Road Haulage Industry

HC Deb 17 September 2003 vol 410 cc245-63WH

Motion made, and Question proposed, That the sitting be now adjourned.— [Mr. Ainger.]

9.30 am

Jim Sheridan (West Renfrewshire)

I am delighted to have secured this debate on some of the most important issues relating to the road haulage industry and the difficulties that it is facing. Perhaps it would be helpful at this stage to give a brief history of organisations such as the Road Haulage Association, which I have been speaking to during my research into the issues.

The RHA was formed in 1945 to look after the interests of haulage contractors in various parts of the country and, in effect, it amalgamated local organisations that had been established previously. It has subsequently developed to become the primary trade association representing the hire or reward sector of the road transport industry. Some 10,000 companies are now members of the association and they vary from major concerns with more than 5,000 vehicles to single owner-drivers.

The purpose of this debate is to highlight the issues facing the road haulage industry that arise from the Government's policies and the consequences for the future of the industry. This debate is not about hauliers having a moan and a whinge. British manufacturers are equally concerned that the high cost of transportation is a major factor in undermining their ability to compete in European and world markets. Indeed, many of them are struggling to compete in our home market.

I want to raise a number of general issues, including fuel costs, foreign competition, proposed lorry road-user charging and, perhaps most importantly, the proposed implementation of the working time directive on the road transport sector, which will be implemented in March 2005. The Government have expressed a genuine interest in working with all interested parties in the transport industry, including employers, employees and employees' representatives, such as the Transport and General Workers Union, of which I am a longstanding member. The Government's 10-year plan for England and Wales is the first long-term plan for transport policy in the United Kingdom for more than 30 years and it represents an important and welcome departure from the previous Administration's stop-start treatment of transport investment. It was warmly welcomed by the industry when it was published in July 2000, and perhaps lessons can be learned from such transport policy and rolled out throughout the UK.

Under the 10-year plan, the industry has a route map of overall spending, infrastructure and, perhaps most importantly, deliverables. It provides a context in which companies can make strategic, long-term decisions about the structure of their supply chains, establish long-term business plans and make significant investments in distribution and logistics. It would help the industry greatly, however, if the contract arrangements with customers could be extended to a minimum of five years. That would allow transport companies to plan effectively for the future and to offer their employees limited security. The contracts are currently for one year or for two to three years. Very few run for the full five-year term, although the industry would appreciate that degree of stability.

You will be aware, Mr. Deputy Speaker, of the industry's long-running and, at times, controversial campaign to reduce fuel costs. The European Commission's transport White Paper recommended that commercial road transport uses should be harmonised wherever possible to avoid distortions of competition and the taxation of fuel. The industry would support any action that could achieve that. However, there is recognition that it is unlikely that such a reduction will take place immediately throughout the United Kingdom because of the costs involved.

Mr. David Marshall (Glasgow, Shettleston)

I am grateful to my hon. Friend for giving way and congratulate him on securing this important debate. Does he have any information about what the reduction or the increase in fuel taxation on British HGV operations would be if harmonisation throughout the European Union were to be obtained?

Jim Sheridan

I do not know the precise figure—the Treasury would be more able to answer my hon. Friend's question—but the road haulage industry is considering the possibility of at least a freeze, especially on diesel, for the next few years. That would go a long way to harmonising fuel costs throughout the EU. There is a realisation among the road haulage industry that taxes in this country help to pay for the public services that so many of us enjoy. The haulage industry is no different from anyone else in recognising that there is a price to be paid for public services. Again, however, I emphasise that it would be greatly appreciated if this Government could do something to bring about harmonisation of fuel costs throughout Europe.

Mr. Christopher Chope (Christchurch)

Is the hon. Gentleman going to say anything about the threat that the road haulage industry faces of a further increase in road fuel duty from about 1 October this year, following the Chancellor's remarks in his spring Budget?

Jim Sheridan

I have no intention today of touching on what the Chancellor does, or proposes to do or not to do, in the forthcoming Budget. The RHA has told me that it is not overly concerned about the Chancellor's forthcoming plans. Certainly, it has not raised any concerns with me.

Mr. Chope

Has the hon. Gentleman seen the September 2003 edition of Roadway, published by the RHA? The whole front page is devoted to a public wealth warning on this issue.

Jim Sheridan

I have not seen the article to which the hon. Gentleman refers. Any reduction in fuel costs for the industry would be greatly appreciated. I and others will be advocating to the Treasury the fact that any assistance in reducing fuel costs would be extremely helpful to this important industry. However, I emphasise that it must be recognised that there has to be a certain amount of taxation to keep the required public services. Creating that balance is important.

The industry's problems with fuel costs have been further compounded by oil companies and their distributors changing the terms and conditions of the sale of fuel to some transport companies. There is anecdotal evidence that hauliers, particularly the small ones—the most important ones—are experiencing significant difficulties with changes in how the oil companies and their distributors operate.

A Scottish haulier almost went out of business when fuel giant Shell slashed his credit terms from £60,000 to zero in just 10 days. He has been a Shell customer for almost 30 years and he spends about £300,000 a year on diesel, but Shell ordered him to provide accounts before he could buy any more fuel on credit, even though he had never previously been asked for that. When he explained that he could not comply with that instruction because his accounts were with his accountant, Shell refused to sell him any more diesel. Consequently, his wagons were laid up, as he had no fuel to drive them. Those actions could be understood if the haulier had reneged on payments or if a cheque had bounced—we might then see the sense of it—but Shell left him high and dry and with no alternative. The RHA has received many similar complaints about oil companies from its other members.

