HGV Road User Levy Bill (Ways and Means)
(12 years, 1 month ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I beg to move,
That provision may be made for charging a duty of excise, to be known as HGV road user levy, in respect of heavy goods vehicles used or kept on public roads in the United Kingdom.
With permission, I would like to move that the House supports the introduction of legislation concerning a new levy for all heavy goods vehicles weighing 12 tonnes and over using the UK road network. We intend that the new levy will apply to all categories of public road in the UK and to both UK and foreign-registered HGVs. The introduction of the charge forms the commitment in the coalition agreement stating:
“We will work towards the introduction of a new system of HGV road user charging to ensure a fairer arrangement for UK hauliers.”
HGVs play a crucial role in our economy by supplying businesses and servicing customers. There are approximately 1.5 million trips by foreign-registered HGVs into the UK each year. Of course, that contributes to the well-being of our economy, but there has been an inequality for some time, in that UK hauliers are often charged when they travel abroad, through tolls and other charging schemes, whereas foreign hauliers can use the UK road network for no charge. This is an inequality that the coalition Government wishes to address through this legislation.
I believe that this levy, introduced alongside other measures, such as reductions in the HGV vehicle excise duty, which means that more than nine out of 10 vehicles will pay no more than now, will help the competitiveness of UK business, while ensuring that we continue to enjoy the benefits of free trade with Europe. My Department undertook consultation on this subject earlier this year that indicated that stakeholders, especially those in the logistics sector, support the planned changes. Subject to the legislation being passed, we plan to introduce the levy from April 2014.
I now wish to open the motion to the Floor, and at the end of the debate the Under-Secretary of State for Transport, my hon. Friend the Member for Wimbledon (Stephen Hammond), will respond to the points made.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
It is good to see a number of Members in the Chamber for this debate, especially the distinguished Chair of the Transport Select Committee, my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), who is in her place, as ever. I am grateful for the Minister’s brief introductory remarks.
We support the motion in principle. Given that it is relatively unusual to debate the Ways and Means motion, which paves the way for the Second Reading debate, I hope that my comments will be in order. I will make some brief introductory comments and then look at the measures in the draft Bill—I would be surprised if the Bill did not closely follow the draft Bill, but judging from the written ministerial statement, that will become clear later today.
The Eurovignette directive covers this legislation. I must confess that I was tempted to look up the dictionary definition of “vignette”. I was pleased to see that it was
“a small illustration…which fades into its background without a definite border”.
That is clearly not a definition of the United Kingdom and does not take us any further forward.
Both main parties have promised these measures for more than 20 years, however, so I commend the coalition for bringing this one forward. We will be dealing with it over the next few months. I read recently, on the subject of the coalition, that the Lib Dems introduce the nice legislation and the Conservatives introduce the nasty legislation. I am not sure whether that is reflected in the surviving Lib Dem Transport Minister opening the debate and his Conservative colleague concluding it. The Under-Secretary of State for Transport, the hon. Member for Wimbledon (Stephen Hammond), might have something to say about who has been pushing this measure within the Department. None the less, it is good that it is here.
The unfairness felt by the UK road haulage industry is well documented, and it has long pressed for this measure in order to defend British industry, protect UK roads and create a level playing field with European competitors. As colleagues will know, road haulage covers 68% of all goods moved within the UK, is represented by 34,000 workplaces and employs more than 220,000 people. The Freight Transport Association and the Road Haulage Association both support the measures—the RHA strongly and the FTA broadly, as its support is a little more qualified.
I shall come shortly to the questions of hypothecation and whether the money raised will be used for transport spending, which I understood was the original intention of the directive; of the impact on the Government’s policy of moving freight from road to rail; and of the implication for short sea shipping and using that to move freight around the country. I will want to make reference to the Road Safety Foundation reports, including the annual report launched in the other place last week by the noble Lord Dubs, the organisation’s chairman. I will also want to raise questions about how this role will impact on The Times cycling safety campaign, of which I know the Government are very supportive, as well as about the Government’s policy for the introduction of longer and heavier lorries, and how that fits in with the plan. I shall also deal with whether or not this measure might act as a disincentive for road haulage firms to employ green measures or procure green or greener vehicles. I shall come back to these issues later. Even in the proposed measures facilitated by this Ways and Means motion and the Bill to follow, as read in the draft Bill, there are some anomalies, which I shall come to in due course.
Will the Minister clarify, if he can, some of the proposals in the draft Bill and in the written ministerial statement? For example, clause 3(2) of the draft Bill says that the Secretary of State can delegate exemptions for “specified roads”, but there is not much information without the actual Bill before us or in the Library. The Minister might wish to explain which exemptions the Secretary of State will make for which specific roads; if not, we will certainly raise the issue in Committee.
Clause 4 of the draft Bill says that the levy is suspended
“if a vehicle is stolen”
until such time as it is recovered. It is not quite clear whether the recovery is by the police or the owner, or whether, if a vehicle is damaged or unable to be used, it means that the levy will be suspended or re-instigated when the vehicle is recovered—or whether that is entirely fair. These are points of detail.
In respect of the rebates that are covered in clause 7, three matters are worth mentioning. Subsection (5) states:
“The Secretary of State may specify conditions with which a person must comply before making an application for a rebate.”
The implication is that the Secretary of State is going to preview all applications, which is obviously never going to be the case, as it would not be possible for the Secretary of State to do that. The clause mentions that an administrative fee will be levied, again saying that the Secretary of State will determine each case—and happily that is going to be the case—so will the Minister outline the thinking behind the administrative fee and how much it would be? Finally on clause 7, subsection (9) states:
“Matters specified under this section must be published in whatever way the Secretary of State thinks appropriate.”
That is very wide, so I am sure the Minister will have some information about what that means.
Clause 9 provides that money
“is to be paid into the Consolidated Fund.”
Originally, there was an expectation in the European directive that the money raised would be hypothecated, at least in some way, for transport purposes. The Minister will know that the Road Safety Foundation published its annual report last week. It clearly indicates that road engineering can have “an extraordinary effect”—those are the words it uses, which I cited to the Secretary of State at Transport questions last Thursday morning—in reducing deaths and serious injuries. Simple measures such as road markings, traffic lights and barriers to prevent vehicles from careering down off different roads are ways of saving lives. The hypothecation of the levy into road safety measures was very much anticipated, but it is not quite clear whether that is going to be the case under the Bill or whether the provisions saying that the money will go into the Consolidated Fund mean that it will go into the Treasury, so that the Department for Transport will have to bid for its share in due course.
On other safety issues, the Government have clearly indicated that they want to introduce longer and heavier lorries on Britain’s roads. There is a system through which longer and heavier vehicles will pay a greater levy, so that poses the questions of whether some of this money will go to pay for the upkeep of Britain’s roads and how this will impact on the safety campaign that the Government strongly support. I know that the Under-Secretary made a strong speech in support of road safety last week, and particularly cycle safety. His hon. Friend the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), who is no longer in his place, spoke at the “Love London, Go Dutch” cycling safety conference in Church House immediately after Transport questions last week. The Times campaign to which all parties have signed up says that we should spend more money on cycling safety. The question arises whether some of the money raised through this levy will go towards making cycling safer, particularly given that many more people are cycling today.
I would like to raise a question of principle about rail freight and short sea shipping. What are the Government’s policies on promoting rail freight and taking lorries off our roads whenever possible? What are the Government going to do to promote short sea shipping as an alternative to HGVs on our roads moving freight across the country as happens at the moment?
Clause 10 provides a power to stop by the Vehicle and Operator Services Agency. I went out with VOSA when I was the Minister with responsibility for road safety, so I know that it uses that power efficiently, effectively and diligently. I particularly remember being on the A13 when the inspector I was travelling with in his VOSA vehicle indicated that he was going to stop a particular vehicle and asked me whether I knew why he intended to stop it and take it into the inspection centre. As a good West Ham United supporter with one of my West Ham ties on, I said, “I think I know the reason. He’s got an Arsenal flag in the back of his cab.” The inspector looked at me and said, “No, Jim, that is not why we are stopping him.” I thought that was a fairly reasonable assumption; it certainly worked for me. VOSA is very effective at keeping our roads as safe as they are; the power to stop is a very important one. It is good to see it included in the draft Bill so that the levy that the Government intend to introduce can be enforced.
Clause 11 deals with the offence of
“using or keeping heavy goods vehicle if levy not paid”.
Subsection (3) states:
“A fine imposed under this section that would not otherwise be paid into the Consolidated Fund is to be paid into the Consolidated Fund.”
That reinforces my point about how the money raised is likely to be spent.
A written ministerial statement was published this morning by the Under-Secretary of State for Transport, the hon. Member for Wimbledon, which says:
“A private company will be contracted by the Department for Transport to administer the payment scheme for foreign-registered HGVs. The contractor will be required to maintain an electronic database of foreign-registered HGVs for which a levy has been paid.”
