopaedia Britannica told its readers that to read about Wales they had to look under references to England. This is the work of Whitehall mandarins and ministers who see Wales as nothing more than an extension of England. 


This newspaper is not in any way an advocate of Welsh nationalism, but it does believe totally in the right to nationalistic Welshness.

Whitehall's failure to recognise the inalienable rights of Wales to equality with other nations smacks to us of institutionalised racism.


It is time to draw a line in the sand which central government thinks very carefully before crossing.

Criteria for crossing this line should not just consist simply of a business case but of a complete understanding that this is a different part of the United Kingdom, not a region of England, with a proud history and with proud traditions, which it is not going to surrender. 


The politicians need to acknowledge this fact and, as we have said before, deliver a much more sensitive strategy for saving money that does not deliver a kick in the teeth for Wales. 


[The South Wales Argus EDITORIAL COMMENT...on Wednesday 27th October 2010]

NOW THAT'S AN INTERESTING IDEA...

I for one very warmly welcome Professor Peter Midmore's independent economic study of the Severn Bridge tolls which has recommended that the revenues should stay in Wales, once the crossings revert to public hands. The study for the Welsh Affairs Select Committee at Westminster, which is looking at the impact the tolls on Wales amongst other things.

The Professor'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 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.

There are also concerns, if not fears that the bridge tolls, which currently range from £5.50 for a car to £16.40 for a heavy goods vehicle (HGV), may stop the development of small-to-medium-sized business in the areas surrounding the bridges.The study 's findings which come only a few weeks after the private company running the bridges blamed growing unemployment and a rise in the cost of fuel on a 20% drop in traffic in the past two years.

Severn River Crossings plc further warned that unless traffic levels pick up, then it could take longer to pay off the cost of the second bridge – delaying the handover of the bridges to public ownership until as late as 2018.

The study, which will be submitted as evidence to the Welsh Affairs Select Committee, which is conducting a cross-party inquiry into the economic impact of the tolls and the future of the bridges. concludes that its “highly unlikely” the tolls will be abolished even when the bridges revert to public ownership.

The private company that runs the Severn Toll Bridges (and we can thank the Tories for that) managed to raise around 226m over the last three years (up to June 2010) yet barely spent £15m on essential maintenance on the original crossing's damaged cables. That the bridge tolls have been used used as little more than a cash cow, to fleece bridge user should come as not much of a surprise to many people.

Plaid Cymru's South Wales Central AM Chris Franks, (in June 2010) used the Freedom of Information Act to show the significant difference between the large amounts of money raised by Severn River Crossing plc from the toll, and the relatively small amount being spent on treating the damage to the cables on the old crossing. His FOI request revealed that (since 2006) some £15m has been spent on main cable work on the first Severn Crossing (the M48 bridge). The Highways Agency suggested that another £5.8m worth of maintenance will take place over the next five years.

This despite the fact that some £225,733,000 has been collected in bridge toll revenue since 2006. People may well begin to wonder if they are going to get saddled with major work to maintain the bridges after the toll profits have been siphoned off by the concessionary company when the bridges are finally returned to public ownership in 2014 or 2016.

The knowledge that Severn River Crossings plc may, due to falls in traffic levels, take even longer to pay off the cost of the second bridge, thus delaying the eventual handover of the bridges to public ownership until as late as 2018, will bring little comfort to bridge users facing yet another annual increase in the Severn bridge tolls in January 2011.

Yet, despite persistent bleating from Westminster sheep over the years along the lines of there is nothing we can do to reduce or stabilise the tolls! It turns that this is or was not quite true as the last New Labour Government actively intervened in October 2009 in relation to the Humber Bridge.

Sadiq Khan, the then New Labour Minister of Transport, announced a grant of £6m to the Humber Bridge company, saying that, “the Government was committed to doing everything it can to protect communities and businesses from economic downturn and help the country to recover. That is why I decided not to accept the Humber Bridge board’s proposed toll increases”. Very nice - but if that's the case in England, then why not in Wales?

Admittedly the Severn Bridges straddle the Welsh English border something that may complicate the issue of ownership with the tolls on the newer bridge being collected in Wales, and the older one being collected in England. Additionally the questionably worded concessionary agreement (and the Act of Parliament) which enables the tolls to go up each January may also have something to do with it.

