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“Abolish bridge tolls” says small business federation

Temperatures are apparently rising among the small business community over tolls charged to use the major river crossings in England and Wales. Although not all businesses are affected, the Federation of Small Businesses wants road tolls abolished in England and Wales, following the lead of the Scottish Executive.

“After years of FSB lobbying, the Scottish government abolished bridge tolls on the Tay and Forth bridges, meaning there are no longer tolls on any Scottish bridges. This followed the abolition of the Skye Bridge toll in 2004. The move has been seen as helping to even things out between firms (and local communities) that previously had to use the bridges and those that didn’t, and tolls had been seen as a barrier to business and a tax on enterprise.

“The issue is likely to step up a gear following the FSB’s National Conference in Newport, Wales in March. Not only will many delegates ‘sample’ one of the most contentious tolls themselves – it now costs £5.40 per car to drive over the Severn bridges into Wales, with the charge only payable when you drive westwards from England – but the Welsh Policy Team aims to carry out research in conjunction with Aberystwyth University, to determine whether the Severn tolls are having an economic impact on Wales.

“Meanwhile, people in South Wales are continuing to rebel against tolls on bridges, with businesses in South and West Wales at a disadvantage compared with their counterparts on the Bristol side of the Severn. The FSB’s South Wales region wants to highlight the impact of tolls, especially given the reliance of their country on tourism and logistics, with the decline in traditional heavy industry – and the dependence on the Severn bridge for much economic activity.

“Chris Glen, FSB transport committee chair, said: ‘Transport presents a significant cost for small businesses and it is essential that the government finds ways to relieve this burden to increase competitiveness. ‘The FSB urges the government to follow the Scottish example and legislate to abolish tolls on bridges, tunnels and crossings, where there are no toll-free alternatives. This move would free up businesses to grow and create more jobs. The resulting economic growth would generate more funds for the government to spend on more and better roads. It should be a priority.’ “

The Welsh business people have a point, but…

The added transport costs due to the tolls are reflected in rents and land prices. There is a lot to be said for getting rid of tolls but the money saved by the businesses will quickly be reflected in rising rentals. In fact, the rents can be expected to rise by precisely the amount of the toll that will no longer have to be paid, in what will be a text-book example of the workings of Ricardo’s Law of Rent. If there is no system of land value taxation in place, along the lines we advocate, abolishing the tolls is just a hand-out to landowners. What’s the point?

Link to FSB web page