I wonder whether the Minister is in a position to clarify some of the details of the expected size of the organisation that he anticipates will be needed to do this task. How will the costs be calculated? Does he view the tendering arrangements as a bonus to the Treasury, or will it be cost-neutral? Have companies already indicated interest such a contract or do they already exist? Importantly, what technology might it be anticipated will be used for identifying foreign HGVs when they come into this country?
Let me conclude with six key questions. The background papers indicate that 98% of UK hauliers will see no more extra costs than around £50 a year, and that 94% will see a zero increase in their costs. Does the Minister have any information on the likely cost for the 2% for whom there is no information? At £1,000 per vehicle per annum, some haulage firms might be expected to pay a considerable amount of money. I hope the Minister can tell us whether any assessment has been carried out of the impact on the UK’s road haulage industry.
Secondly, the introduction is being phased between UK and non-UK vehicles. Is any loss of revenue to the Treasury expected as a result of the staging of the introduction of the levy, as and when it happens?
Thirdly, will the lower VED for UK vehicles act as a disincentive for haulage companies to procure greener or green vehicles, or it is anticipated that the size of such vehicles will mean that they would not be covered by the reduced VED? Has the Minister conducted an assessment for the industry in that regard?
Fourthly, will the Government’s decision last year to opt out of the European directive on cross-border enforcement of traffic offences impact on these new measures? I do not think we opposed that, but we were certainly worried about it at the time. Will not sharing that cross-border enforcement data make implementing, monitoring and enforcing the levy easier, harder or neither?
My fifth question is more general. Is the introduction of the HGV levy charging scheme likely to lead to the wider use of road charging schemes? Is this just a taster of Government policy for the future?
Finally, UK companies involved in haulage on European routes will be charged for a six-month or annual purchase of VED, which will incorporate the levy. European hauliers coming into the UK will be charged by the day, by the month or however else, so if UK companies have vehicles on the continent that are being charged to use European roads will they be able to apply for a rebate when those vehicles are not using UK roads? If the principle that one should be charged for using the roads is adopted, which I am sure it will be, it seems unfair that UK hauliers should be charged for using UK roads when they are using European roads and being charged over there.
In conclusion, we intend to support the motion and certainly hope to be able to support the Bill on Second Reading. We will want to examine some of the issues I have raised today in Committee. I do not expect the Minister to be able to respond to every point I have raised today, as this is obviously an unusual way of doing business. I was advised by the appropriate authorities, however, that I could raise issues that I would be likely to raise on Second Reading. Having done so, I do not anticipate raising them again on Second Reading and, given that you have not stopped me making any of my remarks, Madam Deputy Speaker, I must assume that I have been totally in order. I look forward to the Minister’s response in due course.
Andrew Percy (Brigg and Goole) (Con)
I am delighted to support this excellent initiative. Of course, the policy was a commitment of ours at the last election and it is always a joy to stand in the Chamber and deliver on a manifesto promise. I know that it is supported on both sides of the House and was in other parties’ manifestos, too.
We must do more to support the sector across the UK. In the area I represent, logistics and transport are important and employ many people. We have many hauliers locally and I know that they will welcome the Bill. The initiative is good news not only for hauliers and people who work in the industry, but, I hope, for residents in my area. I hope that the Minister will announce how the money will be spent. I represent the port of Goole and most of the arterial routes into the ports of Hull, Immingham and Grimsby and our roads are often well-used by HGVs, which cause considerable damage. We get a lot of complaints from residents about HGVs, so let us hope that once the money has been raised it will be invested back into our road networks, particularly in Brigg and Goole. I do not yet see the Minister nodding but I am sure he will confirm that later.
There is a question of fairness as British hauliers who go to Europe have to pay tolls, which are not levied on any great scale in this country. It is only right that foreign vehicles operating here should pay to use our roads.
Huw Irranca-Davies (Ogmore) (Lab)
I thank the hon. Gentleman for giving way so soon. He is making a very good speech and he is right to say that the initiative has broad support on both sides of the House, including in my constituency, where hauliers serve Tata Steel, Rockwool Ltd and others. The Minister is introducing a complex little device, so will the hon. Gentleman urge him to think again? Some UK hauliers of certain types and sizes might lose out, or might at least not gain all the benefits that the Minister has intended, so he might want to take some time to reconsider and tie up all the little loopholes.
Andrew Percy
I feel that I have been a conduit for the hon. Gentleman’s contribution to the debate, which is, I think, addressed specifically to the Minister. It is a joy to have been that conduit. The hon. Gentleman has made an important point and I have no doubt that my hon. Friend the Minister will respond to it.
I was talking about the importance of the sector to the Humber, and it is good to see my constituency neighbour, the hon. Member for Scunthorpe (Nic Dakin), in his place. As we jointly represent the steel works, he will be able to confirm the importance of the sector to our area and the fact that it will see a great deal of growth over the next few months. I am never one to miss an opportunity to promote a good local news story, and in my constituency a studio school is about to be established with a specific focus on the logistics sector. Those involved will be delighted to know that our UK haulage industry will receive a shot in the arm from the proposal.
Of course, we had other good news locally on the Humber bridge tolls not so long ago. I will not miss the opportunity to promote another good news story, and I am sure that the Minister, whose Department was so involved in that decision, will be delighted to know that since the Government provided £150 million to halve those tolls, the most recent figures on road use across the Humber bridge have shown an 8% increase. That greatly exceeds expectations. Hauliers report that they can now use that bridge to get their goods to the other side of the Humber divide.
Andrew Percy
I will, and I look forward to being a conduit for the hon. Gentleman yet again.
Huw Irranca-Davies
I hope that the hon. Gentleman will be not only a joyful conduit but a joyful supporter of my argument. He makes a valid point about tolls and I welcome his comments about the absence of tolls in his area. The Severn bridge toll, which is paid on the way into Wales but not on the way out, is a significant drain on the south Wales economy. Does he support those of us who have been campaigning for years to get rid of it?
Andrew Percy
I am afraid I am not an expert on south Wales, having only visited once, but the hon. Gentleman has made his point. In the Humber region, people pay to travel in both directions, so we do not have any argument about whether people pay to get in and out of Yorkshire, whereas a debate does take place between Wales and England. I shall avoid stepping into any debate about local issues in south Wales. I am sure that the hon. Gentleman will understand.
The Minister will know that although this provision is welcome, the sector faces considerable challenges. I meet representatives of the sector regularly, and only this summer I was chatting to a local haulage firm at the Ousefleet show. The continuing challenges faced by the sector, particularly in the light of rising fuel costs, were explained to me. I know that the sector will support this measure, however.
It is something of a sadness that we must take this approach, however, and it demonstrates the all-encompassing grasp of the European Union—I cannot miss the opportunity to have a bit of a bash at the EU—that we must follow such a convoluted route, creating a scheme that applies to our hauliers and then providing them with a rebate through VED. That shows how we have lost control of our destiny in this country. We should be able to support our hauliers directly if we want to, and we should be proud to say that.
I do not want to say a great deal more on this, although I think that I have spoken longer than the Minister did—not longer than the shadow Minister, I have to say—but I look forward to contributing again on this subject in the future. I have just two questions for the Minister, one of which I have already asked, but I will pose it again. What will happen to the money that is raised from this? Where will it be spent? Both geographically and within Government Departments, where can we expect that funding to be spent? Will the Minister also confirm that we seem to have an increasing number of vehicles that are dual-registered? Has any assessment been made of whether the measure will result in more or less dual registration? With those few comments, I will end by saying that I welcome this decision and look forward to the Government’s making progress with the matter.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
I welcome the opportunity to discuss this important issue. It is one that the Transport Committee has considered over a long period. We are nothing if not persistent, so I am glad that we are now not just discussing it but talking about implementing something to change the situation.
The proposal does two things. It recognises the importance of road haulage as an industry in its own right and its significance to our economy, and it seeks a fairer deal for British hauliers. Both objectives are extremely important. The Transport Committee has considered the issue in a major way on several occasions. We conducted a study of freight transport in the last Parliament. We produced a report on road taxes, fees and charges in July 2009, and the levy featured prominently in that. The Committee returned to the issue in July this year, when we again considered freight, charges on freight and foreign hauliers.
The proposal deals with three inter-related issues: one of them is made explicit, but the other two are important and need to be considered in relation to the provisions of the Bill when it is published. Essentially the proposal is about road taxation and the problem of differential tax regimes which put foreign-registered vehicles at an advantage against British registered ones, which has long been a concern and needs to be addressed. Indeed, we have been too long in addressing it; it adds an additional cost to British hauliers.
When the Committee looked at this issue in 2009, we were told that foreign-registered hauliers should have paid £300 million in taxes to cover the costs that they created in the impact on roads, pollution and congestion and in environmental damage. I suspect that that figure has not changed in any significant way since that time. Another background issue does not appear to be mentioned in the proposal, but I am sure that the Minister will wish to comment on it. It goes back to the broader issue of unfairness in the regimes that deal with British-registered and European-registered hauliers. It is the issue of cabotage and the ability of foreign-registered hauliers to conduct domestic haulage in this country when British-registered hauliers have difficulty doing this in other countries.