One key question that no one appears to be asking or answering is what will happen to the tolls once the concession expires or ends. Will the bridge and the tolls simply revert back to the Department of Transport? Or might a portion of the tolls end up filtering down to the National Assembly, by default or as a result of central government indifference. Will the National Assembly act as merely as a local agent for the Department of Transport? Or is total control of the revenue

If it the whole package ended with the National Assembly, then if the current tolls were halved then, what could be accomplished by using a percentage to cover maintenance of the bridge and using the remainder of the toll for ring fenced capital projects – such as new integrated transport systems, reopening railway lines, funding tram systems and investing in rail freight – which would be far more beneficial for all of us in Wales than the finance disappearing into the Westminster coffers or being used to bail out the bankers?

BETTER LATE? OR BETTER NEVER?

The news that the Severn bridges will now accept payments via debit and credit cards before the Ryder Cup is welcome news, even if it is only a temporary measure until a more permanent solution is found. Whatever the nature or duration of this quick fix the problem of the tolls on the Severn bridges remains ongoing - basically they can be considered as a tax on jobs, a tax on commuters and tax on anyone or any organisation that does business back and forth across the bridges.

The news that the Welsh affairs committee is in October set to examine the future of the bridges after the crossings have reverted to public ownership should also be welcomed. At the moment the concessions are operated by a private company, the Severn Bridge will return to government ownership when the firm has collected a fixed sum of money from tolls.

The committee plans to look at how tolls on the bridges affect the Welsh economy, the amount of cash that is spent on maintaining the bridges, their future when they return to public ownership and at the level of the tolls, payment methods, the impact of the tolls on tourism and the condition of the bridges.

It's good to see that some of our local New Labour MPs are fully behind this enquiry, which is what you would expect - Jessica Morden, MP for Newport East (and a member of the committee) has welcomed the move (in June of this year), saying that the tolls could be lowered for people living in the surrounding area: “Like the Dartford crossing I can't see why you shouldn't be able to get a concession for those within a certain postcode area.”

Now this is all well and good and very welcome but a tad late, as lest we forget, that New or Unreconstructed Old Labour (under Tony Blair and then Gordon 'Houdini' Brown) were firmly in power (with significant majorities) from 1997 until 2010 so why did they not do something about the Severn bridge tolls then when they had the opportunity?

It's also worth remembering that the private company that operates the Severn Toll Bridges has raised almost £226m over the past three years – yet has spent barely £15m on essential maintenance on the original crossing's damaged cables - which suggests that the bridge tolls are being used as little more than a cash cow, should not come as much of a surprise to many people.

This little gem was extracted by Plaid Cymru's South Wales Central AM Chris Franks, who obtained the figures (in June 2010) under the Freedom of Information Act. The FOI request showed a significant difference between the large amounts of money raised by Severn River Crossing PLC from the toll, and the relatively small amount being spent on treating the damage to the cables on the old crossing.

The Highways Agency suggested that another £5.8m worth of maintenance will take place over the next five years. This despite the fact that some £225,733,000 has been collected in bridge toll revenue since 2006. People may well begin to wonder if they are going to get saddled with major work to maintain the bridges after the toll profits have been siphoned off by the concessionary company when the bridges are finally returned to public ownership in 2014 or 2016.

Even when you looking beyond the immediate teeth grinding impact of yet another annual increase in the Severn bridge tolls (which we will all face in January 2011) there is another issue – one that is beginning to become worth considering, what's going to happen in 2014 (or 2016) when it has been estimated that the PFI contract will have been covered by toll receipts.

Who actually is going to own the bridge (or bridges) and will they stop collecting the tolls? If not then the bridge (or bridges) which sit on the border - with the toll on the newer bridge being collected in Wales, and the older one being collected in England - will the bridge and the tolls simply revert back to the Department of Transport?

Or if perchance the whole package ends with the National Assembly, by default, then if the current tolls were halved then, what could be accomplished by using a percentage to cover maintenance of the bridge and using the remainder of the toll for ring fenced capital projects – such as new integrated transport systems, reopening railway lines, funding tram systems and investing in rail freight – which would be far more beneficial for all of us in Wales than the finance disappearing into the Westminster coffers or to bail out the bankers?

