HL Deb 17 January 2005 vol 668 cc538-40

3 p.m.

Earl Attlee My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I remind the House of my interest as president of the Heavy Transport Association.

The Question was as follows:

To ask Her Majesty's Government what alternatives there are to their proposed lorry road-user charging scheme to deal with the problem of lorries using lower-taxed foreign fuel on United Kingdom roads.

Lord Davies of Oldham

My Lords, the Government recognise concerns within the haulage industry about its competitiveness and are committed to ensuring that all lorries using UK roads pay their fair share.

Consultation responses in 2001 endorsed a proposal to introduce a distance-based lorry road-user charge with offsetting tax cuts. In developing options in consultation with hauliers' representatives, none has been found which achieves the objective of modernising the taxation of the UK haulage industry more effectively.

Earl Attlee

My Lords, I thank the Minister for that reply. Irrespective of the lorry road-user charging scheme, surely it must be desirable for all HGV mileage covered in the UK to be done with UK tax and duty paid fuel. What would be the effect of requiring all heavy goods vehicles leaving the United Kingdom to do so with a nearly full tank of fuel?

Lord Davies of Oldham

My Lords, I congratulate the noble Earl on an interesting and innovative proposal. Let me say first that he will recognise that we have been involved in consultation with the industry over many years, which has formed the basis of the proposals we are now putting forward. However, I shall take steps to ensure that his constructive suggestion is put before Customs and Excise, which is the section of the Treasury concerned with these issues.

Viscount Astor

My Lords, can the Minister confirm that the proposed lorry road-user charging scheme will be implemented by a satellite tracking system? If so, how will it work? Has it been tested? Further, is such a system being used in any other EU country?

Lord Davies of Oldham

My Lords, a range of technologies is available. Satellite tracking is being used by the Germans to administer their lorry road user charge, although only lorries using the autobahn network are charged. In Britain we shall be charging for all road use in the country. At present we have not committed ourselves to this particular technology. It is currently undergoing tests and is being discussed. However, I can assure the noble Viscount that we intend to introduce a technology that is safe and secure and which charges all lorries—including all foreign lorries—for their use of our road system.

Lord Tebbit

My Lords, would not the easiest way to ensure that all lorries leave the country with an almost full tank of fuel be to reduce fuel excise duty to the levels of those on the Continent?

Lord Davies of Oldham

My Lords, that would still not impose any extra cost on foreign lorry drivers for their use of British roads. We are concerned about this because lorries incur high costs in terms of road maintenance and development and it is only right that the foreign road user should meet the full and proper costs involved. The noble Lord's suggestion is, therefore, not quite as constructive as that of the noble Earl, Lord Attlee, which was directed towards the recoupment of some of those costs.

Lord Faulkner of Worcester

My Lords, can my noble friend confirm that the Government's intention is still to carry as many goods as possible by rail rather than road and that they seek to achieve a modal switch in that way? Therefore, a proposal along the lines of that put forward by the noble Earl, Lord Attlee, is worth looking at if it would reduce some of the cross-subsidies that lorry drivers, in particular foreign lorry drivers, presently enjoy.

Lord Davies of Oldham

My Lords, that is exactly why I gave what I hope was a helpful initial response to the noble Earl, Lord Attlee. We are concerned to tackle the issue of the unfair advantages presently enjoyed by foreign lorries in the form of cheaper fuel and no additional costs at all made for the use of British roads, except for a small number of toll charges. This must be dealt with and, as my noble friend indicated, it would also have the effect of ensuring that the road haulage industry meets the full costs, thereby making the relationship between road and rail transport fairer.

Lord Bradshaw

My Lords, perhaps I may draw the Minister's attention to one other point. Lorries fitted with very large or double fuel tanks constitute a huge safety risk both at sea and on the roads. Is the Minister aware that when they spill their large loads of diesel oil in road collisions, that is almost always very injurious to motorcyclists? Can he please assure the House that the scheme for lorry road-user charging will be prosecuted very quickly? There are many reasons why it is necessary.

Lord Davies of Oldham

My Lords, the technical implications of the scheme and the technology required to implement it will take a bit of time to take effect. Therefore, it will be a little while before the scheme is fully in place. However, one reason for introducing the scheme is to counteract the kind of circumstance described by the noble Lord. It is certainly the case that some lorries are arriving in this country with excessively large fuel tanks attached— much larger than those normally fitted on their British counterparts—in order to benefit by purchasing fuel only when abroad and are not buying it in this country at all. That abuse needs to be tackled.

Lord Dubs

My Lords, is my noble friend aware that most lorries based in Northern Ireland fill up in the Republic? In looking at how he might move forward on the proposal made by the noble Earl, Lord Attlee, will he bear in mind that the situation in Northern Ireland is particularly different? The Treasury is losing quite a lot of money because of it.

Lord Davies of Oldham

My Lords, that point does need to be borne in mind when considering the suggestion of the noble Earl, Lord Attlee. But the beauty of the scheme to which we are committed thus far and on which we have engaged in the most intensive consultation is that once a lorry uses British roads— that is, those of Britain and Northern Ireland—it would be subject to the user charge.

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