In July this year we heard once again from the Road Haulage Association and other organisations about the extension of cabotage and the destabilising impact of foreign-registered hauliers becoming involved in our domestic haulage market, not necessarily in the long term but perhaps for a relatively short term. I understand that discussions about cabotage are taking place in Europe and they will have an impact on the haulage industry in respect of the issue that is at the heart of the Bill that is to be published. I ask the Minister to comment on that, if not today then at a later stage. It is part of the general picture.
Safety is another of the background issues. My right hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) mentioned it, but I want to refer to it in a slightly different way. One of the concerns that the Select Committee heard was that foreign-registered hauliers might have lower costs because they had lower safety standards, putting British hauliers at a competitive disadvantage. I and, I am sure, other hon. Members want to raise safety standards, not go to a lowest common denominator, but safety is an issue. There is another question about increasing safety standards for European hauliers.
There is also the question of enforcement of debts that arise in one country but perhaps need to be collected in another. The cross-border directive has not been signed by the Government and again there is a question about how that is going to be realised. Then there is the implementation of the proposed measures. The Vehicle and Operator Services Agency is to be responsible for implementation. Will it have the resources to do it? The Committee will be looking at the broader issue of VOSA in the very near future, but that has to be one of the issues.
In summary, I welcome the proposals. Some significant questions need to be asked once the Bill has been published in full and as it proceeds through the House. We must consider time-based charging and why it is thought the best way to address the issue. We should also look at whether the proposals are equitable in relation to UK hauliers. Will the means for collecting the fees be workable? We were told that one of the reasons why the previous Government did not proceed with legislation on this issue was that they felt the cost would be too high and it was not practical. Have those concerns been considered? Is there a way of dealing with them?
So the questions are about resources, VOSA, cross-border issues, cabotage rules and how this relates to European legislation as a whole. I would like to have an assurance that in dealing with European legislation we do not speak as if we were passive recipients of what someone else does. We are part of the framing of that legislation and we should play an active part in pursuing our interests.
I welcome the proposals. There are some significant issues that need to be considered in detail in Committee and elsewhere in the House. I hope that the Transport Committee will feel that we are getting more success in seeing some of our concerns not only listened to—they were listened to before—but acted on. I hope that it will happen in the near future.
Kwasi Kwarteng (Spelthorne) (Con)
I am happy to make my contribution to this somewhat technical though important debate. It is gratifying when matters contained in the manifesto or the coalition agreement have been acted on and we, as the governing party as part of a coalition, have delivered on our commitments. This is an instance in which we can be proud of ourselves for having delivered. It is bizarre, as the shadow Minister said, that we have been talking about this for more than 20 years. It seems a rather long time to be discussing something as technical and clear cut as this.
I fully support the levy. It will level the playing field. My constituency is dependent on good transport infrastructure. Spelthorne is very connected to Heathrow, but it also has links with the M3 and the M4 and it is within the M25. This legislation is exactly the kind of thing that haulage businesses in my constituency and neighbouring constituencies want to see. It sends a signal; they see a Government who are very keen on promoting business and enterprise and who are willing to defend the interests of British business against competition, which is laudable. For too long, British firms have been paying road tolls abroad while foreign operators were largely exempt from such taxation in the United Kingdom. It boils down to a simple proposition: is it right that foreign operators do not contribute to the maintenance of the roads they use? Contribution to the upkeep of the roads is not even a competition point; it is simply a matter of equity.
With regard to hypothecation, I am keen that the money that goes into the capital fund stays within the Transport budget, particularly the roads budget. I was lucky enough to go on a Transport Committee trip to Switzerland, where we saw the rail infrastructure and how it was financed. Rail infrastructure in that country is determined by hypothecated funds raised from taxation. That seems a good principle for the funding of infrastructure, and gets rid of any need to borrow money. The Swiss have a balanced budget at every stage of their infrastructure development. I am not making a party political point, but given our recent experience we could learn considerably from that funding model, so I am pleased that we have set aside a fund. I urge the Minister to be scrupulous about using the money for roads.
Everyone knows that haulage services are important to the smooth functioning of the economy. The transportation of goods is exactly what we as an advanced economy should be fostering. I am pleased that members of the Road Haulage Association are keen on the legislation and that we have managed to satisfy their concerns.
Generally, the measure is a step in the right direction. I hope the Minister will clarify some of the points and queries raised by Members on both sides of the House; it is rare that we come together to agree on something that will be helpful and useful to all our constituents and to the wider interests of our country.
Huw Irranca-Davies (Ogmore) (Lab)
I am delighted to speak on behalf of hauliers not only from my constituency and nearby Bridgend, but throughout south Wales. People often forget that the M4 corridor in south Wales is still one of the greatest manufacturing hubs in the nation of Wales, and probably the United Kingdom. There is a wide variety, ranging from the very modern heavy manufacturing—I was tempted to say the very old—of Tata Steel, whose investment sustains many jobs for local hauliers, to Rockwool, the green insulation company in Heol-y-Cyw in my constituency. There are many other manufacturers—for example, in life sciences—and they all use various types of road haulage, sustaining jobs in the south Wales economy.
I echo the sentiments of the hon. Member for Spelthorne (Kwasi Kwarteng). The measure is broadly welcomed by all on the green Benches. Resolving the matter has not been unduly complex, given that we are dealing with the interpretation of European legislation in the UK, and the Minister is to be commended for bringing forward proposals. I hope to ask a number of constructive questions, both as someone speaking up for hauliers in my area and as a keen cyclist on the roads of London and in south Wales—the Minister will know where I am heading when I say that.
I commend the work of members of the Transport Committee, in particular my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman). She mentioned the number of reports that the Committee has turned out on issues pertinent to the measure, including most recently a report on foreign hauliers in the UK and how we get the level playing field that everyone wants. The Committee has also examined road charging and freight transport.
In a genuinely constructive way, may I ask the Minister to turn in his response to those who may fall outside the mechanism? I appreciate the complexity and difficulty of trying to devise the right mechanism, but my understanding—the Minister can correct me if I am wrong—is that as many as 15,000 smaller, greener, lighter haulage vehicles may not benefit from the provisions; for example, in Pencoed in my patch, there is a light haulier who may fall entirely outside the measure. If those 15,000 represent 5% or 6% of the whole UK fleet, they are a significant minority, and I suspect they may look with envy at the large hauliers who deal with Tata Steel in the constituency of my hon. Friend the Member for Aberavon (Dr Francis) or with Rockwool in Heol-y-Cyw in my patch. Is there something more the Minister can do to help the small hauliers? They face the same problems and challenges. He may reply that the Government have looked at every possible avenue and it cannot be done, in which case perhaps he could explain why.
Hauliers in my area are specifically asking for clarity about the new levels of vehicle excise duty. I think the Minister is likely to respond by saying, “That’s beyond my payroll. You’re going to have to wait for the Budget.”
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
indicated assent.
Huw Irranca-Davies
The Minister is already nodding. I am slightly disappointed, because hauliers want an assurance that under the provisions VED will be cut proportionately to the levy and that they will actually benefit. I have been in the same situation as the Minister, and it would be great if he could assure them that come what may, there will be proportionality and that people will gain, or at least not lose out.
The measure is all about creating a level playing field with our European counterparts, because we have been disadvantaged. Can the Minister give us an assurance that UK hauliers will not lose out? If many will gain, but some will unfortunately lose out compared with others, can he tell us why that is and who they may be? I suspect I may have difficult messages for some of the hauliers in my patch who assume they will all be winners under the mechanism.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
The hon. Gentleman makes a fair point about the message we need to deliver to our constituents. Does he recognise though that it should not be about the UK being a winner, but making sure that we get money from foreign users? That is the key point.
Huw Irranca-Davies
The hon. Lady makes a good point. It is not a case of us being winners. I think the hon. Member for Spelthorne slightly misspoke earlier when he talked about putting protection in place. As the hon. Lady says, it is not to do with protection for us, but with creating a level playing field. I am sure the hon. Gentleman did not intend to suggest that we want fortress mechanisms; it is about getting a level playing field.
Kwasi Kwarteng
As an attentive observer of and participant in our debates, the hon. Gentleman will appreciate that in my speech I suggested that foreign operators should contribute to their use of the roads. That is the best argument in favour of the legislation.
Huw Irranca-Davies
I could not agree more; the hon. Gentleman and the hon. Member for Suffolk Coastal (Dr Coffey) make very good points.
On the issue of a level playing field, can the Minister give us clarity on when the start date will be? What is his best guess at the moment as to when the scheme will be introduced for hauliers not based in the UK? I suspect that this is a complex issue, but while I welcome the provision, it would be great if we could have the same date right across the board. If we cannot, why not, and can he give clarity on why not? There are worries that the date may be six months or a year afterwards, or—heaven help us—after the end of this Parliament; at least in this Parliament we know when that will be. Can the Minister give us an assurance that the measure will at least be in place before then? In fact, more accurately, could he tell us when it will be in place? All of us speak to haulage associations in our area; it would be great to get that accuracy for them.
