HC Deb 09 May 2002 vol 385 cc394-400

8 pm

Mr. Christopher Chope (Christchurch)

I beg to move amendment No. 32, in page 106, line 35, at end insert— 'provided that the charge shall be payable in respect of every lorry using a public road in the United Kingdom irrespective of the country in which such lorry is registered.'.

The Second Deputy Chairman

I gather that it will be for the convenience of the Committee if we discuss the following amendments together: No. 30, in page 106, line 35, at end inserts— '(2A) The rates at which lorry road-user charge shall be payable shall be determined so that the total of road user charge, vehicle excise duty applicable to lorries and fuel duty raised from lorries shall not exceed the total of vehicle excise duty and fuel duty raised from lorries in the year 2002–03 subject to indexation up to the year of introduction.'. No. 31, in page 106, line 35, at end insert— '(2B) Lorry road user charge shall be brought into effect no later than the commencement of the financial year 2006–07.'.

Mr. Chope

I am sure that it will be for the convenience of the Committee to consider the amendments together. They have been drafted to give the Government an opportunity to expand on the rather bland statement that the Chancellor made in his Budget statement. He said: Hauliers from overseas should pay their fair share towards the cost of using our roads". So say all of us.

The Government rejected our proposals for a Brit disc, but they are now coming forward with their own proposals. However, clause 134 contains no reference to hauliers from overseas, to foreign lorries or to anything like that. [Interruption.] The Financial Secretary says that there is a good reason for that, and we shall have the opportunity to hear the explanation shortly. That is what amendment No. 32 is all about.

We welcome the fact that the Government have accepted the principle of a Brit disc that was outlined in our manifesto at the last general election. We recognise that, under European law, the maximum penalty on foreign hauliers is only about £750, whereas the tax differential between a French lorry and a UK-operated lorry is about £12,000. What the Government have in mind in the clause could do much more to bridge the gap than could be done merely by the introduction of a Euro vignette.

I hope that the Financial Secretary will also be able to address the concerns that prompted amendment No. 30. It is a reflection of the fact that the Chancellor also said in the Budget statement that there would be a road user charge for lorries that is distance-based, with offsetting tax cuts for the UK haulage industry."—[Official Report, 17 April 2002; Vol. 382, c. 583–4.] Amendment No. 30 would put that proposal into the Bill.

It is not just today's proceedings that have caused Conservative Members to be rather suspicious about the Government's assertions and promises and about the words of some Ministers. We have cause to reflect on what happened with the climate change levy. The Government promised an offsetting reduction in national insurance for employers but, in the Budget, they have more than totally negated that reduction by their proposals for national insurance. Similarly, on the proposals for the aggregates tax, the goalposts were moved during the consultation with the industry.

Given that the discussion on this issue is likely to go on for some years, we want a guaranteed assurance from the Economic Secretary that the haulage industry in this country will not face additional costs. The only sure way of doing that is by putting such guarantees in the Bill.

Amendment No. 31 deals with the issue of when the proposals will come into effect. I understand that, at the consultation meeting that was held between the haulage industry and Ministers and Treasury officials, there was talk of the measure being introduced no later than spring 2006. However, the Government have tended to fail to deliver on their targets for the completion of such legislation. Because it is vital that our road haulage industry is allowed to compete on level terms with foreign hauliers, the Bill should contain the provision that the measure will be brought in no later than spring 2006. Some would say that that is far too late, but I understand that it would be complicated to introduce.

I hope that the Financial Secretary can explain how he will ensure that there is interoperability between foreign and British hauliers and the system that he has in mind for taxing lorries under the new regime. I also hope he will assure us that the commitment in the pre-Budget statement that there will be no net increase in taxation on truck operators in the UK will hold true. If he can explain how the proposal will be consistent with the Government's agenda for reducing and managing congestion on our roads when only one vehicle in 50 is a lorry, that would be a bonus. However, I fear that he will not want to explain why the Government think it right to have a charge for lorries that is based on their use of the road, but not to have a similar charge for motorists.

I hope that the amendments give the Committee the opportunity to discuss those important issues. Come 2006, there will be a complete transformation of the way in which the heavy goods vehicles on our roads are taxed. That will be to the benefit of the road haulage industry, but it needs some reassurances, which I hope the Financial Secretary will provide.