Mr. John Lyons (Strathkelvin and Bearsden)

Does my hon. Friend accept that this type of practice will be a threat to small, family-run businesses if it develops more widely in the industry? We need to do something to protect them.

Jim Sheridan

My hon. Friend raises an important point. That practice will particularly affect single owner-drivers, who have nothing to fall back on when faced with that type of difficulty. The houses of many single owner-drivers are mortgaged on their businesses, so when companies such as Shell behave in this way it threatens not only the businesses of single owner-drivers, but their houses and livelihoods. That concerns many of them. It is a real problem for the industry, which is in bad enough shape already without fuel suppliers making life more difficult. I recognise that there are limits to the extent that the Government can influence how major companies and distributors operate, but the Minister's involvement in trying to influence their operating practice and how they deal with their valued customers would be welcome.

I now turn to the issue of unfair competition in the industry from some European businesses, many of which exploit their employees for cheap labour and have the capacity and the knowledge to circumvent the regulations surrounding road transport in Britain and those safeguarding British workers. The problem particularly involves the ever-growing number of eastern European drivers who use our roads without making any financial contribution to their upkeep and maintenance. I have written to the Secretary of State for Transport on the matter of continental drivers and the undermining of significant investment.

Mr. Marshall

Is my hon. Friend concerned, as I am sure many of us are, that after the addition of 10 new members to the EU at the end of the year, the situation will become much worse because there will be many more drivers from much poorer countries, which may have poorer standards of driving and driving tests, overloaded lorries and all the other problems associated with the industry? Does he agree that those difficulties will be exacerbated when those countries join the EU?

Jim Sheridan

My hon. Friend raises an important point, particularly as he has a long history of work and involvement in the transport industry and knows a great deal about it. He is right—the problem is ever increasing as many more eastern European drivers, for instance, come into the country. One can only hazard a guess at the standard of servicing and MOT applied to those lorries, how the workers are treated and whether the practices in some countries are undermining the profitability of the industry as well as the employment rights of British workers.

There is concern about continental drivers undermining the significant investment in ports such as the Rosyth container terminal in Dunfermline, which is a valuable route to mainland Europe for many of our hauliers. There is evidence that continental drivers frequently fill up their fuel tanks, including their reserve tanks, and drive the length and breadth of our country using cheap diesel purchased outside Britain. As someone who has used the Rosyth ferry alongside a number of my parliamentary colleagues, I was extremely disappointed by the fact that that route was used mainly by British drivers. However, I have spoken to my hon. Friend the Member for Dunfermline, West (Rachel Squire), in whose constituency the Rosyth ferry operates, and she informed me that the ferry is on the up and in good shape. I was extremely pleased to hear that.

I was also pleased to hear that the Secretary of State for Transport agreed that it was unfair that hauliers from outside Britain could use our roads without making any contribution to their maintenance and upkeep. That is why the Government are introducing the lorry road-user charging scheme, which will be applied to all lorries using our roads, although it is a little disappointing that the time scale for the charge's introduction means that it will not apply until 2006. I am concerned that some of our smaller hauliers could go out of business before that happens. I would welcome any assistance from the Minister in reducing that time scale.

The introduction of the LRUC scheme is probably a precursor to a wider programme embracing the motorist. Most organisations, such as the RHA, support the proposal in principle as the best way to level the playing field between the relatively high-taxed UK-based hauliers and their EU counterparts. They would welcome the offsetting of any reduction in fuel duty as the best way to ensure that, overall, total tax achieved through the LRUC scheme will remain the same. I would welcome the Minister's comments on that. There are concerns about the scheme's impact on the hire or reward sector of the road haulage industry. Again, I would welcome any further clarification.

The burning issue in the industry is the EU working time directive, which is due to be implemented in March 2005. While it is right and proper that British workers enjoy the same employment rights as their colleagues in Europe, the legislation has major implications for the industry in terms of human and financial resources. Initial reports estimate that an additional 60,000 drivers will be required to accommodate that new legislation. That could be a window of opportunity for the industry to become more representative of the communities that it serves by recruiting more women and ethnic minority workers. Currently, a vast proportion of lorry drivers are white middle-aged males.

The Minister will be aware of consultation between his Department and representatives of the industry on the implementation of the working time directive. I would like an update on where the consultations stand and when the consultative document will be published. I would welcome a clear definition of what constitutes a working day for the British worker. Will waiting time be calculated as being part of the working day?

I hope that I have reflected accurately the views and concerns of those who depend on the transport industry for their living. I look forward to hearing what the Minister has to say on the issues that I have raised.

Derek Conway (in the Chair)

Before I call the next Member to speak, I should say that there can sometimes be confusion about whether the person in the Chair should be called by name or addressed as Mr. Deputy Speaker. Some are Deputy Speakers, some are not—I am one of the "are nots". Addressing Deputy Speakers wrongly is not a capital offence, but those who are Deputy Speakers might get very upset while those who are not should be addressed by name. My surname will suffice.

If no other Member wishes to speak, we can move on to the Front-Bench contributions. I call Dr. Cable.

9.50 am

Dr. Vincent Cable (Twickenham)

I congratulate the hon. Member for West Renfrewshire (Jim Sheridan) on choosing the subject of today's debate. I regret that more Members have not taken advantage of the opportunity to participate, because it affects all our constituents. After the summer of discontent three years ago, none of us is likely to forget the importance of the road haulage industry; it has a key role in the national infrastructure.

