HC Deb 25 February 1999 vol 326 cc524-6
2. Mr. Christopher Gill (Ludlow)

What assessment he has made of the effect upon the competitiveness of British industry of (i) United Kingdom transport costs and (ii) those relative to those of continental Europe. [71593]

Madam Speaker

I am going to ask the hon. Gentleman to read out his substantive question so that it will be recorded correctly.

Mr. Gill

Thank you, Madam Speaker. My question was correctly recorded in the Vote a fortnight ago, but it has been altered subsequently. It should read: "What assessment he has made of the effect upon the competitiveness of British industry of United Kingdom transport costs relative to those of continental Europe."

The Minister for Energy and Industry (Mr. John Battle)

The Government recognise that transport costs can be a significant factor in the competitiveness of some sectors, and comparisons have been made. My right hon. Friend the Deputy Prime Minister set out the Government's strategy for supporting economic growth through an improved and more efficient transport system in his White Paper, "A New Deal for Transport", which was published last year, and I am sure that the hon. Gentleman will have read it.

Mr. Gill

The House will have noted that totally inadequate response. It can hardly have escaped the Minister's attention that 2,000 truckers massed outside the House of Commons yesterday to try to draw the Government's attention to their problems—problems that will not be solved by the integrated transport system. The difficulties are occasioned by the fact that truckers pay so much more for fuel and excise duty in the UK than their counterparts pay on the continent. Is the Minister aware that truck drivers can fill their tanks for £200 less per tankful of diesel on the continent than they must pay in the UK? Is he further aware that the continental hauliers against whom the British trucker is competing can employ two east European drivers for the price of one British driver? What is he going to do about that particular problem? The truckers will not be fobbed off by the pathetic answer the Minister has given.

Mr. Battle

The hon. Gentleman, and the industry as a whole, might look to issues wider than the direct costs—indeed I know that the industry does so—because the overall tax burden on the haulage industry is less than the European Union average. The industry here pays lower corporation taxes, lower employment taxes and lower social costs than it would in any other European country.

I know about the demonstration that took place outside the House yesterday, and I note that the director general of the Road Haulage Association Ltd is none other than Mr. Norris, the former MP for Epping Forest. I seem to recall that, as Minister for Transport in London, he contributed to the disintegration of transport policy—remember his lines about those dreadful people who travel on public transport? Our Labour Government are introducing policies to integrate public road, rail, and vehicle transport in this country. It was the Opposition, when they were in government, who undermined the competitiveness of British industry; we are setting it on the right road.

Mr. Barry Sheerman (Huddersfield)

My hon. Friend will hear a lot of special pleading as we run up to the Budget, but will he bear in mind the fact that we have an effective haulage industry in this country? The industry is competitive and very good logistically, and I hope that he will not take too much notice either of the question put by the hon. Member for Ludlow (Mr. Gill) or of the demonstration yesterday.

Mr. Battle

I appreciate my hon. Friend's remarks and should like to point out that we have a good working relationship with the haulage industry. The industry endorsed our intentions to improve enforcement throughout the industry, through improvements in the efficiency of enforcement agencies and by considering the introduction of modern information technology systems to allow better co-ordination. The industry has been constructive in helping us to formulate proposals for hauliers in a competitive regime that will be fair and honest and will lead to reduced congestion, improved delivery times, efficiencies and profitability. That is the whole point of an integrated transport policy. The haulage industry realises that; it is only the Conservatives who have not yet caught on.

Mr. David Heath (Somerton and Frome)

Is the Minister as alarmed as I am to hear Conservative Members calling for tax harmonisation? Does he recognise that many small haulage operators are facing a difficult period, with competition from continental European operators who are coming into Britain and taking British haulage jobs? Will he consider whether, without abandoning the quite proper environmental basis for Government policy, he can reach agreements with other European countries on fuel tax convergence, to ensure that we have a fair playing field for this important industry?

Mr. Battle

The hon. Gentleman puts the point well, but I cannot speak for the contradictions that emerge from the Conservatives. I agree that it is important that the rules of the European Union be applied equitably and fairly throughout the whole of the EU and are applied to all on a level playing field. We shall do our best to ensure that that happens.

I would add that it is right that there should be a balance between the amount paid by the industry in dues and environmental responsibilities. We cannot unlink those responsibilities; the industry realises that taking its environmental responsibilities and its social obligations seriously is an important part of building and maintaining a competitive edge nowadays. I cannot understand why Conservative Members hanker after a single instrument all the time; they seem to be so locked in the past that they have not caught up with the agenda.

Mr. Denis MacShane (Rotherham)

Is the Minister aware that trucking companies on the continent admire the flexibility of their counterparts in the United Kingdom? They admire the fact that, because of the national health service, United Kingdom companies do not have to pay extra social costs and they would welcome the corporation and other taxes that apply in this country. The hon. Member for Somerton and Frome (Mr. Heath)—if I may go off message briefly—is quite right: we need harmonisation of these duties in Europe. If the Conservative party is now officially the party of harmonisation, I, for one, welcome it.

Mr. Battle

Until 9 March, there is a kind of ministerial purdah preventing comment on tax and changes in duties. I must admit—in all honesty and in the privacy of this quiet room—that I do not know what is in the Budget. Changes in fuel duty will obviously be a matter for the Chancellor, but I am sure that he will take notice of all representations made to him—including those from hon. Members.

Mr. Jeffrey Donaldson (Lagan Valley)

In developing an integrated transport strategy for the United Kingdom, the Minister will be aware of the tremendous burden of the transport costs that apply to businesses in peripheral regions, such as Northern Ireland. Will the Minister clarify what consideration has been given to peripheral regions of the United Kingdom in developing an integrated transport strategy?

Mr. Battle

The hon. Gentleman raises an important point. If he reads "A New Deal for Transport", which was published by my right hon. Friend the Deputy Prime Minister, he will find that rural areas and the regions—Northern Ireland, Wales and Scotland—feature in that report.

It is important to ensure that "integrated" means the whole of these islands. We must have systems that work, not just for road but for rail. There will be an announcement today about our attempts to sort out the mess in the rail industry that we inherited from the Conservatives. We must ensure that road, rail, public and private transport and the haulage industry are integrated properly. That means having a decent system: ensuring that roads are maintained properly and so on and that the regions and outlying and rural areas are not discounted from the equation. It is not just an urban integrated transport strategy, but a strategy for the whole of Britain.