My honourable friend the Minister of State for Transport (Stephen Ladyman) has made the following Ministerial Statement.

My right honourable friend the Secretary of State for Transport has today laid an order before Parliament to enable the revision of interest rates on the debt owed by the Humber Bridge Board to the Secretary of State. The debt represents borrowing from the Government for the construction of the Humber Bridge. The interest rate on the loan will be reduced from 7.75 per cent, currently payable on a portion of the debt, to 4.25 per cent payable on the entire debt.

The revised interest rate will apply from 1 April 2006 until 31 March 2011, at which time it will be reviewed. The rate of 4.25 per cent was chosen as this was the national loans fund rate as at 3 April 2006. Over the five-year period, the reduction in interest payable amounts to £16.6 million, which the Humber Bridge Board can use to fund maintenance or repay capital debt. The reduction in interest payments will be reported in the Department for Transport's accounts each year over the five-year period.

The rate has been revised to reflect more closely current interest rates and to allow the Humber Bridge Board to repay the debt within the agreed loan period (until 2038) without recourse to levying a precept on the local taxpayers of Humberside.

The debt was last restructured in 1998, when an interest rate of 7.75 per cent was set, although interest was not payable on a suspended part of the total debt. These arrangements were set out in the 1998 loan agreement and the Humber Bridge (Debts) Act 1998. In 2006 the Humber Bridge Board approached the Department for Transport advising that the debt would become unmanageable from 2007-08 at the 7.75 per cent interest rate. This was because traffic growth had not met the levels predicted in 1998 and because of previously unforeseen major maintenance work required.

A revised loan agreement between the Secretary of State and the Humber Bridge Board was signed on 13 June 2007, replacing the 1998 loan agreement. It is dependent on the coming into force of the Humber Bridge (Debts) Order 2007. The order is made under the Humber Bridge (Debts) Act 1996.

The total debt owed by the Humber Bridge Board to the Secretary of State was £334,437,000 as at 1 April 2006.