I shall pick up on two of the key themes mentioned by the hon. Gentleman in his introductory presentation, and make a few other points. I start by talking about tax, a highly emotive matter that has dominated the national agenda in recent years. Recent diesel differentials have remained extremely large. The hon. Gentleman spoke about the matter in broad terms, but I can tell the Chamber that the United Kingdom diesel rate after tax is 81p a litre, whereas, in countries where lorries are loaded before they come to the UK, the rate is different. In Belgium, it is 49p; and in France, it is 57p.

The enormous differential presents two problems. The first, described by the hon. Gentleman, is that it affects the competitiveness of UK operators, because their basic input fuel is bought at a much higher price than that of their continental competitors. The second problem is the adverse effect on the UK economy as a whole. Large numbers of continental operators use British roads, and the heavier ones inflict serious damage on our roads. Maintenance costs are therefore higher, but those lorry owners make no contribution to our costs through their tax payments. Everyone accepts that that is fundamentally wrong and the problem needs to be addressed.

There is broad consensus on the way forward, and the various statements that the Government made in the Budget and, more recently, in May seem an entirely sensible way of dealing with the problem. All three parties accept the need for a road-user charge that should apply equally to foreign and British users. The charge should be applied in such a way that it does not involve additional costs for UK operators—the money should be rebated through either vehicle excise duty or fuel duty—but is paid by continental operators. That would go some way to levelling the playing field and providing a more rational economic basis for taxation.

The Government are right to have proposed a distance-based charge rather than a time-based one. That will give them the opportunity to apply charges that bear some relation to the environmental and social costs. The proposal currently applies to off-motorway as well as motorway use, and it would permit higher charges on the bigger, more damaging vehicles. That seems a sensible structure.

I would like the Minister to clarify two points. First, although I may have misunderstood the situation, I believe that there are difficulties in making the UK proposals compatible with EU regulation, so I want to check that that is not a problem. Secondly, there is some concern in the industry that the new distance-based charge, which is desirable in principle, may be difficult to apply because of the black-box technology required. The industry has asked the Government to help by setting standards. That would speed up the development of the necessary technology, which would not merely take the tachograph measurements but incorporate equipment for the new road charge and other technology to improve the performance of the UK industry. It would be useful to know how far advanced we are with that technology.

The second key issue raised by the hon. Member for West Renfrewshire was working conditions, including working time, which are important for two reasons. First, although people have different views about tough working standards and the extent to which they should be applied, it has been accepted for decades that road haulage is a special case because safety is an issue not simply for the employees, important though that is, but for the public. There have to be rigorous standards and they have to be enforced. Obviously, we are in favour of that.

The hon. Member for Glasgow, Shettleston (Mr. Marshall) rightly pointed out the second way in which road haulage is a special case. We are dealing not only with working conditions in the UK, which are subject to British rules, but with journeys that cross many borders. Standards across the European Union must therefore be consistent; otherwise they will not be enforced. There will be abuse, standards will fall and safety will suffer, affecting all of us. Whatever people might think about the desirability of tough Europe-wide standards in general, they must, emphatically, apply in the case of road haulage. We would fully support such an approach.

There is no fundamental disagreement about that point. There must be strong standards to maintain safety, and the approach used must involve the working time directive. The key point is that that will lead to a substantial need for additional manpower—if hours are reduced, more people are needed to do the same work—so there is a big recruitment issue, which means that there is also a training issue. Although we hear a great deal about the need for more plumbers and electricians, we do not often hear about the need for more long-distance lorry drivers. There needs to be more emphasis on vocational training to address the issue of labour supply. Has the Minister any views about that, and is there any industry-wide initiative comparable to that in the building industry, such as a levy-based system that would enable training needs to be met?

My final point is that I have read through the literature of the Road Haulage Association, which has a legitimate interest in its members. However, if we are considering freight as a whole, as represented by the Freight Transport Association, there is a bigger picture. Freight does not have to be carried by lorries. We know the sad story of the Post Office, which goes back some years. Probably the biggest planning application that ever confronted my constituency was a proposal to convert a big railway marshalling yard, the so-called Feltham marshalling yard, into a sorting office linked to road haulage, with the consequent abandonment of the rail link. Enormous social costs are being paid as a result of what was no doubt a correct commercial calculation by the Post Office. That decision has been replicated many times. It would be interesting to hear from the Minister about the Post Office's current role in freight, and about any support for the rail freight initiative through the Strategic Rail Authority.

I thank the hon. Member for West Renfrewshire for having initiated this important debate. We discovered three years ago that a great deal of complacency had set in with regard to the road haulage industry. That exploded in a politically damaging way through the blockades, so it is important to keep a close eye on the issues in the industry to ensure that that does not happen again.

9.58 am

Mr. Christopher Chope (Christchurch)

Likewise, I congratulate the hon. Member for Glasgow, Shettleston (Mr Marshall) on initiating the debate. It is a great disappointment to many of us that there have not been more participants because it is an important subject, which goes to the heart of the British economy.

Jim Sheridan

On a point of clarification, Mr. Conway. I am not from Glasgow, Shettleston; I am from West Renfrewshire.

Mr. Chope

I do apologise to the hon. Gentleman. I knew that he was from somewhere up north but I am sorry that I got his title wrong. That does not alter the fact that I congratulate him on introducing the debate.

