The Secretary of State for Transport (Mr Patrick McLoughlin)
I beg to move, That the Bill be now read a Second time.
As the House knows, the reason for this Bill is to enable the introduction of a new levy for all heavy goods vehicles weighing 12 tonnes and over that are kept or used on the UK road network. We plan to implement the levy from April 2014 for UK-registered hauliers. Subject to the completion of a procurement process, it will apply to foreign-registered hauliers from the same date.
We intend the levy to apply to all categories of public roads in the UK and to both UK and foreign-registered HGVs. Vehicles that cause wear and tear to our roads should make a payment that takes that into account. HGVs registered abroad are more likely to carry their weight on fewer axles than UK-registered vehicles, which means that foreign-registered vehicles cause more wear and tear to our roads. It is therefore more unjust that they do not make a contribution towards the maintenance of these roads. They leave the burden to fall entirely on the British taxpayer.
Robert Flello (Stoke-on-Trent South) (Lab)
What about foreign truck drivers who come over with large tanks full of fuel and who do not contribute to the ordinary wear and tear on our roads because they do not pay the fuel duty?
Mr McLoughlin
I take the hon. Gentleman’s point. Under this Bill, we will at least charge them something to use British roads—at the moment, they pay absolutely nothing. Although I am not saying that this is the entire answer, we are moving in the right direction.
Foreign hauliers using roads in the UK have long enjoyed an advantage over our own haulage industry in that they do not pay to use the UK’s road network, while our own hauliers pay to use roads through tolls and other charging schemes when they travel abroad in Europe. For many years all main parties have wanted to introduce a measure to correct that imbalance and I am delighted that this Government are actually doing it.
I am sure that the House recognises that HGVs play a crucial role in our economy by supplying businesses and servicing customers. More than two thirds of all goods moved within the UK travel by road and, in the main, on HGVs.
Mr Gordon Marsden (Blackpool South) (Lab)
The Secretary of State is right to pay tribute to the work done by HGVs in this country but, at a time when UK hauliers and other businesses that make deliveries are suffering economically, will he outline the rationale behind introducing the Bill now? What other things will the Government do to protect UK hauliers from additional costs?
Mr McLoughlin
The reason for introducing the Bill now is to try to level the playing field and to take action that the previous Government talked about but, I am afraid, never found the time to do anything about. I make no apologies for wanting to do this now. I wish it had been done sooner, but at least we are doing it at our first opportunity.
A key part of the movement of goods is provided by foreign hauliers and the Government recognise the important contributions they make to the economy. They make 1.5 million trips to the UK every each year, and we do not wish to discourage free trade with our partners in other countries. However, it is only right that we ensure that our own haulage industry has a fair chance to compete, and I hope that the Bill goes some way to achieving that. I met some hauliers when I announced the Bill and they said that it would lead to more jobs in this country.
As colleagues will be aware, any road user charge is subject to the strict conditions set out in the Eurovignette directive, which provides a framework for charging on roads and specifies the maximum daily charge as €11. That is likely to rise to €12 by 2014, which will mean that it should equate to the £10 a day that we intend to charge the largest vehicles that use our roads.
I also recognise that many trips made by foreign hauliers take longer than one day, so they will also be able to pay the levy for different periods, up to one year. In the case of the largest vehicles, this annual charge will be £1,000. Our estimate of the revenues that will be gained as a result of foreign hauliers paying a charge is between £19 million and £23 million a year. Although that is not enormous, it shows we are doing something that is clearly wanted. That is why the Bill is right. The Government are also committed to introducing other measures—principally vehicle excise duty reductions—that are not part of this Bill to ensure a fairer deal for HGV drivers.
I will now go through the Bill’s points of interest.
Huw Irranca-Davies (Ogmore) (Lab)
I have a question about something that I genuinely do not understand. The new levies will be welcome, but why will there be a delay, as I understand it—I may be wrong—between their imposition on UK hauliers, who will have to pay first, and on non-UK hauliers?
Mr McLoughlin
I very much hope that there will not be a delay. As I have said, I intend the levy to be introduced in April 2014, subject to certain procurement measures. Once it is introduced in this country, there will be a reduction of a similar amount in VED charges, so our lorry drivers should not pay anything extra. Foreign drivers will be charged from, I hope, April 2014. I hope that that addresses the hon. Gentleman’s question.
Robert Flello
The Secretary of State is being extremely generous with his time. Will he clarify why overseas hauliers are not required to pay for a year up front, but can pay on a daily, weekly or monthly basis? Is there a legislative reason why they cannot be asked to make an annual up-front payment, as with VED?
