Public ownership of Severn Bridges would cut tolls - MP
10:20am Saturday 18th August 2012 in News
A TORY MP has called for the Severn Bridges to come into public ownership so users can see a 20 per cent cut in tolls.
David Davies, MP for Monmouth, said because of a European court ruling in 2002 the government would not have to charge VAT on tolls if it took over the bridges.
However he said there was little that could be done until the current 'concession' agreement, that allows a private firm to run the bridges, runs out.
European Union rules drawn up in the 1970s state public bodies couldn't levy the tax on transactions they make.
A judgement by the European Court of Justice in 2002 said governments were entitled to not charge VAT on tolls - but the same judgement said that did not apply to private firms that discharged those duties.
As a result VAT was absorbed into the cost of the toll in 2003, meaning drivers did not have to pay higher charges.
Mr Davies believes that as a result of the ruling if the bridges were taken over by the government tolls could be cut instantly by 20 per cent.
"If we can see a 20 per cent reduction in tolls by allowing them to go into government ownership I would be happy to see it go into government ownership," he said.
"I'm pragmatic. I'm not against private companies running parts of infrastructure," he said.
But Mr Davies added: "It should be who can do the cheapest job."
The Severn Bridges are both run by Severn River Crossings PLC. It is thought the concession is currently due to run to 2018, when the bridges will be taken over by the government.
A Department for Transport spokeswoman said that no decisions have been made about the future of the crossings.