If I were to sit down immediately we would have an hour to hear from the Minister on Government policy on the issue. I begin by asking the Minister why he, and not his hon. Friend the Under-Secretary of State for Transport, the hon. Member for Plymouth, Devonport (Mr. Jamieson), is taking part in the debate. One of the most constructive outcomes of the fuel dispute three years ago was the emergence of the road haulage forum. That forum meets regularly and, as I understand it, the Government's representative from the Department for Transport is none other than the hon. Member for Plymouth, Devonport—indeed, he was at a forum meeting earlier this month. He is the key Transport Minister, dealing on a day-to-day basis with road haulage, so surely he should be present to demonstrate the importance of the issues raised in the debate and respond to them. I fear that, worthy as the Under-Secretary of State for Transport, the hon. Member for Harrow, East (Mr. McNulty), is, as road haulage is not his responsibility he may say that he does not have the necessary answers to questions that have been and will be raised.

The hon. Member for West Renfrewshire (Jim Sheridan) referred to unfair levels of fuel tax. It is worth putting on the record the front page of the September 2003 edition of Roadway, the magazine of the Road Haulage Association. Inside a black border is a statement that says: "Public Wealth Warning. Chancellor, you threatened to raise fuel duty on October 1, 2003. Please think again, DON'T DO IT! All EU countries must pay the world rate for oil. Only the UK chooses to levy penal rates of duty. That puts transport costs up and makes this country less competitive. It gives foreign hauliers operating in the UK a grotesquely unfair advantage. In the interests of a dynamic manufacturing and service based economy, you should be REDUCING fuel duty for road transport."

I hope that the Minister will clarify the situation concerning that threatened increase in fuel tax. When the Chancellor introduced his Budget, he said that he would not introduce an increase in fuel duty because of the instability in world fuel prices. At that stage, the world price of oil was about $27 a barrel, and it is now about $28 a barrel. The price is higher than it was, and there is clearly a lot of volatility in supply. Therefore, I am surprised that the Chancellor has not made a statement to clarify his intentions for a mid-year increase in fuel duty.

I hope that the Minister will put that omission right today because, as we know, the House rises tomorrow and will not reconvene until after 1 October. It is important to clarify the Government's approach, particularly for everyone involved in the road haulage industry. As I understand it, if there were an inflation-linked increase in duty, the road haulage industry alone would be burdened with an additional £172 million of costs each year. That is a large sum of money.

We heard today on the radio that the Government are making much of spending £50 million on trying to reduce congestion on our roads by giving schools incentives to encourage children to walk and cycle to school. Some £50 million is going to that, but at a stroke another £172 million could come from the road haulage industry alone in the next few weeks—an industry which is already paying the highest fuel taxes in Europe. I hope that the Minister will respond to that concern in the substantial time that will be available to him.

The second issue that the hon. Member for West Renfrewshire emphasised was concern about the working time directive. He asked for clarification from the Minister as to whether working time would include rest time that is part of the working day. That is a pertinent point, particularly with regard to a recent highly publicised judgment in the European Court that made it clear that, for the purposes of the working time directive, doctors are deemed to be working when they are on call. If that applies to lorry drivers, who are, in a sense, on call or waiting by their lorries while they are being unloaded, the already oppressive proposal contained in the directive would have an even greater impact on the competitiveness of our industry.

At the meeting of the road haulage forum to which I referred, both the Freight Transport Adjuster and the R.HA raised that issue. A report of that meeting says that the Under-Secretary of State for Transport, the hon. Member for Plymouth, Devonport, wanted to be provided with some more information. I am surprised that he needed any more information, because the Centre for Economic and Business Research produced a formidable report in February this year for the RHA, which I am sure the Minister must have read if he is seriously interested in the issues. That report spelled out in the starkest terms not only that there would be a need for 60,000 additional drivers, as the hon. Member for West Renfrewshire mentioned, but that major additional costs to the UK economy would result directly from the working time directive.

The report also said that there would be a significant increase in congestion, which would largely be due to the difficulties of moving freight at night. Under the proposals, anyone working during the core period for night work, which is described as a four-hour period between midnight and 7 am, will be limited to working a maximum of 10 hours. That is likely to make it less economic for hauliers to use the opportunity presented by transport at night on roads that are less congested, and they will be forced to use the roads during peak times and in the working day to a greater extent than they do now.

Jim Sheridan

Against the background that the hon. Gentleman has described—he has claimed that there should be parity with European legislation on fuel costs and so on, and that British hauliers should enjoy the same level of fuel tax as our European partners—will he state clearly whether a Tory Administration would implement the working time directive for transport workers and afford them the same rights as their European colleagues?

Mr. Chope

Unfortunately, as I think the hon. Gentleman realises, we as a Parliament have lost a lot of our sovereignty over such issues. If our power to opt out of that directive is not exercised now and the Government have already either lost or not fought the argument, the options open to an incoming Government will be restricted.

There is another example of that, which concerns speed limiters, and I hope that the Minister can address the issue. As I understand it, the European Commission has decided that the maximum speed for speed limiters for heavy goods vehicles should be reduced from 100 to 90 kph. The British representative in the discussions voted against the proposal, but it was carried by other European Union countries. As a result, it will now be imposed on the people of this country against our will.

That is another unacceptable example of how we are finding our sovereignty and power to decide being undermined by the European Union. The hon. Member for West Renfrewshire says that we are in favour of harmonisation, but I have said only that I am in favour of this Government taking action to remove the burden on our industry of uncompetitive taxes. We believe in the freedom of individual countries to decide their own tax rates and regulatory regimes in accordance with the principles of sovereignty, but that is being constantly undermined by the European Union.

It is inconsistent for the hon. Gentleman to argue that he is concerned about the working time directive without looking at the structure underlying such directives. That structure makes the European Union less competitive in global markets and, in particular, undermines the most enterprising parts of the European Union, especially the United Kingdom, which of course includes Scotland.

