Highway robbery
Outraged motorists accused the Severn Bridge operators of highway robbery for not passing on the VAT cut to drivers and planning to raise tolls next year.
Hauliers and commuters who face a large price rise in January were furious after the company admitted it would not be cutting the tolls for crossing the two bridges.
Campaigners say the 2.5 per cent cut in VAT is worth about £1.75 million a year and are urging the Government to step in and force Severn River Crossing (SRC) to give the money back to beleaguered motorists.
Some say the economic situation is so dire the Government should take advantage of a clause in the Act of Parliament that allows them to completely freeze tolls.
Politicians, hauliers and drivers were furious when they were recently warned to expect a rise in the tolls of more than five per cent next year and they warned the Government increasing costs were crippling commuters and companies.
They had already started fighting the soaring costs, which will mean prices going from £5.30 to £5.50 for cars, £10.60 to £11.10 for vans and £15.90 to £16.60 for HGVs, when the Chancellor gave his pre-Budget report.
And they were stunned to learn the company responsible for the bridges had no plans to drop charges in line with the VAT cut.
Monmouthshire politician Mike German said drivers had already paid the £330m cost of the second Severn Crossing more than twice over and he has written to Minister Rosie Winterton demanding to know if the decision not to cut the 93p VAT bill per car is legal.
He says it is wrong that motorists have to pay so much more than those using the Dartford Tunnel and the Humber Bridge, who fork out £1.50 and £2.90 a journey respectively, and is demanding a price freeze.
"It's highway robbery," he said "Car drivers who commute every day will be facing a £25 bill on top of the hundreds of pounds people already spend to use part of the motorway network.
"If the Government lets a major international company like Severn Crossings flaunt the VAT cut, then they will be sending a message to all businesses not to bother passing on the cut."
A 2.5 per cent cut in VAT would be worth about 10p for cars, 30p for vans and 40p for lorries next year.
But Mr German said just passing on the VAT cut would not be enough and he is urging the Government to scrap the annual inflationary rise and bring in an arrangement similar to the one at the Dartford Tunnel.
Motorists can travel through the tunnels free between 10pm and 6am and locals who join a £10 regular-user scheme can make 50 free journeys and pay 20p for others.
He also wants to scrap the old fashioned cash-only system so drivers can use debit cards at the tolls.
He is backed by regular bridge users such as Jane Robbins, who works at the University at Bristol and is a town councillor in Chepstow.
She said: "Every penny counts and it's a real blow to now learn that the VAT cut is not being passed on to bridge users. Why are they allowed to say that they will not pass on the cut?"
SRC collects tolls to cover the cost of building and repairing the 12-year-old Second Severn Crossing and maintaining the 42- year-old original bridge between Aust and Chepstow.
Under the 1992 deal between the Government and the company, both bridges will return to state ownership when the SRC has collected about £1 billion to cover old debts, costs, inflation and an agreed profit margin.
Originally this was expected to be in June 2014 but in 2003, when Ministers imposed a VAT levy of 17.5 per cent, the Treasury agreed to let the company collect tolls for about an extra two years.
SRC general manager Jim Clune said this is why it was not passing the cut on to motorists.
He said: "When VAT was imposed in February 2003, prices didn't increase. The toll prices became VAT inclusive and therefore the motorist didn't pay any increase."
Campaigners say they can understand the company not wanting to change the system, part way through the year in 2003, but say the VAT cut could be passed on because all the signs and machines will have to change in January 2009 for the annual rise.
They say tolls are putting extra strain on workers and businesses and cutting the VAT would be a small step in the right direction.
And they point out that every time the tolls rise, roads such as the A48 through the Forest of Dean and Chepstow get busier as hauliers replan their routes to try to avoid the charges.
Ledbury haulage boss Andy Boye, who is chairman of the Road Haulage Association, accused the Government of operating double standards at a time when hauliers were being hard hit by the economic slowdown.
"The whole thing is a nonsense," he said. "The Chancellor said the reduction in VAT would make up for the 2p increase in the fuel duty and now we are told they cannot even be bothered changing the tolls on the Severn Bridge.
"I'm not surprised because the Severn Crossing is a monopoly and they have always been a law unto themselves, but it just goes to show how ridiculous the whole thing is.
"It's morally wrong. On Monday I will be charging my customers 15 per cent VAT not 17.5 per cent. What's good for the goose should be good for the gander and if I have to do it, everyone else should too."
A Department for Transport spokesman said though fees would not fall immediately, the VAT cut could shorten the life of the tolls or be one of the things taken into account when it reviewed toll increases for January 2010.
But John Warman, secretary of the Campaign Against Severn Tolls, urged politicians to put pressure on the Government and said: "The haulage industry is really struggling at the moment and this situation is not sustainable with the financial conditions the way they are."
Samantha Bittle, 23, commutes from Ross-on-Wye to Bristol to work for the court service and is considering moving to avoid the tolls. She said: "I can't believe they are putting them up again. I don't know how I will be able to pay for it."
Prices have gone up by about 45 per cent since 1996 when tolls were £3.80 for cars, £7.70 for vans, £11.50 for HGVs.













Comments
by Andrew Tyler, Wales NP10 8
Tuesday, December 02 2008, 1:58PM
“The Toll Boothes are issuing receipts with 15.0% as of 1st Dec, but SAME NET and VAT as before, £4.60 and £0.69 respectively. Who is pocketing the difference ? Are the PLC company Severn River Crossing PLC only paying the 15.0% to HMRC ?”