I have a question for the Minister, for whom I am fearful. When I was a Minister, I was frequently told by officials, “Don’t do that, Minister; you could well be open to European challenge.” Sometimes, I would get a risk assessment put in front of me saying, “Actually, it is worth the risk—go ahead.” Has the Minister had those discussions with the Commission, and even if his officials are not happy, is he confident that the decision to have different charging levels for UK and non-UK-based heavy goods vehicles, because of the issues to do with daily, weekly and monthly rates being applied differently and being available differently, will not in any way be challenged on the grounds that it is discriminatory? I hope it will not, but I seek clarity and confidence from him on that point.
My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick), in his splendid opening speech, touched on issues relating to how the measure will be enforced. If I may drive home that point, there are some concerns from hauliers in my area that it may be more difficult to enforce the mechanism that the Minister is bringing forward now that his Government have opted out of the EU directive on cross-border enforcement. I would have thought that that would have been a highly useful mechanism through which to ensure that the measure is in place across the UK and elsewhere. In bringing forward this mechanism, has he had a risk assessment done that says that that does not increase the risk of non-enforcement?
I am genuinely not making a political point, but we know that some of the enforcement will be done by our police. I know that the Minister will say that the issue is not police numbers, but how and where we deploy them, but we face a cut of thousands of officers—I think the current running total is a cut of about 15,000 police officers by 2015. Put that on top of the fact that we are opting out of the EU directive on cross-border agreement and I worry a little, even if the Minister does not, about how we will enforce the measure properly, so that we see a level playing field in practice, as well as on parliamentary paper.
Finally, I turn to an issue that I mentioned at the beginning of my speech. I am a very keen cyclist, and a member of Sustrans—I do not know whether I have to declare that as an interest. My family and I cycle extensively, including in London, where hauliers hoot their horns and yell at me, “What the hell are you doing cycling on the roads in London?”. It amazes me; I have every bit as much of a right to use the roads as they do. There are extremely responsible hauliers and drivers out there, but we know how many injuries and fatalities there are. The Labour party has believed for some time that some of the benefit from the mechanism that the Minister is introducing—some of the levy—should be put towards working with the industry, rather than mandating them, to try to roll out technologically advanced measures that allow hauliers to see pedestrians and cyclists at the side of their vehicle. That would be a major step forward. Too often, around the streets of London and elsewhere, we see sites where there have been inadvertent collisions between soft cyclists and hard vehicles, marked by so-called ghost cycles—bicycles painted white and attached to railings in memory of someone who has lost their life. It would be very welcome if we looked at that.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I want to support the very important points that my hon. Friend makes. I witnessed a cyclist being crushed by a lorry, and am sitting in on the coroner’s investigation; the sort of practical suggestions that he makes would be welcomed by cyclists and their families.
Huw Irranca-Davies
My hon. Friend is absolutely right. I think that I can understand the Government’s opposition; they do not want to put undue burdens on the haulage industry, which, now as always, is suffering stress. I suggest that the Government should not have a closed mind on the subject, but should be open to the idea that, working with the industry, we could roll the technology out over time—and not a long period of time, either. Hauliers frequently renew their fleets; as fleets are renewed, we can roll the technology out. What we are talking about is eliminating blind spots. In London, one sees cyclists in the established blue cycle lanes; someone driving a lorry cannot see the fact that as they turn left, they veer right across that blue lane. Unfortunately, as my hon. Friend says, occasionally they injure a cyclist badly, or even cause a fatality. The technology is there, and there are not massive costs. I think that we could roll it out as fleets renew.
Jim Fitzpatrick
My hon. Friend is making a powerful speech. To reinforce his point, some companies have done sterling work in advancing the technology that he mentions. I know that the Minister is familiar with Cemex; after one of its drivers was involved in a fatality, it pioneered technology that it uses in the warning and alarm systems in its cement vehicles. It is doing everything that it can to prevent a recurrence of such an incident. Some in the industry are working hard to achieve aims that the whole House would support.
Jim Fitzpatrick
I should just correct my hon. Friend: I am not right hon. The Transport Committee Chair kindly promoted me. The Minister may want to put a word in for me, but I am not right hon.
Huw Irranca-Davies
As a full-time politician, I am more than happy to over-inflate anybody’s ego at any moment, but I will certainly put a word in for my hon. Friend, right as he was in his point. Rolling out improvements through fleet modernisation would create jobs in the UK relating to the manufacture and installation of those technologies. It is a win-win.
That is not my main point. My main point is that I welcome the Bill, but the Minister could do more, by tweaking and refining it, to make sure that there are not people who lose out while others gain from a level playing field; in so doing, he could take the opportunity to think bike.
Andrew Bridgen (North West Leicestershire) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests, and point out that I have been a holder of a certificate of professional competence in road haulage operations for more than 20 years.
I welcome this proposal, as other Members have done. My constituency of North West Leicestershire is in the middle of the country, and is home to East Midlands airport, the second busiest cargo airport in the country, handling some 310,000 tonnes of flown cargo every year. More than a third of the private sector jobs in my constituency are in distribution, or are distribution-related, and as we have no railway station, road haulage is an extremely significant part of our local economy.
The UK road haulage industry is of huge importance to not just my constituency but the whole UK, with 2.6 million people employed in the logistics industry. As the shadow Minister mentioned, more than 65% of all freight is transported by road; last year, that amounted to some 1.5 billion tonnes. By comparison, just 11% is transported by rail. For those who are wondering where the other 24% went, that is transported by pipeline or coastal and inland waterway shipping. Almost all goods involve some element of road transport.
I have spoken to road hauliers regularly, both in my previous business career and in my present role representing them in Westminster. As has been said, the consensus on the issue of foreign-registered heavy goods vehicles can be summed up very simply in one phrase: hauliers simply want a level playing field.
As my hon. Friend the Member for Brigg and Goole (Andrew Percy), who is no longer in the Chamber, said, road hauliers in the UK are at a huge disadvantage compared with our European neighbours when it comes to diesel prices. It is estimated that on average road hauliers pay 25p more for a litre of road fuel. When UK lorries go abroad, there are literally dozens of toll roads in countries such as France, Italy and Spain, whereas in this country, apart from bridge crossings, which we have heard about, there is only the London congestion charge and the M6 toll, which can be avoided.
Clearly, charging foreign-registered hauliers would be a step in the right direction if we are to close the gap and address the advantage that they enjoy over UK-based hauliers. Because EU law dictates that the charge has to be applied to UK hauliers too, I welcome the UK Government’s proposal to reduce domestic vehicle excise duty to ensure that this is not just a stealth tax on haulage companies.
I welcome the proposal to make foreign-registered vehicles contribute to the upkeep of UK roads. I remind the House of the costs generated by foreign hauliers as a result of accidents, which have been mentioned. A report by the Accident Exchange estimates that accidents involving foreign lorries on UK motorways cost our economy approximately £57 million a year, which represents an increase of almost a third compared with the 2010 figures.
Foreign lorries are responsible for just over 3% of motorway accidents, which means that one in 31 motorway accidents, according to the report, are the fault of a foreign lorry driver. As the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) said, side-swipe crashes are the most common accident: drivers disappear into a left-hand-drive lorry’s blind spot, and are hit when it changes lanes. According to estimates, costs were not recovered from the at-fault foreign party in 28% of accidents last year because of factors such as invalid insurance policies, untraceable owners, drivers leaving false details, or just failing to pull over at all. I hope that the Minister will help us to address this issue.
There is no doubt that left-hand drive foreign-registered vehicles are far more likely to be involved in accidents on UK roads than their domestic competitors. The Vehicle and Operators Services Agency reports that foreign-registered vehicles are far more likely to be found on inspection to be in breach of rules on drivers’ hours and to have maintenance defects.
As has been said, the Freight Transport Association supports these measures, and welcomes the publication today of a parliamentary Bill to introduce a charge for foreign-registered vehicles that use UK roads. It says:
“Under the HGV Road User Levy Bill all heavy goods vehicles of 12 tonnes and over will be required to pay a levy before being able to travel on UK roads.”
It also says:
“FTA has supported the idea of a charge on foreign vehicles for many years as a way of addressing at least partly the competitive differences between British registered operators and foreign-registered vehicles.”
However, it imposes three important conditions on its support and, if the House will indulge me, I should like to go through them. First, the cost of the levy must be fully recompensed for UK operators by an equivalent reduction in vehicle excise duty. The FTA says:
“The Bill makes explicit that VED will be the means by which rebates will be made to make the overall scheme virtually cost-neutral for UK operators. The precise reductions in VED to bring this about will not be known until the Budget Statement in 2014 where they will be included as part of the Finance Bill.”