What has happened so far with the latest part of the working time directive? The original Labour party line was that it would never want the directive extended to the transport sector, but now we see that it will be extended. Labour has done nothing effective to resist it, and we are left with only the residual issue of the extent to which we can introduce regulations that are less oppressive in this country than elsewhere. The absurd result is that lorries will not be able to use the relatively empty roads at night, because their drivers would break the ludicrous regulations, which will add to congestion during the day.

The Minister should consider the CEBR report, which contains horrendous figures about the cost to the British economy of the working time directive, which is due to come into effect next year. It estimates that there could be a loss of £706 million from our GDP and an addition to both the retail prices index and base rates, simply as a result of that particular provision.

What will the directive achieve? Regulations on drivers' hours already exist, and there is no need to extend them and incorporate the working time directive. Working time has never been directly linked to health and safety, which we are all concerned about, but the European Commission has used the notion of health and safety as a ruse to introduce greater controls over individuals' lives. Unlike other parts of the working time directive, which have been introduced in other sectors, there is no opt-out for the haulage sector, which is a direct affront to the rights of individuals to work. There is a well-established right to work campaign in the United States, and I envisage such campaigns being replicated soon in this country if the European Union continues to impose mindless regulations on our workers.

Jim Sheridan

Putting aside employee rights in the working time directive and employers' potential profitability, does the hon. Gentleman accept that drivers in Britain, whether British or foreign, regularly work some 60 to 70 hours, driving 40 or 60-tonne lorries through our communities? Does not that represent a threat to the safety of the British public?

Mr. Chope

Frankly, I do not believe that such a threat is borne out by the evidence. If the hon. Gentleman were to look at the statistics, he would find that the greatest incidence of accidents occurs shortly after people come on their shift. Perhaps the hon. Gentleman is arguing in favour of the rigidities that will be imposed by the working time directive, but the concerns that he expresses are not borne out by the statistics. I have always been concerned about health and safety because I have always wanted health and safety rules to be based on facts and evidence rather than on supposition. The facts and evidence show that the greatest incidence of accidents involving drivers on the roads occurs soon after they start their shift, and the same is true of accidents at the workplace. That may be counter-intuitive; nevertheless, it is supported by evidence, which should drive our policy making.

Jim Sheridan

I apologise for pushing the point, but the hon. Gentleman quotes statistics and facts. Could he advise us where they come from?

Mr. Chope

I do not have the documents before me at the moment. However, the hon. Gentleman may know that I have taken an interest in health and safety for a very long time and was privileged to serve as a member of the Health and Safety Commission for four or five years. The statistics are well established. I also recall that they were referred to during the RHA convention earlier this year, which I had the privilege of attending. If the hon. Gentleman wishes to avail himself of the information, I am sure that he will be able to do so using the facilities of the House of Commons Library. I am grateful to the hon. Gentleman for the interest he shows in ensuring that policy making in this country is based on evidence rather than the prejudice that we come up against so often from the European Union.

In the time that remains, I wish to ask the Minister to deal with some of the other issues, perhaps finally finishing with the working time directive. When will the consultation process on it be complete? There is a lot of concern from those in the industry that they are being kept in the dark. They know that the working time directive will operate from next year, but they do not know the detail. Surely, they should be told about that.

Will the Minister answer some questions about the road haulage modernisation fund, which is relevant to the need for more drivers—attracting people into the profession—and training? At the time of the fuel duties dispute, the Chancellor of the Exchequer announced with a flourish that he would set up a £100 million road haulage modernisation fund. We now learn that only a very small percentage of the money has been spent. Indeed, it was not a ring-fenced, identifiable sum but simply a notional sum that could be drawn down in the event of sufficient bids being made that qualified for the money.

Despite all their best efforts, the people involved in the road haulage industry have found it extremely difficult to get access to the money in that fund. That is because the money in the fund is not ring-fenced but must be provided by the Department for Transport at the expense of some of its other priorities. The Department for Transport is extremely reluctant to make money available from that "fund", which is not even operating at all in Northern Ireland.

The Government should make an open declaration that when the Chancellor said that there was going to be £100 million for a road haulage modernisation fund he meant what he said. That money should be available for training until such time as the whole of that money has been exhausted. What is on the cards at the moment is that a very small proportion of that money will be used and it will not be available for training, which was the original intention. That is another example of the Government pulling the wool over the electorate's eyes, effectively deceiving the electorate and the road haulage industry.

Jim Sheridan

On training, I ask the hon. Gentleman a genuine question from a point of ignorance. Other industries have to make significant investments in the training of their own people—I am thinking of my own background in engineering, where individuals and private companies have to make significant investment in training. From his vast knowledge of the RHA and the road haulage industry, will he tell me how much they invest in the training of their drivers?

Mr. Chope

I do not have access to that figure, but I do know—and I am sure that the hon. Gentleman accepts this—that the Government made it clear when they set up the road haulage modernisation fund that they wished the fund to be used largely, if not exclusively, to promote training to attract more people into the industry. That was the Government's intention—or at least, that was what the Government said that they intended to do. In reality, every time bids have been made to draw down money out of that fund for training, they have been resisted. Only a small proportion of the money has found its way into training a fresh generation of lorry drivers and hauliers. The industry is suffering from a relatively high average age of operative, and there is every good reason to encourage a new generation of younger people to become involved. That will not be possible if the Government do not release the money that they promised for the road haulage modernisation fund.

