The Government is facing demands to throw a lifeline to local firms by freezing toll payments for the Severn bridges.

Hauliers have backed the 'freeze charges' plea by Newport MP Jessica Morden after the disclosure that one company in the city, Owens Road Services, is paying £200,000 a year in toll charges.

The Welsh Affairs Select committee, chaired by Monmouth MP David Davies, has been told that toll payments were a factor in persuading one firm of hauliers to move to England and that other companies may follow.

"It has caused a huge problem for the workforce," Denise Lovering, director of Caerphilly-based Glenside Commercials, told the MPs.

She said toll charge payments was 'one charge we cannot pass on'.

Ian Gallagher, policy affairs manager of the Freight Transport Association, representing 14,000 companies in the UK, said companies facing a decision now on whether to locate to Wales would "more than likely" opt to locate in England instead.

MPs were told that, with the retail price index already exceeding five per cent this year, firms 'can only brace themselves for a substantial increase again in 2011'.

"It is for this reason that the Freight Transport Association recommends that Government freeze the expected toll increase in 2011", the committee told MPs.

"Business in South Wales has been vocal in its concern over this issue," the FTA said.

"Like the rest of the UK, Wales has also been affected by the economic downturn, therefore it is imperative that this regional economy is not further disadvantaged as a result of high, inflexible infrastructure charges which competitors in the rest of the UK do not necessarily have to consider when they tender for business."

MPs also voiced criticism that hand held readers, introduced for the Ryder Cup to allow motorists to make debit and credit card payments had been withdrawn. It had been hoped the temporary move would remain until the technology for permanent card payments was installed.

Mr Davies said: "I am disappointed this has been taken away. We were given the indication they would keep it going."