Mr. Edward Davey

I want the Financial Secretary to assure us that the clause is necessary simply to allow the Government to spend the money that is needed to have a viable operational scheme for lorry road-user charges. Once that is determined, I expect the Government to include the details of tax legislation in a future Finance Bill for the House to scrutinise. If the right hon. Gentleman can give hon. Members those two reassurances, we can proceed, hopefully to the Adjournment.

Chris Grayling

I want to put a different slant on the hon. Gentleman's comments. The issue is far greater than taxation. It represents a major change for the UK. For the first time, long-distance road pricing is coming into effect alongside the various plans that exist for congestion charging. It involves significant technology changes for our road industry and has significant implications for the Government's transport strategy. I hope that the Financial Secretary can reassure us that this is a piece of enabling legislation that will not preclude a full and substantive debate about the transport industry and the place of road haulage in that. I think that the right hon. Gentleman is nodding, and I am happy to receive that assurance.

I also hope the right hon. Gentleman can reassure us that the Government intend the measure to be revenue neutral. It must not be a way of introducing stealth taxes on the haulage industry. I am happy to give way if the Minister wants to intervene. I can see that he is keen to wind up the debate, but this is an important issue and it should not be nodded through because it is late on a Thursday evening.

Fundamental issues are at stake. The Government's proposals have implications for rail freight and for the roads that are not encompassed by the scheme and the traffic that uses them. They come at a time when the Commission for Integrated Transport has recommended a more wide-ranging and all-encompassing scheme. I want the right hon. Gentleman to assure me that the Government will not attempt to use the legislation to railroad through a measure that is taken in isolation from the rest of their transport policy.

Mr. Boateng

Clause 134 fulfils our manifesto commitment to make sure that lorry operators contribute to costs when using United Kingdom roads, regardless of their nationality. It has been widely consulted on and has been warmly welcomed by the industry. I have listened to the arguments behind the Opposition amendments, which are unconvincing and wholly misconceived. However, I shall briefly address their aims.

It would be wrong to commit ourselves to a fixed date by which the proposals are to be implemented, as the hon. Member for Christchurch (Mr. Chope) suggested, partly for the reasons given by the Liberal Democrat spokesman. We need to be sure that we tackle complicated issues of compatibility in a way favourable to Britain's competitive interests and the interests of the haulage industry. We have therefore chosen to proceed with enabling legislation, which, in all probability, will become law in future Finance Bills. We shall bring those matters before Parliament again when they have received the technical and other consideration that they deserve and when we have developed a successful scheme; the Committee should unite on that outcome.

We shall introduce a distance-based lorry road-user charge that will apply to lorry operators working in the UK regardless of their nationality. We have made it clear that the introduction of the new charge will not increase taxes for the UK haulage industry in recognition of the fact that it already contributes towards costs that it imposes on the UK. The Government will therefore introduce offsetting tax reductions when the new charge is introduced.

It would be grossly irresponsible of the Committee to seek to bind the Chancellor in future Budgets, as amendment No. 30 seeks to do. We recognise the fact that the UK haulage industry already contributes towards the costs that it imposes on the UK, and will introduce offsetting tax reductions when the new charge is introduced. That is a clear and unequivocal commitment, which the road haulage industry well understands. In amendment No. 32, the Opposition have misunderstood the nature of our proposals and the complexity of the task in hand. It is not desirable to seek to commit the Government to charge every lorry using every public road. We shall ensure that the industry and key stakeholders are all involved before making a final decision. There is a strong case for charging every lorry using every public road, but a decision should be made only after consultation with the industry and stakeholders. I hope that, as a result of my assurances, the Committee, having considered the matter fully, will give the clause a fair wind.

Chris Grayling


Mr. Boateng

I fear that more wind is blowing in our direction.

Chris Grayling

The Minister said that the road haulage industry welcomed the proposals. However, it has said that it is extremely anxious about the time that it may take to introduce such as scheme. In the absence of a scheme, it faces several years of continuing competitive disadvantage. Can he provide reassurance on that point?