Has the Minister been able to get the information that was promised to the director general of the RHA at the recent meeting of the road haulage forum about the contrast in the number of continental hauliers being prosecuted for traffic offences in this country as opposed to the very high number of UK vehicles being stopped and being made subject to checks and prosecution? That is a cause of immense resentment among British lorry drivers, who are for the most part law-abiding. They find that they are being picked on when more than 10,000 foreign vehicles travelling on UK roads every day seem to be regarded by the enforcement authorities as too big a problem to address. From our own experience of driving on British roads we know of many examples of lorries with foreign number plates being driven in a way that falls far below the standards that we expect of our own road users, and they seem to be doing so with impunity. The Minister assured the RHA that he would look into that matter, and I should be grateful if the Minister present today will let us know the results that flowed from that.

There is also the movement of abnormal loads. From 1 October, which is not far away, regional police authorities will no longer be in a position to escort certain categories of load. The police expect operators to use self-escorting or private escorting for a great number of those movements. It is still not clear what the national guidelines for such movements are. Such things include escort vehicle specification, the qualifications or experience of attendants, and, most important, which loads can be moved under self-escort. The matter was raised at the meeting of the forum and I understand that the Minister himself was surprised that there were no guidelines in place. I ask the Minister present today to say whether those guidelines are now in place so that people involved in road haulage will know where they stand on the movement of abnormal loads from 1 October.

I hope that the Minister will take advantage of the 35 minutes or so that we have left to address the issues in detail and demonstrate to those present and to a much wider audience outside this place that the Government really are committed to supporting the British road haulage industry and to ensuring that it is internationally competitive and is not undermined by uncompetitive practices from the continent, aided and abetted by unfair burdens placed on it by taxation and regulation. If the Minister addresses those issues, I am sure that the low esteem in which the Government are held by most people involved in the road haulage industry may rise somewhat. I look forward to hearing the Minister's comments.

10.26 am

The Parliamentary Under-Secretary of State for Transport (Mr. Tony McNulty)

I congratulate my hon. Friend the Member for West Renfrewshire (Jim Sheridan) on securing this important debate. He outlined the concerns of many in the road haulage industry with clarity and some force and cogency—his was not like the last contribution. I am grateful for this opportunity to discuss some of the details that he raised. If I have time, I may refer to some of the obtuse political points raised by the hon. Member for Christchurch (Mr. Chope), but they are not terribly worthy in terms of a detailed and substantive discussion of the problems faced by the road haulage industry.

It is difficult to overestimate the importance of road haulage to our economy. The freight and logistics sector accounts for about 4 per cent. of GDP and 3.5 per cent. of total employment, and the road haulage sector represents a sizeable proportion of that. However, as Members know, it is far more important than that in terms of its interconnectedness, its support for the rest of industry and the relaying of materials. It is a massively important industry.

Mr. Chope

Will the Minister give way?

Mr. McNulty

No, not at the moment. I have just started, thanks very much.

Wider industry depends on efficient freight transport and to a great extent that is what it gets from the road transport sector. I say to the hon. Member for Christchurch that this is principally a Back Benchers' debate and I shall address the concerns of my hon. Friend the Member for West Renfrewshire, as I said barely 30 seconds ago. If I have time, I will come on to some of the hon. Gentleman's more obtuse points, made between the anti-EU invective.

The road haulage industry is an important sector. The Government maintain a regular dialogue with the Road Haulage Association, especially through the road haulage forum and its sub-groups, so we are well aware of the concerns of its membership, which have been more than adequately articulated by my hon. Friend the Member for West Renfrewshire. In many areas, we are working with the RHA and other parts of the industry to address the concerns.

Members know that it is not always appropriate for the Government to intervene, but we do have legitimate interests in how the industry operates. First and foremost, we want a safe industry. That requires rules and proper enforcement. The notion, which was alluded to by my hon. Friend, that a past member of the Health and Safety Commission should think that the working time directive has little to do with health and safety—that it is appropriate for lorry drivers, among others, to work however many hours they choose in a given week, taking larger and larger loads around the country—simply defies belief. The anti-EU rant got in the way of logic.

We will continue to work to ensure that where we regulate we do so proportionately. In some cases, such as the working time directive for road hauliers, regulation is established on an EU-wide basis, but the directive allows a degree of discretion in its detailed application.

My hon. Friend asked when we will consult on the implementation of the road transport directive for work. We aim to launch the consultation process and document by the turn of the month. In the context of the directive, he mentioned the need to recruit more drivers. We share the concern of the industry to broaden the recruitment base to include women and ethnic minorities, and we are working with the industry to achieve that.

The hon. Member for Twickenham (Dr. Cable) asked what constitutes working time. The directive allows some flexibility on that point, but the issue is complex. Our definition of working time in the context of our derogation will be covered in the consultation. That consultation will be accompanied, as ever, by a regulatory impact assessment providing our assessment of the costs of implementation.

On what constitutes working time, mandatory breaks and periods of availability do not count as part of the driver's working time in the context raised by my hon. Friend the Member for West Renfrewshire. The consultation will begin at the turn of the month and a degree of leeway and flexibility will be reflected in those consultation papers.

There are other areas where we are keen to work on a voluntary basis with the industry, as our objectives complement each other: haulage companies want to maximise profits; we want to see safe operators offering good-value services with minimum damage to the environment. That is consistent with the thinking behind the road haulage modernisation fund, which is devolved throughout the United Kingdom and was announced by the Chancellor in November 2000. The fund will close in 2004. Take-up has not been what he hoped for—far from it—but the scheme has achieved some valuable results.