Mr McLoughlin
Overseas hauliers will pay in advance of coming to this country. However, asking somebody who is bringing a lorry over for a day to pay for a full year would be quite unfair. We are therefore allowing them to pay daily, weekly or yearly. Most HGV drivers who come to this country regularly will find it much more convenient and a lot cheaper to pay for the year than to pay for each individual day. I hope that that clears up the hon. Gentleman’s point.
The Bill states that HGVs weighing more than 12 tonnes will have to pay a duty of excise levied by the Secretary of State if they are used or kept on a public road within the United Kingdom. It will be known as the HGV road user levy. It will be charged to allow both UK-registered and foreign-registered vehicles to use our roads. The levy applies to all roads in the UK. However, clause 3 provides the power for the Secretary of State to exempt specific roads from the charge by way of statutory instrument, should the need arise.
Clause 4 sets out the liability for the levy. For HGVs registered in the UK, liability for paying the levy will lie with those in whose name the vehicle is registered and with the person keeping the vehicle. That applies the principle used for vehicle excise duty in section 1 of the Vehicle Excise and Registration Act 1994. That allows for the levy on UK-registered vehicles to be paid at the same time as vehicle excise duty. For non-UK-registered HGVs, the person who holds the Community licence for the vehicle and the person who keeps the vehicle are liable to pay the levy. For both UK-registered and non-UK-registered vehicles, when two or more people are liable to pay the levy, they are jointly and severally liable.
Clauses 5 and 6 set out the methods of payment for UK-registered and non-UK-registered vehicles. For UK-registered vehicles, the levy will be paid either yearly or half-yearly at the same time as vehicle excise duty. Where appropriate, rebates may be made for vehicles that are stolen or destroyed. The circumstances under which a rebate will be available and the method of calculating the value of a rebate, together with other conditions that must be met to make a claim, are covered in clause 7.
Some types of rigid vehicle weighing less than 12 tonnes will be exempt from the charge. The Bill also provides powers to allow the Secretary of State to make regulations that exempt some categories of HGV from the charge.
Collection and enforcement of the charge, and related elements, are covered in clauses 9 to 16.
Huw Irranca-Davies
Before the Secretary of State continues, will he clarify one point? Again, I am happy to be corrected. I believe that the Bill sets out that different and potentially higher levels may be charged for weekly or monthly payments for non-UK HGVs. I am not against that. However, will he give a cast-iron guarantee that it does not infringe any anti-discrimination trade provisions within the EU?
Mr McLoughlin
Yes, we have covered that. The hon. Gentleman is obviously going to take part in this debate and may well find himself on the Public Bill Committee in due course, so he will be able to cover that point in much more detail. I am glad that the Committee is tempting and am sure that the Opposition Whip has made a note of his details. [Interruption.] Was the hon. Gentleman making a request to be on the Committee? Perhaps he would like to share it with the House.
Huw Irranca-Davies
Regrettably, I have to inform the House that I am on another Committee.
Mr McLoughlin
I give way to the hon. Member for Poplar and Limehouse (Jim Fitzpatrick).
Jim Fitzpatrick
We are grateful to the Secretary of State for trying to recruit our members of the Committee. Much as I would love to see my hon. Friend the Member for Ogmore (Huw Irranca-Davies) on it, I think that the Secretary of State should leave it to us and the Whips.
Mr McLoughlin
I apologise to the Opposition. I was going back to my old territory, which I must not trespass on any longer. I am glad that we have managed to smoke out the hon. Member for Ogmore (Huw Irranca-Davies) as to his willingness and availability. I am sure that he gives distinguished service to the other Committee. I must check which it is after this debate.
The level of vehicle excise duty evasion among UK hauliers is extremely low at less than 1% of vehicles. I have no reason to anticipate that that will change once the levy is introduced. To reduce the administrative burden, the levy will be paid at the same time as VED. We have looked at ways to make the introduction of the levy cost-neutral for UK hauliers. To do that, we will reduce the level of VED to take account of the new charge. That reduction will mean that an estimated 94% of UK hauliers will pay no more than they do at the moment and that 98% will pay no more than an additional £50 a year. Clause 15 allows the Secretary of State to refuse to issue a tax disc when the appropriate levy has not been paid. That will lead to vehicles being unlicensed, which brings the associated penalties of immobilisation, removal and disposal.
For foreign-registered hauliers, a system will be procured to allow the levy to be paid online before the vehicle enters the country. The levy is based on the length of time, so visiting hauliers will have to select the period for which they will be using UK roads. The options will go from a single day to a year. Once a haulier has paid the right fee, the payment record will be entered automatically into a database, allowing enforcement agencies to check the status of any HGV using UK roads. Information relating to whether a vehicle has paid the levy will be made available publicly.