Something else that is worth noting that in October 2009, Sadiq Khan, the then New Labour Minister of Transport, announced a grant of £6m to the Humber Bridge company, saying that, “the Government was committed to doing everything it can to protect communities and businesses from economic downturn and help the country to recover. That is why I decided not to accept the Humber Bridge board's proposed toll increases” if that's the case in England, then why not in Wales?

THE SEVERN BRIDGE TOLLS

The news that the Welsh Affairs Select Committee (South Wales Argus 21st July and Western Mail 22nd July) , chaired by Monmouth MP David Davies is to investigate the future of the Severn bridge tolls. Personally speaking having contested Monmouth constituency twice at Westminster level for Plaid, I know that David Davies once he gets his teeth into something (once he gets focused) can be pretty tenacious and terrier like, so hopefully we may get some clarity and some answers.  

The Welsh Affairs Select Committee will look at how tolls on the bridges affect the Welsh economy, the amount of cash that is spent on maintaining the bridges, their future when they return to public ownership and at the level of the tolls, payment methods, the impact of the tolls on tourism and the condition of the bridges.

This is welcome news, as back in June, Plaid AM Chris Franks, revealed that the private company that operated the Severn Toll Bridges had raised almost £226m over the past three years – yet barely £15m had been spent on essential maintenance on the original crossings damaged cables - should not come as much of a surprise to many people. The Severn Crossings Tolls have been a valuable cash cow for many years, effectively gifted by the then Conservative Government to the concession holders.

The bridge tolls have become in recent years an effective a tax on jobs, a tax on commuters, a tax on growth and tax on business in the south of Wales. Plaid Cymru's South Wales Central AM Chris Franks obtained the figures under the Freedom of Information Act, which showed significant difference between the large amounts of money raised by Severn River Crossing plc from the toll, and the relatively small amount spent on treating the damage to the cables on the old crossing (M48).

Since 2006, some £15m has been spent on main cable work on the first Severn Crossing. The Highways Agency suggests that another £5.8m of repairs will take place over the next five years. Some £225,733,000 has been collected in bridge toll revenue since 2006. people may well wonder if they are going to get saddled with major work to maintain the bridges after the toll profits have been siphoned off by the concessionary company when the bridges are finally returned to public ownership in 2016 or 2017.

The Committee will take evidence from the Severn River Crossing Plc, who run the M48 and M4 bridges, government ministers, business representatives in Wales and others. Written submissions on the topic need to be in by September 3, with evidence to be heard in public in October and November. For information on how to take part email: welshcom@parliament.uk - the committee hopes to report back with recommendations for the government by the end of 2010.

Naturally our local labour MPs are behind the enquiry, which is what you would expect - Jessica Morden, MP for Newport East (and a member of the committee) has welcomed the move, saying that the tolls could be lowered for people living in the surrounding area: “Like the Dartford crossing I can't see why you shouldn't be able to get a concession for those within a certain postcode area.”

A good call from an opposition MP you might think, the problem is that despite being relatively comfortably in Government for many years, this is the way our local Labour MPs and AM's have (and in the case of the local Labour AM's are still) playing it.  Unfortunately, as lest we forget, New Labour (under Tony Blair and then Gordon 'Houdini' Brown) were firmly in power from 1997 until 2010 so why did they not do something about the Severn bridge tolls then?

PERHAPS - AN INSPIRED CHOICE?

The choice of David TC Davies (MP for Monmouth) as the new Chair of the Welsh Affairs Select Committee may on the surface seem at first seem a tad odd. Certainly in the past he found the higher status of the Home Affairs Select Committee far more appealing than the Welsh Affairs Select Committee, where his poor attendance had been noted previously, with a bare 5 out of 44 appearances - so much for that strong voice for Monmouth / Wales in Westminster. 

However, once you finish mopping up the tea you spilt on your keyboard one you found out the news, then the appointment may begin to make more sense. Think about it, if you want to give someone a position to marshal the anti-devolution attack dogs / 'devo negatistas', derail legislative Competence Orders,  and generally treat Wales (and all things Welsh) with typical Tory contempt, then perhaps they (the ConDems) have made a wise choice after all - I mean Wales is just so not on Cameron and Clegg's radar and never will be. 

I'll bet that this has not gone down particularly well in Tory circles in Cardiff Bay...