The hon. Member for Christchurch dwelt on the paucity of take-up, but he did not dwell on the substance of that take-up, whether it is clean-up, fuel economy advisers, the modernising operator scheme pilots or enforcement in Great Britain. Limited funds have been spent on training schemes, but that needs to be seen in the light of other projects—as he well knows, given the answer that he received to a parliamentary question. The driver development scheme, the driver simulator project, the respect for people scheme, the careers website and the modernising operator scheme have been established and there is clearly a lot more to do.

Mr. Chope

If the scheme is so worth while, why are the Government not carrying on with it until the whole £100 million guaranteed by the Chancellor has been spent?

Mr. McNulty

The scheme has been proved effective and successful in substance in those areas where it has been taken up, but given that it is coming to the natural end of its initial three years it must be reviewed in the pot, along with all other priorities, as a draw on public funds. There was not £100 million for ever; there was £100 million to respond to the needs of the industry. It was always subject to take-up. So, the notion put about by the hon. Gentleman, among others, that there has been only such-and-such a take-up, which means that all the rest is available for some other purpose, is wrong. He knows that it is wrong, but it makes a nice little political point for him, along with all the other obtuse political points that he makes.

There will be a review of the processes that have worked and of the efficacy or otherwise of the fund in all its assorted parts, and we will move forward. Take-up has been less than anticipated, not least because of the working time directive. More generally, there needs to be a clear examination and review of recruitment and retention issues and training in the industry. I must say that, at least in part, the implementation of the working time directive may attract to the industry people who have not previously found it appealing.

The fund has delivered some valuable results. For example, we have funded a driver development project to train drivers to drive in a safer and more fuel-efficient way. We are training not only drivers but trainers, who will hopefully embed best practice in the industry. Early results suggest that some drivers can reduce their fuel consumption by more than 10 per cent. If an average lorry consumes £25,000 of fuel each year, such a reduction represents a significant saving, which will go straight to a company's bottom line. It also means a reduction in damaging emissions.

We are funding a project to help companies adopt best practice in their operations. Some 3,000 seminars, which are backed up by our ongoing research programme, are being run around the country to help haulage companies understand that simple steps can improve fuel efficiency. For example, setting the right gap between the cab and the trailer improves aerodynamics and can save up to 4 per cent. on the fuel bill. The modernisation fund also supports the fitting of particulate traps, which have so far been installed on 600 vehicles.

We support training initiatives to encourage young people into the profession. As my hon. Friend the Member for West Renfrewshire said, we share the industry's desire to broaden the recruitment base beyond the traditional white male section of the community. The Government have been active, but the industry must also play its part. Many hauliers, especially the bigger ones, have made their operations more efficient and the challenge, as in other industries, is for small and medium-sized companies to do the same.

We understand that there are resource constraints. In the smallest companies, the owner is invariably also a driver who will not want to spend all evening staring at figures after a day on the road, but the biggest gains, both for the industry and for the wider community, can be made in such companies. We continue to put a lot of effort into getting the message across. We also continue to encourage everyone in the industry to take advantage of the help that is still available.

My hon. Friend also raised the question of fuel duties. As he said, it is a matter for my right hon. Friend the Chancellor. Unless I missed it, I did not hear an articulation of current Conservative policy on fuel duty during the deliberations of the hon. Member for Christchurch, but I am happy to give way if he wants to elaborate. He knows that Treasury Ministers attend the road haulage forum and that they are more than aware of the industry's concerns. It is not for me to comment further, not because the matter is the responsibility of the Under-Secretary of State for Transport, my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson), but because I do not job share and have a job as a Treasury Minister as well as being a Transport Minister.

Mr. Chope

We accept that a threat hangs over the haulage industry. If the Government believe in joined-up government, they should immediately clarify the situation. The Minister is a member of a supposedly joined-up Government. If he cannot tell us whether the answer is yes or no, can he tell us when an announcement will be made?

Mr. McNulty

What I can do is reinforce what the Chancellor said at the last Budget—the hon. Gentleman is more than aware of this. There will be an announcement in October, so, given that we are barely halfway through September, he is being slightly premature. The announcement will be made by the Chancellor, not by a Transport Minister, and funnily enough October means October.

Given where we were in April, the Chancellor felt that it was not appropriate to consider such matters, not least in view of the international context. Rather than making a decision then, he left it until October, which is the normal time at which we return to do business. It is not in anyone's interest for him to rush between now and 1 October to get a decision, whatever it may be, into the public domain, given that we return, as I understand it, on 18 October. That more than fulfils the Chancellor's obligation, as he said that he would make a further statement in October. [Interruption.] That was probably the most obtuse of all the hon. Gentleman's points, but if he wishes to persist I will give way by all means.

Mr. Chope

I am grateful to the Minister for that. Is he saying that the Chancellor will make his announcement to the House of Commons after it returns in October, rather than between 1 October and when the House returns?

Mr. McNulty

I am saying that how and when my right hon. Friend the Chancellor makes that announcement is entirely a matter for him. I was referring only to the hon. Gentleman's point that because my right hon. Friend referred to October in the Budget there has to be urgency between now and 1 October to determine the matter. That is not the case at all, as the hon. Gentleman well knows. My right hon. Friend will make whatever statement he chooses, in the context of his April statement on fuel duties, in October. Given the Government's integrity and enormous respect for the House of Commons, I do not doubt that the House will be party, through the appropriate channels, to such an announcement or statement. That is the end of my role in the matter.