I hope that the Minister will give us more details on that. The FTA goes on to say:
“An analysis published by the Department in February of this year showed that about 6,500 vehicles fell into bands where VED rates were already too low to fully offset the cost of the levy before the applicable EU minimum rate was reached. Of these about half were 28 tonne 2+2 articulated vehicles.”
May I point out to the Minister that in nearly all cases the additional cost could be reduced to less than £10 if vehicles are down-plated into the next VED rate band? I hope that he will bear that in mind and that we will have some answers on that issue.
The FTA’s second condition is that the cost and administrative burden of paying the levy must be no greater than those involved in acquiring a normal VED licence. I am pleased that the levy will be administered for UK operators by the DVLA. The Bill makes it clear that the levy will be paid in a single transaction and for the same time period as VED, with levy rates being calculated automatically. The “single transaction” approach means that there will be virtually no additional costs for the domestic haulage industry.
The FTA’s third condition is that there must be meaningful and financially significant penalties for operators who evade the charge. The Bill sets out a detailed enforcement strategy for non-payment of the levy and for mis-payment at the wrong rate. Because each payment will be vehicle-specific, the Bill commits the DVLA to using automatic number plate recognition technology to target vehicles present in the country for which no levy has been paid. There will be on-the-spot fines and a fine of up to £5,000 upon conviction in court. I should like to ask the Minister how non-UK-registered vehicles that have left the country and have not paid the levy will be pursued.
A few issues need to be resolved, so I shall put some questions to the Minister. How will charging work in Northern Ireland across the land border with the Republic of Ireland? How will holders of reduced pollution certificates be compensated through replacement grants? Detailed arrangements have been announced for tow-bar combinations and their inclusion in the scheme. As I have said, we need to look at operators who are using the types of vehicle where there will be a higher net charge, particularly the operators of 28-tonne 2+2 artics. The FTA said:
“Overall, we are pleased with the Government’s plans to address this long-standing disparity between UK and foreign vehicle costs. Our main concerns seem to have been met and we will investigate further outstanding issues with members”.
In conclusion, the Bill is good for the road haulage industry, which is hugely important to my constituency and to the whole country. It is essential that we have a profitable, vibrant and safe road haulage industry for the country now and for our long-term economy.
Stewart Hosie (Dundee East) (SNP)
I did not plan to make a speech, but I have a question for the Minister. Because the introductory remarks by the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), were so extraordinarily short—less than a minute, I believe—I did not have an opportunity to ask it earlier.
I welcome the Bill. Anything that provides a level playing field that offers certainty is good not just for the haulage sector—it will be welcomed by the many professional haulage companies in my constituency—but for manufacturing, which relies on those hauliers, and, I do not doubt, for goods coming in and out of port. It will be really important when boxed stuff is being moved. I wonder, however, whether the measure contains an inadvertent loophole. The provision dealing with the time limit on recovery for underpayments says:
“No proceedings may be brought…by the Secretary of State for the recovery of any underpayment”
of the levy
“after the end of the period of 12 months beginning with the end of the period in respect of which the levy was paid.”
I wonder what that means for the very small number of bad hauliers, whether based in the UK or overseas, who try not to pay and think that if they can get away with it for 12 months, they will not have to pay at all. What is the thinking on this sunset clause on the recovery of underpayments? Has the Minister—I saw him nodding and smiling sagely—thought about looking at that again?
I agree with the hon. Members for Ogmore (Huw Irranca-Davies) and for North West Leicestershire (Andrew Bridgen) and although I welcome the measure in principle, it would be far, far better if the vehicle excise duty rates that will apply when the Bill is introduced, were known. I hope—I shall simply reinforce what others have said—that the Minister will reiterate what has been said before, and say that the net impact will be an almost zero increase for home-based hauliers, which is precisely what we need to achieve the level playing field that the Bill is designed to deliver.
Iain Stewart (Milton Keynes South) (Con)
I am pleased to have the opportunity to make a short contribution to this useful debate. Road haulage is an issue of some interest to me, first as a proud member of the Transport Committee. It is, as the Chairman of the Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman), said, a subject that we have studied on a number of occasions. I will not detain the House by repeating the points that she made. Secondly, given the location of Milton Keynes and its strategic position, we are home to a large number of logistics and distribution companies. It is a hugely important sector of the local economy. That is in addition to the usual range of small and medium-sized hauliers to be found in urban areas throughout the country.
Like many Members, I have long been aware of the competitive disadvantage that our hauliers have faced. I have received a considerable volume of representations from hauliers based in my constituency that there is a need to end this unfair situation. That covers a number of points. First, as my hon. Friend the Member for Spelthorne (Kwasi Kwarteng) identified, it is a point of principle that people who use our roads should make a contribution to their maintenance and to expanding the road network. That is a basic common-sense view that is shared across the House.
Secondly, many haulage companies operate on very tight margins. They make only a small profit on the goods that they transport, and when they are faced with unfair competition, that can be a critical determinant of whether they prosper or go under. I had conversations with a local firm that did go under, partly because of the unfair competition that it faced.
A large part of the problem arises because modern lorries have such huge fuel tanks that it is perfectly possible for them to be filled up abroad and drive for considerable distances round our roads without ever having to fill up here. There is therefore no gain for the British Exchequer from duty paid. The hon. Member for Liverpool, Riverside mentioned the cabotage problem. Because of the fuel advantage, they can bid effectively for UK domestic haulage as well as international transport.
The strength of feeling that has been expressed to me by local hauliers is borne out by the strength of the responses to the Government’s consultation document. Well over two thirds of respondents agree that it is a serious problem that must be addressed. I was struck by one of the comments, which was that we need to get on with this quickly. It is an issue that has been debated for many years under Governments of both colours, and I am delighted that the Government have finally found a way to navigate their way round the labyrinthine complexities of EU law. I will not touch on some of the technical issues that might arise, but I hope those can be ironed out quickly when the Bill reaches its later stages.
I want briefly to pick up a point made by the hon. Member for Poplar and Limehouse (Jim Fitzpatrick)—I was about to say for West Ham, but I think that is a football matter, rather than a constituency one. He touched on the topic of rail freight. There is an important link between the measure, rail freight and strategic freight transportation. I have long been of the view that road freight and rail freight need to operate in tandem. Rail freight is viable and makes sense when goods are transported over a long distance. It is in everyone’s interest that the road part of haulage, when goods are distributed from rail freight terminals, is done as efficiently as possible. It goes without saying that it is good for the environment and for solving congestion on roads if we can transport more long-distance goods by rail and free up capacity for the shorter distances by road.
I have had some concern that because we have been at a competitive disadvantage in road haulage, that undermines the potential for international rail freight from the continent to this country and in reverse. I was on the Transport Committee’s visit to Europe last week, looking at rail issues. There we learned that in the Netherlands there is a new dedicated rail freight line across into Germany. In Switzerland new tunnels have been built through the Alps to aid freight travel from the north to the south of Europe. The potential difficulty is that if all these goods are transported by rail through Europe and they get to Rotterdam, say, and suddenly it is in the interest of haulage to switch to road because it can travel to the UK and pay a very low charge, that surely undermines the whole concept of an integrated freight system throughout Europe.
The measure before us will go some way to addressing that possible problem. We can look strategically at freight across rail and road in the European context. There are ambitious plans to improve rail freight, and plenty of spare capacity through the tunnel. There are new types of freight trains where the lorries can drive on to the low-slung rail wagons, which is extremely efficient. That may not be the main point of the measure but I hope it will be an additional benefit from it. I am delighted to support it today. I hope it makes speedy progress through the House. The subject that has been kicked around for far too long. Our hauliers have been at a disadvantage for far too long and it is about time we put that right.
Andrew Bingham (High Peak) (Con)
I add my support for the measure, echoing Members across the Chamber. Call me biased for saying so, but my constituency produces probably the finest limestone in the world. The quarries try to move much of their product out by rail, but that is not possible, so the majority is moved out by road using their own wagons and by owner-drivers. More worryingly, there is an influx of foreign wagons. The measure is fantastic because it gives us the level playing field that our hauliers need.
In a previous life I supplied engineering equipment, much of which went into haulage companies, and I realised how tight their margins were. They move the product and have very little room for profit, so foreign wagons can undermine their profitability and viability. We have heard about the other things that our hauliers have to pay. When they go abroad, they face road tolls and various other charges that must be paid. The diesel here is dearer, so the measure redresses the balance, giving us the level playing field that our contractors need.
We must remember that haulage contractors employ a significant number of people, not just the guys who drive the wagons. I was particularly taken with a remark from the Opposition Benches earlier. The phrase that was used was “our professional hauliers”. There is a misconception that is slowly but surely disappearing. I remember my days on High Peak borough council, when we had discussions about wagons. Somebody made a comment about wagon drivers, and “professional” is a word that we should never forget to use when we talk about the wagon drivers and hauliers of this country. They are moving huge machines around the country with tonnes and tonnes of product on them, and they must be professional to do such a job. I was pleased to hear that point made earlier.