There is a risk of foreign hauliers evading the new charge. We will ensure that the Vehicle and Operator Services Agency, which will enforce the charge in England, Wales and Scotland, and the Driver and Vehicle Agency, which will enforce the charge in Northern Ireland, are properly equipped to do the job from the start.
Huw Irranca-Davies
May I take this opportunity to invite the Secretary of State to join me on the Groceries Code Adjudicator Public Bill Committee at his earliest convenience? Does he foresee any problems in enforcing this wonderful measure owing to the Government’s decision to opt out of the EU directive on cross-border enforcement?
Mr McLoughlin
I am grateful to the hon. Gentleman for sharing with us which Committee he is sitting on. The Committee on this Bill will really miss his attention to detail. I have no reason to believe that there will be any of the problems that he mentions. I have assured myself that what we are doing is wholly within the law and within EU competition rules.
For non-UK hauliers, there will be no physical sign of the levy having been paid. I believe that paper discs or similar signs would impose a needless burden and open the door to fraud. One of the main methods that we will use to detect vehicles that have not paid the charge is by linking our automatic number plate recognition cameras to the payment database. The use of that technology will enable quicker checks to be made on all HGVs. The power to install such equipment where it does not exist is being introduced in the Bill by amending the Highways Act 1980, the Roads (Scotland) Act 1984 and the Roads (Northern Ireland) Order 1993 in clause 16.
Robert Flello
What will be the situation if an overseas haulier, either deliberately or by omission, does not purchase a sufficient amount of time? What will happen to the load that a vehicle is carrying if it is seized by one of the agencies?
Mr McLoughlin
Drivers will know that they have to pay the levy before they come into the country. If they fail to pay, the measures available to the enforcement agencies will be used. I make no apology for that. If they think that they will be here for three days, they should pay for three days.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
Will the Secretary of State give way?
Michael Connarty
Who will be fined? Will it be the driver or the owner of the vehicle? If it is a hired vehicle, who will suffer the fine?
Mr McLoughlin
The driver is responsible for ensuring that the vehicle that he is driving is covered. He is in charge of the vehicle.
The penalty is currently set at £200 and would also be paid in situations where the levy had been underpaid—if someone had declared a lower vehicle weight limit, for example, or the wrong number of axles. Clause 13 inserts the offence in schedule 3 of the Road Traffic Offenders Act 1988, which lists the offences for which fixed penalties can be given.
Where there is frequent non-compliance by a specific vehicle or haulage company, clause 11 will allow for the imposition of a fine up to category 5 on the standard scale—currently £5,000—when someone is convicted of failing to pay the levy. I hope that those measures, coupled with active enforcement, will be seen as a suitable deterrent. Collected fine revenues will be paid into the Consolidated Fund; there was a lot of debate on that when we discussed the Ways and Means resolution.
I am sure the House will agree that by creating fair competition for the UK haulage industry, the Bill will help finally to put right a wrong. I commend the Bill to the House. It is well overdue and should have been introduced some time ago.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
It is good to see the Secretary of State in his place for this Second Reading debate, and my hon. Friend the Member for Nottingham South (Lilian Greenwood) and I are delighted to see all three Conservative Ministers from the Department for Transport here this afternoon. By leaving a Liberal Democrat Minister in charge of the shop, the coalition Government have made a statement of their trust and confidence—or perhaps he has been given the afternoon off.
Mr McLoughlin
I think the hon. Gentleman will find that the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), is responding to a debate in Westminster Hall.
Jim Fitzpatrick
I am sure he would be under suspicion—no, I beg your pardon—I am sure he will be watched wherever he goes, because of the excellent job that he does as the senior and longest-serving Minister in the Department for Transport, having survived from 2010. I welcome his new colleagues to their places.
The Secretary of State took something like 18 minutes to move the Second Reading, which is par for the course. According to Hansard from 23 October 2012, column 861, the Under-Secretary, the hon. Member for Lewes, took a minute to move the Ways and Means motion—it actually felt like a lot less than a minute, but he was just procedurally introducing that debate.
The Secretary of State graciously said that both main parties have wanted to introduce this legislation, and I am sure he is aware that in my speech on the Ways and Means motion, I commended the coalition Government for finding a way to introduce this welcome measure.
