MONMOUTH MP David Davies has been given written confirmation that VAT will no longer be payable on the Severn Bridge tolls once the crossings revert to public ownership.
Mr Davies, who chairs the Welsh Affairs Committee, has been seeking clarification on the legal position around VAT and today received an answer from Transport Minister Robert Goodwill MP.
In his letter, the Minister states that once the concession ends – expected to be in 2018 – it would be legally possible to reduce tolls on both the M48 Severn Bridge and M4 Second Severn Crossing to reflect the fact VAT will no longer be payable.
The Department for Transport also says this would apply if the Highways Agency took control of the bridges, although there are no plans to give the agency toll-raising powers.
However, the future management and tolling arrangements of the crossings remains unclear as the UK Government has yet to announce what action will be taken after the current concession ends.
“I welcome this news and the confirmation that toll charges could come down,” said Mr Davies.
“The letter follows a meeting last month with the Minister attended by other MPs from the Welsh Affairs Committee. All of us would like to see action taken to reduce the tolls.
“Unfortunately, the Minister has not said whether the tolls WOULD fall and that is the issue I would like to pin down the government on.
“Once the concession agreement is over, the UK Government will attempt to retrieve £88 million which was spent on making urgent repairs to the old bridge. I would, however, remind ministers that they received a sum of £130 million in extra money as a result of the VAT ruling and changes to tax on industrial buildings.”
Mr Davies said the committee had calculated ongoing maintenances costs for the bridges would be around one third of the current toll price and “nobody has contradicted this.”
“I therefore think we must now demand a clear plan for the post concession period with a significant reduction in the tolls,” he added.