I hope the Minister will address the question of revenue. I am pleased to see the compensatory factor. My hon. Friend the Member for Brigg and Goole (Andrew Percy), who is no longer in his place, commented on the fact that we have had to introduce the measure to get round the vagaries of the EU. I, like him, will not miss the chance to bash the EU on this issue. I am glad we have found a way round, but it is a shame that we had to do so. It would have been nice if it had been simple and straightforward. Thank you, Brussels—for nothing.
I want the revenue to go to our roads, because that is what it is all about. While the Minister is in his place, I shall make the first bid and propose that the Mottram and Tintwistle bypass is the first recipient of such extra revenue. He may wonder where that is, but I assure him that he will soon find out. His boss, the Secretary of State, well knows where it is, as his is the neighbouring constituency.
There is one other point that has not been mentioned—it is more anecdotal than anything else. There is a small part of my constituency where we have difficulty with a low bridge. The local authority has tried everything to divert wagons, because when they get to the bridge, which is at a little place called Chapel Milton—I dare say this is the first time it has been mentioned in the Chamber—they find a dead end with no space to turn around. They then try to go under the bridge but end up taking the corner off it. Local hauliers increasingly realise that, but foreign hauliers rely on sat-nav, which does not pick up on the difficulty. The damage and upheaval caused is often the result of foreign drivers not understanding the danger. Perhaps that something that could be looked at, once we have paid for the Mottram and Tintwistle bypass, of course.
The Bill will enable our hauliers to compete on a level playing field. We are going to have wagons on our roads, so let us make them UK wagons and give them a fair chance. There are some wrinkles in the proposals, to which colleagues have alluded, but I am sure that they will be ironed out bit by bit before the Bill reaches the statute book. The one thing I urge the Government to do is get this done as quickly as possible to give our wagon drivers and haulage contractors in High Peak and across the rest of the country the best chance of survival.
Mr Brooks Newmark (Braintree) (Con)
Like everyone else in the Chamber, I think that the HGV Road User Levy Bill is extremely welcome. Like the hon. Member for Dundee East (Stewart Hosie), I had not intended to speak, but then something rang in my brain, as I have many road hauliers in my constituency and I thought I would speak up for them. With regard to his comment about the brevity of the Minister’s introductory comments, it is clear that the Bill is so compelling that he needed only a minute to introduce it.
There are two key arguments I have heard from many independent operators as well as larger hauliers, such as the Prince group, in my constituency: the equity argument, which was raised by my hon. Friend the Member for Spelthorne (Kwasi Kwarteng); and the economic argument, which was raised by my hon. Friends the Members for Milton Keynes South (Iain Stewart), for High Peak (Andrew Bingham) and for North West Leicestershire (Andrew Bridgen). The equity argument is an important one that all road hauliers make, which is that it is simply unfair that road hauliers can come here from overseas and use our country’s roads but contribute nothing whatsoever to maintaining them. The Bill goes at least some way towards redressing that imbalance.
In these tough economic times there is also the economic argument. It is unfair that our road hauliers face such marginal costs, especially given the high price of fuel, so trying to equalise what foreign users pay for using our roads will create a little more equilibrium and will not give them the extra marginal cost advantage they have in these tough economic times. Given the equity argument and the economic argument, I wholly endorse the Bill.
Now that the Minister is in his place, I would like to thank him for the financial support he recently gave for the A120, which will help unclog the roads even if they are used by road hauliers.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I, too, have been tempted to contribute to the debate, as it relates to the port of Felixstowe in my constituency. The port is not known for its roll-off carriers and the immediate access it provides for foreign vessels to the A14, but the A14 is a key artery that starts in my constituency and cuts across to the midlands, passing not far from the constituency of my hon. Friend the Member for North West Leicestershire (Andrew Bridgen).
As has already been referred to extensively, hauliers feel that it is right that foreign hauliers pay their fair share. Some points have already been made today about how we can ensure that a fair share is paid. I know that it is planned that the database will be given to a private contractor to follow this through, so I wonder whether at the same time it might be given a bonus for using the database to recover fines for other traffic regulation violations.
It is important to send to our haulage companies the message that this is not a tax on them, that the Government are aware that they cannot keep imposing extra charges on British businesses and that there will be compensation the other way through lower vehicle excise duty. My understanding is that, although there will be no winners as a result of this scheme, there could be some losers, which is concerning for some of our larger firms. We need to ensure that we are careful in how we deploy the regulations that will be introduced.
I can see that the Minister is a bit busy at the moment, but I am meeting him tomorrow with a delegation of MPs from Suffolk, and he will certainly be hearing from me that one of the proposals for the A14 might be to start tolling. I am a good Conservative and not necessarily against road tolling in all parts of the country, but the Government need to think about that where new capacity is brought in, and should not just pick key logistics routes. Therefore, if not all money raised through the levy is to go back to British hauliers through a reduction in VED—I know that the Minister has to be careful with the European Commission in how that happens—I will be asking him tomorrow instead to think about how some of it might be used to avoid tolling on a trans-European network road. I am delighted to support this ways and means motion.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
We have had an informed and educated debate with excellent contributions from both sides of the House. I am delighted that Members on both sides of the House welcome the Bill, but I am also delighted that it is this Government who have finally found a way to introduce it. As my colleague, the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), said in his short—perhaps too short for some colleagues—introductory contribution, the Bill will go a long way towards putting in place a fairer deal for UK hauliers and correcting the inequality that has existed for far too long.
As a number of Members who have spoken rightly recognised, freight bodies have long called for the introduction of charging, provided that the cost burden on UK hauliers remains roughly neutral. Introducing this charge will clearly help to level the playing field by ensuring that both UK and foreign hauliers pay equally for using the UK’s road network. The Government believe that it is right that vehicles that cause wear to our roads should make a payment to take account of that. HGVs registered abroad are likely to carry more weight on fewer axles than UK-registered vehicles, which means that they are more damaging to the roads. Therefore, it is all the more unjust that they currently do not contribute towards the maintenance of the roads they use, leaving the burden to fall entirely on the British taxpayer.
Bob Stewart (Beckenham) (Con)
I have been listening to the debate and assume that a foreign HGV will not be allowed to leave a port of entry without a sign on its windscreen showing that it has paid. Is that what the Bill means?
Stephen Hammond
I am delighted to confirm to my hon. Friend that that is what the Bill means, and I will expand on that further in my remarks.
Karl MᶜCartney (Lincoln) (Con)
Can the Minister confirm whether it is true that the wear and tear caused to a stretch of road by one journey by an HGV vehicle equates to 100,000 car journeys?
Stephen Hammond
I would like to be able to confirm that statistic, which may or may not be true, but I cannot do so at the moment. I will seek divine inspiration at some stage and write to my hon. Friend.
Stephen Hammond
I will, although I was going to address the hon. Gentleman’s remarks in a moment.
Huw Irranca-Davies
As the Minister seeks inspiration, could he also try to find some inspiration on what impact the introduction of longer HGVs has had on road maintenance?
Stephen Hammond
I would prefer to write to the hon. Gentleman about that, as I might invite Madam Deputy Speaker’s strictures were I to deviate too far from what we are supposed to be talking about. Having listened to his experiences as a Minister, I know that he will be aware of how easy it can be to do so from this Dispatch Box. Tempting though it is, I shall resist it this afternoon.
The largest and heaviest vehicles will pay a time-based levy of up to £10 per day or £1,000 per year. We consider that fair, proportionate and compliant with the relevant EU regulations. Foreign vehicles will be able to pay daily, weekly or monthly to enable them to maximise flexibility. Linking the levy and the vehicle excise duty payment, and working with the Treasury and the Chancellor to include reductions in VED payments in the 2014 Finance Bill, will ensure that the vast majority of UK hauliers will pay no more than they do today. There will be a zero administrative cost for most UK vehicles. Vehicles that currently pay VED usually do so annually. In future, UK hauliers’ VED will cover both the reduced level of VED and the new charge in one payment.
Stephen Hammond
I will give way, although I was going to try to clarify many of the points raised by the hon. Gentleman and others in a moment.
Huw Irranca-Davies
The Minister is being very generous. May I seek his explanation as to whether the technology that is being introduced by this ways and means measure is the same as that which could be used for further vehicle charging should the Government decide to embark on a wider road charging exercise?
Stephen Hammond
Yet again, the hon. Gentleman tempts me down a line that is grounded in speculation rather than anything else.
Stephen Hammond
I hope in a moment to respond to the hon. Gentlemen’s detailed remarks, and to those of the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), and I will invite them to intervene on me again if I do not do so.
Andrew Bridgen
I have a question that I did not ask during my brief speech. How often does the Minister envisage the road user levy will be reviewed by the Treasury? Will he consider calling it a Brit disc, which would be a nice patriotic name?
Stephen Hammond
I think that my hon. Friend will find that the levy will reflect some fluctuations in the exchange rate, but the level of VED is a matter for the Treasury and it is usually set annually. As to the change of name, we would like to get the Bill on the statute book with this name first before considering anything else.
