SLASHING toll prices on the Severn Crossings to £1 would cover the cost of running and maintaining the two bridges when they return to public ownership, an MP has claimed.
Car drivers currently pay £6.50 to use the M48 Severn Bridge and M4 Second Severn Crossing, with tolls – which rise by inflation each year – set to continue until 2018.
But David Davies, who chairs the Welsh Affairs Committee, said there was a “vast difference” between the amount of money collected through tolls and what was actually needed to keep the bridges running.
The Monmouth MP has obtained revenue figures from the Department for Transport (DfT), which also confirmed ownership of the crossings would be handed over to the UK Government on 1 April 2018, and said the “time has now come” for ministers to make a statement on what the new tolling regime will look like post-concession.
“Based on these figures, it should be possible to maintain the bridges on a fraction of the current tolls – even if you include a ‘sinking fund’ for a future bridge, if that was necessary,” he added.
The figures show Severn River Crossing Plc collected a net revenue of £91.4m in 2014, of which £13.16m was operational expenditure (including maintenance). £17m was paid in VAT.
Mr Davies acknowledged the amount made was not “a straightforward profit” but rather money that was promised to the company for building the Second Severn Crossing and taking on the burden of debt from the original bridge.
However, he argued only maintenance and running costs would need to be covered after 2018 as the UK Government has already pledged to remove VAT.
“While we need to be careful in our interpretation of these figures, they conclusively demonstrate there is huge scope for a dramatic cut in the price of the tolls when the crossings revert to public ownership,” he said.
“If you take the 2014 figures, for example, the government could potentially charge just one seventh of the current toll.
“Theoretically, that means the toll for a car crossing into Wales could be just under £1 – which would still be enough to cover ongoing operational and maintenance costs.”
Mr Davies also called on the government to reconsider plans to recoup an £88m debt it says has been amassed due to an unexpected maintenance programme and will remain even when the concession ends.
But Mr Davies said £154.2m in “unexpected” VAT has been paid by Severn River Crossing up until 2014, which “far outweighs” any debt.
The VAT payments were introduced after an EU ruling and the phasing out of the industrial buildings allowance.
“The government has accepted it has pocketed far more through the unexpected benefit of VAT and should therefore look very carefully at its decision to recoup the £88m debt it feels should be repaid,” said Mr Davies.
The DfT has since recalculated that figure to an estimated £63m because it has excluded the cost of resurfacing the Severn Bridge. This work is now timetabled for after the end of the concession period.