I do not want to detain the House too long, because I spoke for 18 minutes during the debate on the Ways and Means motion—that was my Second Reading speech and is contained in columns 861 to 865 of Hansard from 23 October 2012, should anybody wish to look at it. We covered a lot during that debate, including road exemptions that the Secretary of State is implementing in clause 3(2). We covered hypothecation at length, and I am sure we will return to that in Committee. We spent a bit of time on road safety—particularly cycle safety—and whether the money raised from the scheme could be devoted to that. We also raised the Secretary of State’s discretion in clause 7(9), and asked questions about short sea shipping and moving freight from road to rail—we will continue to ask about that. We asked questions about the contract for running the scheme, the technology involved, and who is making the arrangements. Cross-border enforcement, which my hon. Friend the Member for Ogmore (Huw Irranca-Davies) raised a moment ago, was also part of the discussion.
A number of issues were raised during that debate. The Under-Secretary of State for Transport, the hon. Member for Wimbledon (Stephen Hammond) answered most of those points, although some were left without a response on the basis that they were detailed matters. I am sure we will look at those in Committee. In principle, however, the Opposition support this measure. We will want to look at the detail when the Bill goes to Committee, but we welcome its arrival in the House this afternoon.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
indicated dissent.
Michael Connarty
The Minister is indicating that that is not the case. If he is about to tell me that the levy will come in at exactly the same time for everyone, that would be a vast improvement.
Stephen Hammond
The Secretary of State confirmed that this afternoon in his opening remarks, and I confirmed that in the Ways and Means debate on 23 October. The only possibility of that not happening would be if there is a minor delay to the procurement of the database, but the reality is that we have moved it so that there will be simultaneous introduction.
Michael Connarty
I congratulate the Opposition Front Bench on winning that battle before it has even begun. That was a cause for concern for the Opposition, so I am pleased if that has now been swept away by their good offices and oration. It was an issue only a few days ago.
Will the Minister look again at whether there is a way to enable UK-based drivers to have the same options for payment as non-UK-based drivers? I made this point earlier. Why should it be that those not based in the UK will pay weekly, monthly or daily, but UK owners will pay every day, whether they run a vehicle or not? That seems to be somewhat strange.
Returning to the question of how to police the Bill, I have serious concerns. How does the UK guarantee collection of the fines—a point I made to the Minister? He indicated that it would be the driver who would be responsible. The reality is that the driver will be changed the next time the vehicle is sent into the country. The driver could be changed again, again and again. We are talking about a massive permutation of drivers. I have been attached to the police scheme twice in this place and have spent time with the Serious Organised Crime Agency. One difficulty we have is that people come into the country with the deliberate intention of stealing. They are brought to court, bailed and then disappear—they never come back to the country. Someone else will turn up in that or a similar vehicle to steal once again.
Is the Minister trying to tell us that they will be able to catch the driver, and that the next time the vehicle comes into the country it will not have a different driver? It is all right when there is a family car, and either the Minister or the Minister’s wife could have been driving the car when they were fined, as happened in the case involving a former member of the coalition Government, but it is not the same with a heavy goods vehicle. The owner can change the driver every single day, so why is it not the owner of the vehicle who gets fined? The fine would not be able to be avoided then.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
As my right hon. Friend Secretary of State for Transport said in his opening speech, the intent of the Bill is absolutely clear. It will help to deliver a fairer deal for UK hauliers, going some way to correct an inequality that has existed for too long.
On 23 October this year, we held an extensive Ways and Means debate, and I was urged to make a contribution that owed more to quantity than quality. Today, I have been urged to make my speech one of quality rather than quantity, and I will obey that stricture. I should like to thank the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) for the points he raised today and during the Ways and Means debate. He rightly said that the Bill was to be welcomed. I tried in the previous debate to answer some of his questions, and I shall try again to deal with points that he has raised, along with those raised by the hon. Members for Stoke-on-Trent South (Robert Flello), for Ogmore (Huw Irranca-Davies) and for Liverpool, Riverside (Mrs Ellman).
Vehicle excise duty rates will be published in the draft Finance Bill towards the end of 2013, so they will be known well before the start of the levy. There has been a great deal of discussion about enforcement today, and about whether opting out of cross-border enforcement arrangements would hamper enforcement. Let me make it clear that the cross-border enforcement directive is only about data exchange. As we said in the Ways and Means debate, and as my right hon. Friend said earlier today, there is therefore no question of enforcement being hindered by our not being involved in the directive. Outstanding fines and penalties can be pursued even if they are not in the directive.