I am sad to say to my hon. Friend the Member for West Renfrewshire that I cannot offer any comment on the terms under which the oil companies supply fuel to hauliers, although I am concerned about the anecdotes that he has relayed today. I will ensure that they are relayed to Ministers from the Department of Trade and Industry, who are more appropriate to respond.

I welcome my hon. Friend's support for our plans to introduce lorry road-user charges. As he said, that will ensure that all hauliers of whatever nationality pay their fair share towards the cost of using our roads. We have already made it clear that the new scheme will be cost neutral for the UK haulage industry as a whole, as there will be an offsetting reduction in fuel duties. The hon. Member for Twickenham asked about the compatibility of lorry road-user charges with European Union legislation. The European Commission has just proposed changes to the rules that govern tolls and charges for lorries. Its proposals are broadly compatible with what we want to do, but we shall work during the coming months to negotiate a satisfactory outcome between the two. I understand that there are no deal breakers, to use the vernacular. We just need to arrive at a position of compatibility.

The hon. Gentleman asked how the technology is developing. Details of what technology will be used to operate and manage the charging scheme still need to be worked out in partnership with the private sector, which has the expertise to design the equipment. The technology will probably involve a combination of satellite positioning and mobile communications systems. Measures to ensure confidentiality and to combat fraud and evasion will also need to be developed, as he suggested.

My hon. Friend the Member for West Renfrewshire asked whether the charging could be introduced before 2006. I am sorry to disappoint him and the haulage industry, but 2006 is probably the earliest date for introduction, given the complexity of the project and the technology behind it. We want to get it right from the start, rather than introduce it in a hurry, and that takes time.

From the Conservative Front Bench, we have had no policy on fuel taxation, no apparent policy on the working time directive other than to recognise that it has absolutely nothing to do with health and safety, and no real policy that I could discern on lorry road-user charging. We did have almost a condemnation of every police force in the country—they are somehow all abusing their enforcement powers over offences committed by all these foreign lorry drivers who are far more prone to getting away with offences on our roads than British lorry drivers. I know that there is some exasperation in the industry with that, but not in such sweeping terms.

Concerns have been expressed and articulated by the RHA, but to couch them in quite the terms that the hon. Member for Christchurch did is demeaning to him, if I may say so, as is his rant against various aspects of anything remotely European. We have come to expect such rants but, unlike the expression of concern by my hon. Friend the Member for West Renfrewshire, this one did not put in context the real concerns of the RHA with any credit to the hon. Gentleman.

I listened keenly to my hon. Friend when he discussed the issues concerning the haulage industry, and I congratulate him again on securing this important debate. In conclusion—

Mr. Chope

I thank the Minister for giving way, because, obviously, another quarter of an hour is available if he wants to say more about the Government's view of the road haulage industry.

On vehicle stoppages, the Minister has not explained why he is replying to this debate instead of his colleague the hon. Member for Plymouth, Devonport, who serves on the freight forum. At that meeting, that Minister seemed to be concerned about the differential enforcement of the regulations. Today, this Minister seems to be dismissing that as anti-European invective, which it is not. There is a question whether there should be consistent and even enforcement. Will the Minister say how far his investigations have gone in trying to get to the bottom of the matter?

Mr. McNulty

The first thing the hon. Gentleman should not do is put words in my mouth. What I characterised as anti-European invective was how he pursued and articulated the very real concerns—as I think I said on at least two occasions—of the industry, which my hon. Friend the Member for Plymouth, Devonport is taking seriously and considering in some detail. The concerns expressed by the industry do not fall in the context of the anti-European invective that characterised the speech of the hon. Member for Christchurch today. That is what I clearly said. I did not dismiss or belittle the real concerns of the industry. I said that it will not have a particularly useful or articulate champion in the hon. Gentleman if he constantly pursues the matter with anti-European invective, as he does and which anyone who reads the record will see clearly.

I say again to my hon. Friend the Member for West Renfrewshire and colleagues who have had to leave that the substance and manner of their raising of the issue are to their credit.

Mr. Chope

Will the Minister give way?

Mr. McNulty

Once more, and once only.

Mr. Chope

I am grateful to the Minister. In the time remaining, will he address the issue of speed limiters and the EU's proposal to reduce the maximum speed for lorries with speed limiters? Will he explain the Government's approach to that, because I understand that they voted against the proposal? Why did they fail to carry the day and the argument?

Mr. McNulty

That is a fair point, but I am unable to deal with it. However, I shall ensure that my hon. Friend the Member for Plymouth, Devonport writes to the hon. Gentleman about the matter. I am more than happy to say that I cannot respond and the hon. Gentleman may use whatever political guile he wants to make something of that, as he is trying to do about my presence here instead of my hon. Friend.

The way in which the issue has been raised is important and I assure my hon. Friend the Member for West Renfrewshire that I shall maintain a keen interest in the matter, as will my hon. Friend the Member for Plymouth, Devonport on the matters to which I cannot respond. I am heartened by the 10-year plan and the overall thrust of the Government's transport policy. The FTA said in Freight magazine that it "will continue to monitor the government's progress in keeping to its promises. While it is gratifying that it is at last beginning to take some of the industry's concerns on board, there is a long way to go before the infrastructure situation can be stabilised, let alone any long term improvements." I agree with that. In the context of all that we are seeking to do on transport policy for a vibrant and successful haulage industry, we need to tackle the neglect, despair and disinvestment in the overall transport infrastructure. That is what we are trying to do in the 10-year plan. I am grateful that the FTA welcomes that in some regards, although I am not surprised that such a significant body maintains a watching brief over us in terms of broad transport policy and, specifically, the road haulage industry.

10.49 am

Sitting suspended.