Mr. Boateng

The industry has said no such thing; it says that it is important to get the scheme right because we must ensure that it maintains its competitiveness. It welcomes the close working relationship that it has enjoyed with the Government since 1997. We would drive a coach and horses through that if we accepted any of the Opposition's amendments. I do not intend to do so, and I urge the Committee to reject the amendments, should the Opposition be foolish enough to put them to a vote.

Mr. Chope

The Financial Secretary blusters too much. His explanation implied that some foreign lorries may not be subject to the charge. Why should that happen? It could happen if there were no reciprocal arrangement and no requirements for interoperability. Some foreign lorries that do not have the necessary technological equipment on board and which could not be made subject to the charge would be able to continue to use our roads, in competition with our own hauliers, without having to pay towards the cost of those roads.

8.15 pm

The fact that the Minister is not prepared to accept amendment No. 32 must ring alarm bells in the British haulage industry. It will lead hauliers to believe that although the Chancellor says that hauliers from overseas should pay their fair share, the Financial Secretary is not prepared to commit himself to ensuring that all foreign lorries will be subject to such a charge. I find his response on that extremely unsatisfactory and probably rather revealing.

The Financial Secretary says that there will be offsetting tax reductions—a suitably vague expression. It is very hard to hold somebody to account for breaking a commitment to providing offsetting tax reductions. The Whip on the Treasury Bench smiles knowingly, but such language is so much part of new Labour. The Government say something that is designed to give the impression that the road haulage industry will not suffer any additional tax as a result of the measure, but they are using words that will enable them to wriggle later and use the measure to impose those very taxes.

When we see the Government's record, is it any surprise that we are suspicious? That is why we drafted an amendment that sets out precisely in legal terms what the Financial Secretary said to the hauliers at his meeting with them in January this year: that there would not be any additional costs for them, compared with the existing duty regime. The Financial Secretary shakes his head, but I am told that that is what was said at that meeting.

Amendment No. 30 gives the Financial Secretary the opportunity to put on the record and in legislation the terms of his commitment. He is right—it would bind his successors. However, if a commitment is made to a major reform such as this, which necessitates the co-operation of the road haulage industry, it is important that that should be carried forward on the basis of mutual trust. What the right hon. Gentleman said in response to the arguments in support of amendment No. 30 will not have enhanced that trust and will make the haulage industry much more suspicious.

I hope the Financial Secretary will recognise that what he said tonight will not have increased the trust between the road haulage industry and the Government. I hope that he will subsequently be able to put that right.

Mr. Boateng

Everything that we have said tonight is consistent with what we have shared with the road haulage industry over many, many months. Our commitment is to its competitiveness and to ensuring that we get a scheme that delivers to the industry what it seeks—equal, fair treatment with foreign road hauliers. That was our manifesto commitment, and our proposal will deliver it practically and in a way that enhances and strengthens the competitiveness of the road haulage industry, which does a great job for the country and which has widely welcomed the proposal. With his contribution tonight, the hon. Member for Christchurch (Mr. Chope) has done nothing to enhance his own credibility and that of his party with the industry.

Mr. Chope

Why are we having a war of words about a matter that should be non-controversial? [Interruption.] My hon. Friends say that we may have to press the matter to a Division. When is the measure to be introduced? The Financial Secretary told the road haulage industry that it will be brought in by March 2006, yet he is not prepared to sign up to an amendment which states that that is the date by which it should be brought in.

Mr. Boateng

The measure could be brought in in 2005—as quickly as possible—[Interruption]

The Second Deputy Chairman


Mr. Chope

If that is the Financial Secretary's commitment, there is no reason why he should not accept amendment No. 31, which states that the measure should be brought into effect no later than the commencement of the financial year 2006–07. If he introduces the measure in the spring of 2005, so much the better.

It is symptomatic of the arrogance of this Government that they are not prepared to agree to these modest amendments. if it is not the will of the Committee to vote on them now, hon. Members may well wish to return to them at another stage. The Financial Secretary will then have a chance to reflect with the road haulage industry on the words that he has uttered tonight. When the industry has had a chance to work out what those words amount to, it may insist that we put the issue to the vote on Report, so that it can have the assurances that it seeks. Meanwhile I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 134 ordered to stand part of the Bill.

Bill (Clauses 4, 19, 23, 26 to 29, 87 to 92, 131 and 134 and Schedules Nos. 1, 5 and 38) reported, without amendment; to lie upon the Table.