Monday, January 8, 2018

Freight Transport and Road Haulage Interests Cautious Over Severn Toll Cost Reductions

Removing VAT Will Not Affect Most and Stakeholders Want Firm Date for Promised Cancellation
Shipping News Feature
UK – Today marks a somewhat historic occasion for both private motorists, and van and heavy goods vehicle road haulage operators, as it heralds that most unusual of occurrences - a reduction in road tolls on a major route! However for most freight trucking firms there will currently be no actual financial benefit whatsoever, as the charges are simply now exempt of VAT. As from 8 January there will be a reduction in tolls across the board for motorists heading across the two Severn Bridges in a westbound direction (there is no charge for the return journey).

Now the government has assumed control of the crossings on the M4 and M48 motorways, VAT is dropped, but that has hardly been welcomed by the two lobby groups whose members are most affected by the cost of travelling into Wales. Both the Freight Transport Association (FTA) and the Road Haulage Association (RHA) are eager to learn when the government will actually fulfil its promise to remove tolls on the bridges completely.

The FTA says that removing the tolls will provide a vital boost to the economies of South Wales and the South West of England with Ian Gallagher, FTA Policy Manager for Wales and the Southwest commenting:

“Today marks a turning point for users of the bridges, although the reduction by the rate of VAT has little impact on the business community which, in many cases, can reclaim this cost. The intended removal of all charges on the bridges by the end of this year is a welcome boost to logistics businesses in both the South West and South Wales already facing serious financial pressures. With the uncertainty of Brexit looming, anything which can help to boost business revenues is great news to keep economies on both sides of the Severn estuary trading effectively.”

Although generally optimistic, the RHA remains cautious about the reduction, and eventual scrapping of tolls on both of the Severn crossings that link England and Wales. The government has sworn to remove all charges during 2018, but has failed to confirm an actual date as yet. The new reduced charges mean that drivers of commercial vehicles will now pay £11.20 for those up to 3,500Kgs and £16.70 for Large Goods Vehicles (LGVs). RHA chief executive Richard Burnett is concerned what affect the changes will have on traffic management, saying:

“Hauliers operate to very tight margins so any measures to reduce their costs is welcome. The eventual removal of tolls will be a tremendous boost to the local businesses and haulage firms who rely these major routes. However, the inevitable increase in traffic will put a big strain on the current infrastructure. Hauliers and businesses need strong reassurance that, as the deadline for the end of tolls approaches, the necessary steps needed to maintain smooth traffic flow are put in place as a matter of urgency. If the roads can’t cope then any potential savings will be in vain.”