Businesses call for end to bridge toll

Publication date: 27 April 2009

Crossing the River Severn is taking its toll on small businesses in Wales, which have renewed calls for the abolition of the Severn bridge levies following the Scottish government’s decision to scrap all bridge charges in Scotland last year.

The Federation of Small Businesses believes the tolls on the two Severn bridges inhibit business growth and tourism in Wales.

On both bridges the toll is paid once on the way into Wales, potentially deterring inward travel more than outward.

Russell Lawson, head of public affairs for the FSB in Wales, told the Financial Times: “It’s a tax on coming into Wales, which has a negative impact on businesses based in Wales, those that want to invest or trade in Wales and on the tourism industry.”

The FSB wants the government to abolish tolls where there is no toll-free alternative .

On the M6, drivers can choose to pay the toll to avoid congestion on the toll-free parallel route, but there is no option when crossing the Severn.

It argues that removing the tolls will remove barriers to business growth, generating profits that can be re­invested into UK roads.

In 1992, the UK government passed responsibility for the bridges to Severn River Crossing , a private company.

The company took over the operation, maintenance and the outstanding debt of the original Severn bridge that links the M48 across the river.

It also took on financing, construction, operation and maintenance of the second bridge, which now connects the M4 to Wales and is the main artery to the principality.

All toll income goes to Severn River Crossings until it reaches £1bn (in 1989 prices), according to an agreement with the Department for Transport, at which point the bridges revert to public ownership. Severn River Crossing estimates this will be in 2016.

The FSB wants the Welsh Assembly to put pressure on the UK government to pay off Severn River Crossings and scrap the tolls. “Ideally we’d like to see the tolls abolished immediately,” said Mr Lawson.

The Department for Transport says: “Tolls are in place to allow Severn River Crossing to cover costs associated with the construction, operation and maintenance of the bridge.

“It is appropriate that tolls are charged where users benefit from shorter journeys. It would be unfair for taxpayers as a whole to subsidise this.”

In Scotland, after years of FSB lobbying, the last remaining tolls on the Forth and Tay bridges were abolished in February last year.

The FSB National conference was held in Newport this year – with anyone who came from England by car forced to pay the £5.40 toll to cross the river.

Speaking at the conference, Ieuan Wyn Jones, deputy first minister for Wales, said that the issue of Severn bridge tolls could not be revisited until 2016.

The Welsh Assembly government said: “While we understand the concerns of the FSB, there is no concrete evidence to suggest that the Severn bridge tolls are having a negative impact on the Welsh economy.”

The FSB is undeterred. Mr Lawson says the assembly “should be doing more than they are” and believes there are opposition members who would side with the FSB. “We’re going to keep the pressure on,” he said.

In January, the FSB commissioned a research project to be carried out by Aberystwyth University to gather evidence to determine what impact the tolls are having on Wales. The study is due to be completed by June.

While the tolls may not concern all businesses, hauliers are hard hit as the tolls are a direct cost for them.

Mark Richmond, managing director of Rhys Davies Freight Logistics, based in Cardiff, said: “The toll forms part of the overall costs of our operation, albeit a small percentage but, in the logistics and haulage industry where you’re working on incredibly small margins, it does have an impact and potentially makes us less competitive.”

Mr Richmond says that though “you can’t expect a shiny new bridge for nothing”, the charges are expensive.

It costs £16.30 for a heavy goods vehicle to cross from England into Wales via the second Severn crossing, compared with £3.70, paid both ways, for the Dartford crossing, east of London.

“For businesses like us and our customers it does become a cost you can’t avoid and therefore an indirect tax on goods and services and businesses operating in Wales.”

David Lavelle, chief executive of Loseley Dairy Ice Cream based in Cwmbran, says workers are also put off commuting from England.

“The toll puts people off applying [to work for us] from across the Severn and a number of employees have negotiated the inclusion of their toll costs into their package.”

Source: The Financial Times