We will ensure that hard-working hauliers do not face an additional administrative burden, so the levy will be part of one payment when they renew their vehicle excise duty. To ensure that all the benefits of the levy are felt as soon as possible by carriers, the Government intend to bring forward the implementation date for foreign hauliers by almost a year to April 2014. Due to the time needed to change systems for UK hauliers’ payments and to hold a robust procurement of the provision of the payment facility to foreign-registered hauliers, it is not possible to bring the overall levy introduction date any further forward than April 2014.
I should make it clear that this legislation is not designed as a precursor to increased charges on business. The charge has a clear, focused objective. The introduction of the levy is entirely separate from any other reviews that my Department might be undertaking. Whatever the outcome of those reviews, we will ensure that HGVs are not charged twice for using the UK road network.
Jim Fitzpatrick
I apologise for interrupting the Minister’s remarks. He has referred to two of my questions, one of which concerned the impact on HGV hauliers who are not covered and who will be paying extra, and the point that he has just made also reflects a question that I asked. I do not want to intervene on him repeatedly, so will he confirm that, as he said, he will answer my questions later?
Stephen Hammond
We believe that the database developed as a result of collecting charges from foreign-registered hauliers will help us to understand their patterns of road use better and will contribute to our efforts to improve the safety and compliance of all commercial vehicles travelling on the UK’s roads.
Finally, I should like to return to and, I hope, clarify some of the questions asked by hon. Members. The hon. Member for Poplar and Limehouse opened his remarks with a welcome for these measures, and I am pleased that he did so. His speech was the sort of speech that we expect from him; it was intelligent and inquisitive. He asked a whole range of questions about the draft Bill.
First, the hon. Gentleman asked about clause 3(2)(a). The clause allows us to consider the future exemption of roads. For example, Wales might want to introduce charging or we might agree with Northern Ireland that certain roads that cross the border should be exempted. On the administrative fee, I hope that my earlier remarks gave him confidence.
The hon. Gentleman asked about clause 9 and the rebate. The Bill allows us to set the administrative conditions that will pertain for rebates. For UK vehicles, charged rebates will be allowed on the same basis as those for vehicle and excise duty. An administrative fee, if introduced at all, will only be set at a level to cover the administrative cost.
The answer to the hon. Gentleman’s question about hypothecation and the money being paid into the consolidated fund is twofold. First, normal taxation rules apply and, secondly, the directive states:
“Member States shall determine the use of revenues generated by this Directive.”
I also point out to the hon. Gentleman that this Government’s spending review committed £30 billion for roads, rail and infrastructure. I should also like to highlight the other transport settlements and, indeed, the good news that we gave to local pinch-point schemes only 10 days ago.
Jim Fitzpatrick
I am sorry to interrupt the Minister again, but does that mean that the consolidated funds will not be hypothecated for transport issues, as has been requested by a number of his hon. Friends? Will the Department have to make a bid to the Treasury to get some of that money back?
Stephen Hammond
I have said that the normal rules will apply and that the directive allows the UK Government to spend the money in the way that they consider appropriate. The money will go into the consolidated fund. The Department for Transport has enjoyed robust discussions with the Treasury and got an excellent settlement for the infrastructure of this country. I have no doubt that we will continue to have robust discussions in the future and I am sure that we will continue to receive a good settlement for transport.
The hon. Gentleman asked about the number of hauliers paying more per year. The analysis so far shows, as he has pointed out, that 98% of hauliers would pay no more than £50 a year and that 94% would pay nothing at all. My understanding—I am sure that we will explore this and I may be able to inform the hon. Gentleman later of the latest numbers—is that the maximum loss for conventional HGVs that are either articulated or rigid and do not have a trailer would be £79 a year, based on current exchange rates. Unfortunately, however, our analysis of 7,000 rigid vehicles that tow a trailer has found that 40 vehicles would probably suffer a penalty of some £300, but that is only 40 out of 7,000, which is a significantly small part of the overall haulage fleet of the United Kingdom.
The hon. Gentleman also asked about the rebate that might be applicable to UK hauliers using foreign roads. As is the case with vehicle and excise duty, it is not possible to get such a refund, so the charge would be cheaper than any daily charge. UK hauliers are unlikely to benefit from such a refund.
The hon. Gentleman then asked some general questions, some of which I tackled earlier. On the staging of the levy, he will have heard me say that we have brought the date forward so that there will be a simultaneous introduction in April 2014. He will have also heard me set out the conditions for paying VED at the same time as the levy, so they will net each other out.
My Department does not believe that the opt-out from the European directive on traffic law enforcement will have any implications. We have a robust strategy of enforcement. Vehicles must pay before using a road in the UK and we can stop any that do not and immobilise them until a fine is paid. Again, I am sure that we will explore that matter in Committee.
The hon. Gentleman made some closing remarks about the environment. There is no change to the incentives for greener vehicles. We are committed to considering charging based on polluting carbon vehicles in the future, but for the moment the charging that will be put in place is practical and enforceable. I believe that there will be no disincentives for the green lobby.
I listened carefully to my hon. Friend the Member for Brigg and Goole (Andrew Percy). I thank him for his welcome. He echoed the remark from my hon. Friend the Member for High Peak (Andrew Bingham) about the complex way in which we are doing this, because of the EU rules. However, I am sure that he, like me, is delighted that we are doing it anyway and will raise a cheer for that.
The Chair of the Transport Committee raised a number of points. We will tackle cabotage and the safety issues that she raised on Second Reading and in Committee. However, I say to her directly that we will ensure that the Vehicle and Operator Services Agency has all the necessary resources to ensure that its enforcement procedures are workable. We believe that the measures will ensure that the collection procedures are completely workable.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Will the Minister clarify whether in his future discussions about safety he will raise improving the safety of cyclists, who are particularly at risk from HGVs?
Stephen Hammond
I thank the hon. Lady for those remarks. Her colleague the hon. Member for Ogmore (Huw Irranca-Davies) raised that issue and I am about to respond to his points, so I will address her remarks at the same time.
I welcome the recognition by my hon. Friend the Member for Spelthorne (Kwasi Kwarteng) that this is a commitment being delivered upon. He is no longer in his place, but I was delighted that he recognised that. He asked the rhetorical question: is it right that foreign users contribute to our roads? Of course it is. That is why this measure is being put in place and I am delighted that we are doing it now.
The hon. Member for Ogmore opened his excellent contribution with his impassioned support for businesses along the M4 corridor. I will try to answer some of his questions. He, too, asked about enforcement, with particular reference to the police’s role in enforcement beyond VOSA. The police, of course, can enforce this legislation and prosecute offenders. It will not be their main objective, and the primary responsibility for enforcing it will lie not with the police but with VOSA, as I have made clear.
The hon. Gentleman asked whether, if foreign hauliers could pay the bill on a daily, weekly, monthly or annual basis, there would be issues to do with the setting of the rate and the ability to do so. I would say two things to him in response. First, we are allowing that flexibility to ensure that we capture everybody who intends to come to the country. Secondly, at the same time the level of the payments will be set annually in the Finance Bill.
The hon. Gentleman made some remarks about how we will offset the compensation for UK hauliers. I hope that my remarks to the hon. Member for Poplar and Limehouse will have clarified that matter for him. Equally, on the question of the charge level, as he knows, the Eurovignette sets a maximum of €11 a day for time-based charges. The maximum that that is likely to increase to owing to inflation is €12. Unlike other EU countries, we are not going to have a lower daily rate, but will look at the daily rate that is permissible.
The hon. Member for Ogmore rightly asked what action I and my officials had taken to reassure ourselves that the levy was not discriminatory. I took quite a lot of action because, as he might well guess, my first concern was that if there had been a significant time delay it would have discriminated against UK hauliers. I am delighted that my officials, working with EU officials, have now been able to secure the agreement that we can introduce the duty for both groups in 2014. I confirm that to ensure that was the case, officials spoke to the Commission before the consultation, and it indicated that it was content with our emerging proposals.
The hon. Gentleman asked about the amounts that we intend to charge. We are clear that they are as set out in the directive and that our plans comply fully with it.
I will now answer a question that I thought the hon. Gentleman might ask, just to help him along—I am in that kind of mood this afternoon. I thought he was going to ask me why the Welsh Government might think it necessary to lay a legislative consent motion. He did not, but let me put it on record that in our view, that is not necessary. The HGV road user levy is a tax, and taxation is a reserved matter. I believe the Welsh Assembly is concerned that there will be some problems because EU law prevents double-charging for the same stretch of road except in certain circumstances. However, we have said that if a devolved Administration wanted to introduce a charge or toll, we would modify the HGV road user levy as necessary so that could be done. I confirm that my officials and Welsh officials have spoken about the matter in the past week. The Scottish and Northern Irish Governments have decided that no legislative consent motion is necessary, but it is of course for the Welsh Government to decide whether they wish to pursue one. I thought I might take the opportunity to put that on record.