Questions were raised about who is paying the fine. My right hon. Friend the Secretary of State was exactly right: it is the driver, but the registered vehicle keeper is jointly liable, so VOSA—the Vehicle and Operator Services Agency—or the Driver and Vehicle Agency can act against both, including by impounding vehicles and by taking drivers and operators to court. Drivers without a satisfactory UK address will be required to pay a financial penalty deposit on the spot by a VOSA enforcement officer. This enforcement strategy is designed to overcome the problem, raised by several Opposition Members, of foreign drivers fleeing back to their own country and out of UK jurisdiction. The question of enforcement has been well dealt with, and there is always the option of a prosecution in the magistrates court for the offence, as set out in clause 11.
Questions have been raised about what would happen if the load was seized and how much of it could be seized. The Bill makes it fairly clear that the whole load is seized. I will consider the point of my hon. Friend the Member for Sherwood (Mr Spencer) about a lorry that might be carrying bees, locusts or whatever else, and about what needs to be done at that stage. Let us none the less be clear: the Bill contains the power to seize the load.
As I said in the Ways and Means debate, the Welsh Government were seeking a legislative consent motion at that stage. Since then, after further discussions with departmental officials, they decided that they did not need to do this. Scotland and Northern Ireland had already said that. Let us be clear that the HGV levy is a tax, so it is a reserved matter, but we have no intention of limiting the power of any of the devolved Administrations to introduce charging if they so wish at some future date, and the Bill allows for geographic coverage of the HGV road user levy to be amended by order to allow this, if necessary.
The hon. Member for Strangford (Jim Shannon) asked about Northern Ireland. As I said in the Ways and Means debate, Ireland already has road charges in the form of tolls. The new UK charge applying in Northern Ireland is about the same as existing Irish tolls, so this would be relevant to a round trip from Belfast to Dublin and back again. It would be difficult to exempt Northern Ireland, because the Government are introducing this by means of reducing VED. If the hon. Gentleman wishes, I am sure we can explore the issue further in Committee.
To return to the main aims of the Bill and the key point about the level of charge, we consider our plan to charge large vehicles £10 a day or £1,000 a year to be fair, proportionate and compliant with relevant EU legislation. For the daily amount, we are seeking to charge the highest level permissible while remaining compliant with EU law.
Robert Flello
Does the Minister agree that it might be worth the Department going away and looking again to see if there are perhaps more creative ways of raising that amount? As Government Members themselves have said, a driver from the UK going across the channel and perhaps using an Autobahn or paying a toll in Germany might end up paying a great deal more than £10 a day.
Stephen Hammond
I will look at that again, but I can tell the hon. Gentleman that we have already looked at it in some detail. The clear requirement is to ensure that the Bill remains compliant with EU regulations and law about the vignette; at that level of charge, it does.
Several hon. Members, including the hon. Member for Stoke-on-Trent South, asked how many UK hauliers would not be better off. I can tell him that 94% of UK hauliers will pay no more than they pay now, and 98% will pay no more than £50. There are effectively two classes of vehicle for which there may be small problems. First, there are the conventional HGVs—either articulated or rigid vehicles without a trailer. For them—a relatively small number of vehicles, perhaps 6,000 out of the 260,000 in the UK fleet—the maximum calculated loss is £79. Then there are a small number—about 7,000 of them on the road—of rigid vehicles with a trailer. Of those we estimate—the Department has done some analysis—that fewer than 50 will face potentially more than £300 extra in costs. There is, however, a relatively simple remedy for them—re-plating. I am sure that that can be explored further in Committee.
The Bill is not designed as a precursor to increased charges for businesses or road users more widely, as some have speculated. As my right hon. Friend the Secretary of State said earlier, our intention is clear: it is to introduce legislation that will level the playing field in order to help UK hauliers.
I am delighted that the Bill has been received so positively today, because I think that it presents an opportunity to correct an injustice that has persisted for far too long; I am delighted with the support that we have had from Members in all parts of the House; and I am delighted that the Bill is to be given a Second Reading today.
Question put and agreed to.
Bill accordingly read a Second time.
HGV Road User Levy Bill (programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the HGV Road User Levy Bill:
Committal
1. The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 13 December 2012.
3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
4. Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
7. Any other proceedings on the Bill (including any proceedings on Consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Mr McLoughlin.)
Question agreed to.
Civil Aviation Bill (Programme) (No. 3)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Civil Aviation Bill for the purpose of supplementing the Order of 30 January 2012 in the last Session of Parliament (Civil Aviation Bill (Programme)), as varied by the Order of 25 April 2012 in that Session (Civil Aviation Bill (Programme) (No. 2)):
Consideration of Lords Amendments
1. Proceedings on Consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion two hours after their commencement at today’s sitting.
Subsequent stages
2. Any further Message from the Lords may be considered forthwith without any Question being put.
3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Mr Simon Burns.)
Question agreed to.