Oral Answers to Questions

Debate between Jim Fitzpatrick and Stephen Hammond

Thursday 10th July 2014 Commons Chamber

[Stephen Hammond]

My hon. Friend is right in what he says. He will have seen that consultation and the fact that we have invited initiatives from operators and franchise bidders in that regard. The possibility of extra services is being opened up by this Government’s commitment to electrification; by 2019 we will have put in place more than 870 miles of electrification whereas Labour managed less than 8 miles.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Will the Minister with responsibility for shipping support the Mission to Seafarers, the Apostleship of the Sea and Seafarers UK and the excellent work those important charities do? Will he look at what support the Department gives and whether it can be increased for those very important charities?

[Stephen Hammond]

The hon. Gentleman is right. I support those charities, and I am delighted to have attended a number of their events with him. I will look at that and see whether there is any more that the Department can do.

Oral Answers to Questions

Debate between Jim Fitzpatrick and Stephen Hammond

Thursday 27th June 2013 Commons Chamber

[Stephen Hammond]

My hon. Friend will be pleased to hear that we are having cross-departmental discussions on the matter. No decision has been taken yet, but I hope we will come to a conclusion in the near future.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

When the Government announced trials of 80 mph limits on our motorways, there was dismay at the prospect of higher emissions, higher costs for drivers and collisions at higher speeds. The Minister announced in a recent speech that the trials were still on track, whereas the Secretary of State suggested in a press interview last Sunday that they were off the table. If there is one thing we need in road safety, it is clarity. Will the Minister tell us whether the Government are still pressing ahead with such a dangerous policy?

[Stephen Hammond]

The Government made an initial assessment of the possibility of introducing trials of 80 mph limits, but it is not a priority. What is a priority for this Government is the transformational investment that is delivering growth and road safety. Yesterday’s announcement by the Chancellor will give us the means to deliver that transformational change.

Oral Answers to Questions

Debate between Jim Fitzpatrick and Stephen Hammond

Thursday 25th April 2013 Commons Chamber

[Stephen Hammond]

I am not sure where the confused briefing came from, but I assume that it must be the Welsh Government, because funding for the M4 around Newport is, as the hon. Lady knows, a matter for them.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

One of the lead stories on the BBC’s “Breakfast” this morning was about potholes. The National Audit Office calculates that it would be cheaper to repair our roads than to deal with the damage and injuries caused by potholes. Regardless of whether they are the result of the weather or the cuts, has the Minister had discussions with Treasury colleagues on trying to get additional funding to use those infrastructure projects to get the UK economy moving?

[Stephen Hammond]

I announced earlier the huge amount of money the Government are committing to highways maintenance. We have continual discussions with the Treasury on the money needed for that, and I am delighted that this Government’s settlement for highways maintenance has been better than that achieved by the previous Government. We remain committed to ensuring that potholes are repaired, and I remind local authorities of their obligations.

HGV Road User Levy Bill

Debate between Jim Fitzpatrick and Stephen Hammond

Tuesday 29th January 2013 Commons Chamber

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

I thank the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) for tabling his amendment. I hope that I will be able to persuade him that it does not deal with the concerns raised by the BVRLA, which I should like also to address. I want to try to prove to him that his amendment would potentially, if we were not careful, give a free £200 to an awful lot of people. I hope he will agree with me on that. We discussed the point about clause 7 in Committee when the hon. Member for Linlithgow and East Falkirk (Michael Connarty) raised the issue of 10 monthly and 12 monthly payments.

Removing clause 7(3) would remove the annual rebating formula and mean that all the rebates would be made under subsection (4), which applies to all periods of time over one month and less than one year. Under the European directive, the charges and rebating formula must be the same for both UK and foreign-registered vehicles.

In selecting the charges for different time periods, we have chosen to offer the annual levy at a discount compared with the purchase of 12 monthly levy payments. That is also compatible with the Eurovignette directive, which states that the annual charge may be no less than 10 times the monthly charge.

The hon. Gentleman’s amendment would not have its intended effect, which I believe is to ensure that UK hauliers would be able to claim the rebates in twelfths rather than tenths, as proposed by the Bill. As he has rightly pointed out, I am aware of what the BVRLA has put together. It has been lobbying for a change to the calculation because at the moment it estimates that a UK operator could incur a small loss when it delicenses a vehicle—typically when it is sold—compared with the existing rebating regime for vehicle excise duty, which rebates in twelfths. The BVRLA has identified that a small extra cost to operators could be introduced by the way in which the levy is rebated compared with how VED is rebated.

Currently, when a vehicle is delicensed—typically when it is sold—the previous owner can claim back the outstanding whole months of VED, with the rebate calculation done in twelfths. From the introduction of the levy in 2014, UK operators will only be able to reclaim VED on the same basis that the levy can be reclaimed, namely in tenths. Setting the annual rate at 10 times the monthly rate complies with EU law and will maximise the revenue from the monthly charges. That means, in effect, that it is discounted when compared with the cost of the 12 monthly levy charges.

The decision to offer rebates in tenths was made, as I explained in Committee and as the hon. Gentleman has mentioned, to prevent foreign hauliers from paying for a year, using a vehicle for a month and then reclaiming 11 months. The hon. Gentleman’s amendment would have the effect—although this is not its intent—of removing that.

[Jim Fitzpatrick]

I accept the explanation about tenths and twelfths and that we do not want to give an advantage to foreign hauliers, but the question that was raised in Committee by my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) has still clearly not been answered to the satisfaction of the BVRLA. When someone surrenders VED—a tax disc—they can claim back, but if a vehicle is off the road while it is in the process of being sold, which could take two or three months, and is accruing the levy charge, can that be claimed back? If it can, I think that will answer the problem.