I believe that I have covered all the hon. Gentleman’s queries, except about cycle safety campaigning. He will know that I was delighted to be able to be at the National Transport Awards the week before last, along with my fellow Under-Secretary of State for Transport who was perhaps on more verbose form that night than in the House today, and to present an award to Philip Pank, the journalist from The Times. The hon. Gentleman will also know that in my second week in the job, I was delighted to be able to launch the Think Cyclist campaign.
As I have indicated, road safety is a key road policy priority for the Government, and the hon. Gentleman will have noted that we have made significant extra money available to local councils in the past six months for local cycle safety solutions. I am happy to work with the industry throughout the Bill’s progress and thereafter to ensure that road hauliers are aware of the need for cycle safety. I am aware, of course, that many of them already recognise that imperative.
My hon. Friend the Member for North West Leicestershire (Andrew Bridgen), spoke about his passion for road haulage. He raised a couple of matters on which I may be able to give him some clarity this afternoon. Although he recognised that there would be a charge of £200 for roadside infringements and a maximum fine of £5,000 for cases that go to court, he was concerned about how we would be able to enforce that. We will be able to take deposits from road hauliers if they do not have a UK address and, as has been pointed out, we intend to pursue them so that the charges are made payable before they enter the UK road system. The necessary enforcement measures will be in place if anyone attempts to enter for a second time without paying those charges.
My hon. Friend also asked about Northern Ireland. I have already put it on record that we believe that this is a tax matter, and therefore a reserved matter that will apply right across the UK. However, as I said when the Welsh Government raised the issue, the Government have no intention of reducing the ability of the devolved Administrations to introduce tolling or charging if they so wish.
My hon. Friend asked specifically about the Irish Government, who have written to the Department asking for the charge not to apply in Northern Ireland. That is partly because they make a financial contribution to some road improvements in Northern Ireland, which they do because Irish hauliers use those roads and benefit from them. Furthermore, Ireland already has road charges in the form of tolls, and should the new charge apply in Northern Ireland, it would be roughly the same amount as those existing tolls—a round trip between Belfast to Dublin would incur roughly the same amount. We have suggested that if the Irish Government were to propose a set of roads that criss-cross the border, we will look to exempt them from the charge.
The hon. Member for Dundee East (Stewart Hosie) raised a point about the 12-month period, and I will explore that matter further and write to him if he will accept that. My hon. Friend the Member for High Peak spoke about the finest quality limestone and how it gets moved around the country. I hope that his local press statement will say, “If it’s thank you Brussels for nothing, it’s thank you to this Government for something”—I am sure that is how he will phrase it. I have obviously heard his strictures about the new bypass from Mottram to Tintwistle, and the bridge at Chapel Milton. I have no doubt that an invitation to come and visit those places is already winging its way from High Peak to Great Minster House, and I look forward to receiving it.
Jim Shannon (Strangford) (DUP)
The Minister referred to a previous matter in relation to the Irish Government. A new bridge is to be built across the narrows, near Warrenpoint, and the Irish Government are going to pay for that. There will be no toll on that bridge. Is there an agreement with the Irish Government that they provide the bridge and there will be no toll?
Stephen Hammond
Well—[Interruption.] Mr Deputy Speaker, you are right on all matters, and certainly on that one. If I may, I will write to the hon. Member for Strangford (Jim Shannon) as I am afraid I do not know the answer. Although I could stand here and talk about something, it is better to say that I will write to him when I have the answer.
My hon. Friend the Member for Braintree (Mr Newmark) congratulated a number of his road hauliers—rightly so—and he got to the essence of the argument, which is about equity and economics. He was right to point that out and place it on the record, and I am delighted that his constituency has benefited from the pinch points plan that the Government announced two weeks ago.
This has been a well-informed debate and we heard two contributions, including from my hon. Friend the Member for Milton Keynes East (Iain Stewart), about modal shift.
Stephen Hammond
Sorry. My hon. Friend the Member for Milton Keynes South—an important distinction—made an important point about modal shift and the encouragement of rail freight, and I combine that with the contribution from my hon. Friend the Member for Suffolk Coastal (Dr Coffey), who is no longer in her place. She made a point about the A14 being a key artery, and I will be delighted to meet her over the next couple of days to discuss that matter. She also made the point about a modal shift now that improvements have been made to the rail system out of Felixstowe. That is absolutely right, and I am convinced that the Bill does nothing to impair modal shift, but will enhance it.
Andrew Bridgen
One important question has not been asked in this debate, and if the Minister knows the answer, perhaps he will share it with the House. What is the estimate for the amount of money that will be raised from foreign hauliers by the introduction of the road user levy?
Stephen Hammond
That is an important question, and my hon. Friend is right to say that it has not been raised so far. The Department estimates that somewhere between £18.7 million and £23.1 million will be raised at current prices, but I am sure that as the years go by, that sum will increase.
I believe I have comprehensively reviewed my colleagues’ contributions—
Mr Deputy Speaker
The hon. Gentleman has used his intervention up, but I will let him have another go. [Laughter.]
Mr Newmark
Hon. Members have articulated the views of the road haulage industry in their respective constituencies. Will the Minister spend a couple of minutes going into a little more detail on the consultation he had with the industry and on its input, and explain why the Bill is the silver bullet that will make the road haulage industry in the UK happy?
Stephen Hammond
I would like to tell my hon. Friend the dates, places and times of the meetings, but unfortunately the excellent preparatory work on the Bill was done prior to my time in this role—it was done by the current Minister of State, Northern Ireland Office and officials when he was an Under-Secretary of State for Transport. As I have said, an extensive consultation took place and has been published. The measure received widespread support, albeit with a number of questions on how the scheme might work and be implemented, which has been reflected in the debate—a number of the questions were similar to those raised by road hauliers.
However, I am delighted that we have reached the stage we have reached today. The Bill is widely recognised in the House as a welcome measure for UK hauliers and UK industry. All hon. Members have welcomed it. I recognise that this is a slightly unusual way to introduce legislation, but it has enabled us to have an extensive and inquisitive debate.
Andrew Percy
We look forward to welcoming the Minister to Brigg and Goole shortly—he will be getting an invitation in the post. Will he respond to the question I posed to him earlier on whether we could expect an increase in dual-registered vehicles as a result of the measure?
Stephen Hammond
My hon. Friend is right and I apologise for having failed to respond to that part of his excellent contribution. I am not sure I have at my fingertips the exact number of dual-registered vehicles in the UK, or the number of those likely to enter the UK, or the likely growth in the number of dual-registered vehicles—[Interruption.] It is just as my hon. Friend the Member for North West Leicestershire points out. However, as I have said to several hon. Members, I am happy to write to my hon. Friend the Member for Brigg and Goole. I am sure my letter will include my response to his kind invitation to visit Brigg and Goole, which I look forward to doing. One of the great pleasures of this job is the chance to visit all parts of the UK.
Martin Vickers (Cleethorpes) (Con)
In order to arrive in the Brigg and Goole constituency, the Minister will travel along the A180, which is heavily used by road hauliers in Stallingborough and Immingham dock in my constituency. One problem is that the A180 has a very old concrete surface that causes great disturbance to local residents. The £18 million to £23 million that he will raise from the measure will more than cover the cost of improvement. I therefore invite the Minister to visit Cleethorpes and Brigg and Goole, and to journey on that rough road.
Stephen Hammond
I thank my hon. Friend for that detailed explanation of the problems with the A180. I have no doubt that the chief executive of the Highways Agency will be on to me in the morning to tell me what his plans may be at some stage in the near or distant future for that road. I am bound to reflect that when I was in this role in opposition, I was spokesman for the rail industry, and by the end of it I had a near-encyclopaedic knowledge of almost every rail station and route in this country. I am increasingly finding in government that that opportunity is being extended to me on the road system. I am really looking forward to visiting the A180 on the way to Brigg and Goole. I have no doubt that my hon. Friend will invite me to stop in his constituency as well.
We have had a long and interesting debate this afternoon and we have fully explored the legislation that is the subject of this ways and means resolution. I was delighted that my ministerial colleague was able to introduce the debate earlier and I am also delighted to commend it to the House.
Question put and agreed to.
Resolved,
That provision may be made for charging a duty of excise, to be known as HGV road user levy, in respect of heavy goods vehicles used or kept on public roads in the United Kingdom.
Ordered, That a Bill be brought in on the foregoing Resolution;
That the Chairman of Ways and Means, the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Mr Secretary Hague, Mrs Secretary May, Mr Secretary Grayling, Mr Secretary Moore, Mr Secretary McLoughlin, Mrs Secretary Villiers, Mr Secretary Jones and Stephen Hammond presented the Bill.
Hgv Road User Levy Bill
Stephen Hammond accordingly presented a Bill to make provision charging a levy in respect of the use or keeping of heavy goods vehicles on public roads in the United Kingdom, and for connected purposes.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 77) with explanatory notes (Bill 77-EN).