§ 9. Mr. Crispin Blunt (Reigate)
What assessment he has made of the effect of the road fuel duty escalator on (a) economic growth and (b) Government revenue in each of the next five years. 
§ The Economic Secretary to the Treasury (Ms Patricia Hewitt)
The Government are committed to ensuring that economic growth takes place in a sustainable way that respects the environment and is fair to future generations. The fuel duty escalator—which we inherited from the previous Government—is an important element of a package of tax measures that will contribute towards the aim of achieving economic growth while protecting and, where possible, enhancing the environment.
The revenue gained from the escalator in the next three financial years is shown in the March 1999 "Financial Statement and Budget Report".
§ Mr. Blunt
I am afraid that that answer treated my question with the same contempt received by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) and my hon. Friend the Member for Guildford (Mr. St. Aubyn), who made specific requests for information and found that none was forthcoming. Has the Treasury team not worked out that the purpose of an escalator is to accelerate one's movement from one floor to another? Why are they behaving like a group of demented four-year-olds, out of control in a department store—
§ Mr. Blunt
Why are the Treasury team taking the rest of the economy—the grown-up economy—way past any sensible destination and inflicting enormous damage on our rail freight industry? The only things that will be getting a lift from the ridiculous decision to stay on the escalator way past any sensible point will be our goods on foreign-owned trucks.
§ Ms Hewitt
I am a little puzzled by the hon. Gentleman's question. The previous Government introduced the fuel duty escalator, the effect of which, by 2010, will be to save between 2 million and 5 million tonnes of carbon annually—a measure that was in the green manifesto on which the hon. Gentleman stood for election. As the Budget report clearly set out, the revenue raised in the current year from the fuel duty escalator—which we inherited from the Conservative Government—is £1.7 billion. The Conservative party, which voted against the measure, needs to tell us how it would replace that hole in the public finances and how it would meet the Kyoto targets to which it was committed in government.
§ Mr. Peter Snape (West Bromwich, East)
Does my hon. Friend not think it remarkable that, in 1993—when the fuel tax escalator was introduced—the hon. Member for Reigate (Mr. Blunt) was not only a failed Tory candidate in West Bromwich, but a political adviser to a former Tory Transport Minister?
Is it not the case that three inquiries conducted under the previous Conservative Administration all concluded that heavy goods vehicles did not meet their true track costs? Is it not also a fact that rail freight, which the hon. Gentleman mentioned for some bizarre reason, has increased by 15 per cent. in the past year? He has rather made a fool of himself there.
Is it not a pity that Conservative Members not only have failed to condemn the illegal activities of certain truckers, but apparently support those truckers in their demands, 410 which would appear to be for British social costs and French diesel prices? Will my hon. Friend make it plain that those demands are impossible and that, as long as those activities continue, there can be no question of the escalator being reconsidered?
§ Ms Hewitt
I am grateful to my hon. Friend, who has made his point extremely well. He reminds me of the remarks of the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), who rightly said that hon. Members who support the Kyoto targets, as the previous Government did, but refuse to support the road fuel duty escalator, are sailing dangerously close to hypocrisy.
I must not apply that comment specifically to the hon. Member for Reigate (Mr. Blunt), and of course I will not do so, but I emphasise the fact that the road fuel duty escalator plays a vital part, under this Government as under the previous Government, in ensuring that we meet our environmental targets and have a balanced and integrated transport policy.
§ Mr. John Whittingdale (Maldon and East Chelmsford)
Is the Minister aware that many small haulage firms are becoming desperate, as they are now only weeks away from bankruptcy? Her answer, that the Government intend to continue with the escalator until 2010, will simply increase that despair. Does she understand that more and more people feel that the Government's road haulage forum is a waste of time, given their refusal to abandon the fuel escalator or the increase in excise duty? Will the Government commission a full independent report specifically on the competitiveness of the industry, and give an undertaking to act on it?
§ Ms Hewitt
I hope very much that the hon. Gentleman will support our policy of discussion with the industry, rather than the policy of disruption pursued by some of the hauliers. The road haulage forum is proving an extremely useful venue for serious and constructive discussions with the industry—something that the previous Government did not undertake—and of course we are considering the industry's competitiveness.
In the Budget, we widened the differential between the duty on diesel and on ultra-low-sulphur diesel, which is set to take almost 100 per cent. of the diesel market; we cut corporation tax for small companies; we reduced employers' national -insurance; and we introduced a new starting rate of 10p for small companies. All those measures will help the industry.
There is a problem regarding fuel efficiency and overcapacity in the industry, and the best British road haulage fleets are almost twice as fuel-efficient as the worst. We need to address that issue, and the road fuel duty escalator gives exactly the right incentives to the industry to improve its fuel efficiency.