[Stephen Hammond]

I hope that I am about to address exactly that point. I welcome the hon. Member for Linlithgow and East Falkirk to his place, because he raised the point about the levy rebate, which I hope my opening remarks have addressed.

The BVLRA estimates that rebating the charge in tenths rather than twelfths might cost its members, as the hon. Member for Poplar and Limehouse has said, up to £2.7 million a year. That estimate is on the high side, to say the least, because the BVRLA assumes that half the refunds would be for vehicles in the most expensive levy band, whereas, in fact, only 4% of the UK fleet is in that band. Most UK vehicles—83%—are in bands costing between 36% and 65% less. I would therefore question whether the cost is as high as estimated.

The BVRLA also assumes that all refunds are claimed in the 10th month of the VED cycle for each vehicle, which is a worst-case scenario. In fact, there is a peak in vehicle disposals at around month three or four of the cycle, reflecting the fact that vehicles are often purchased in September and sold in January, to deal with Christmas business. The loss for any vehicle at this point is some 60% or 70% less than the worst-case figure.

We estimate that most vehicles will lose in the region of between £30 and £50 when delicensed. That is not a regular event, but it would happen, for example, when a vehicle is sold. The loss therefore needs to be set in the context of the vehicle’s whole lifetime, which can be about 10 years. For example, a typical vehicle that lasts 10 years and is sold twice during that period at a typical stage in the VED-levy cycle would incur between £60 and £100 in rebate costs over its life, because the loss is incurred only when the vehicle is sold or delicensed for other reasons. That cost equates to about £6 a year. Operators can avoid that cost by selling the vehicle taxed or by disposing of it only at the end of the VED-levy cycle so that there is no amount to reclaim.

As the hon. Member for Poplar and Limehouse said, the BVRLA gave oral evidence to the Committee and raised this point, but it did not give it the prominence that it has been given subsequently. I am pleased that we have been able to discuss it today because it did not feature in our discussion about levy rebates. I am pleased that I have been able to clear the point up. The BVRLA could have submitted written evidence on this point to the Committee, but it did not. It is helpful that it has been raised by way of amendment this afternoon.

[Stephen Hammond]

As I have said, the figure of £2.7 million is predicated on half the vehicles in the fleet being in the largest band, whereas only 4% are in that band. There will be a very small loss, if there is a loss at all. The £2.7 million figure is clearly an overestimate.

I seek to persuade the hon. Member for Poplar and Limehouse that under the amendment, all rebating would be done under clause 7(4), which is designed for shorter periods of time than one year. Rebating the annual levy under that subsection would not resolve the tenths versus twelfths issue, but it would allow some foreign operators to drive on the UK’s roads for free for up to two months when they purchase an annual levy. That is because, as we discussed in Committee, they would be able to claim a rebate for whole outstanding months at the monthly levy rate, rather than at the discounted rate.

As well as the potential for free use of the roads, a further consequence of using clause 7(4) as the rebating mechanism would be to allow anyone to make a claim for more than they had paid, without ever driving on the UK’s roads. For example, if an operator purchased a levy starting at a future point in time, say 1 February, and immediately asked for a rebate, they would be able to claim 12 times the monthly rate because the levy period would not have started. That would contrast with the actual cost of the 12-month levy, which is discounted to 10 times the monthly rate.

The consequential amendments would mean that clause 7(4) could also be used for annual rebating and would remove the references to clause 7(3) in clause 7(8), which deals with the level of the rebate. Given the unintended consequences of providing updates only through clause 7(4), and given the relatively small value of the typical loss, which is incurred only if the vehicle is delicensed or sold, we do not propose to change the rebating formula from tenths to twelfths.

I will keep the situation under review. I hope that with those reassurances, the hon. Member for Poplar and Limehouse will withdraw the amendment.

[Jim Fitzpatrick]

We are very grateful to the Minister for his response. My hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) raised this matter strongly in Committee. We supported the inquiry by the BVRLA because this seemed to be an issue that was slipping through the cracks. The Minister reassured us in Committee. He has said solidly that he will keep the matter under review. We do not want to see this develop into a disadvantage for British road haulage.

Given the assurances that the Minister has reaffirmed today, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Third Reading

Marine Navigation (No. 2) Bill

Debate between Jim Fitzpatrick and Stephen Hammond

Friday 30th November 2012 Commons Chamber

[Stephen Hammond]

The term “deck officer” does not exist there, but it does exist. I ask the hon. Gentleman to reflect on the point that management level is covered by the usual definition of deck officer, which is

“an officer in charge of the above-deck workings and manoeuvres at sea”.

That implies that the officer must have operational and management level qualifications.

The term “deck officer” is clear and is widely accepted to be in current usage. It excludes members of the crew who are not responsible for navigating the ship. The second criterion will still apply, so a deck officer would still need to have the requisite

“skill, experience and local knowledge”

to qualify for a PEC.

The port marine safety code and the accompanying guide to good practice are co-produced by the ports, the shipping industry, trade unions, maritime experts and the Government. They provide guidance for ports on the management of PECs and already suggest that competent harbour authorities seek a valid certificate of competency as a deck officer from PEC applicants.

I suggest that the Government amendments are a way forward. We have listened carefully to the concerns of the Opposition and other Members about the definition. Our proposals reflect the ambition of the Bill to reflect modern usage. I hope that the hon. Member for Poplar and Limehouse and my hon. Friend the Member for Shipley will be reassured by the Government amendments and will not press their own.

[Jim Fitzpatrick]

I have listened carefully to the Minister’s response on our amendments. As I outlined in my opening remarks, the deletion of clause 2 was a principled defence of the status quo in the absence of an alternative.

The alternative that we suggested was “senior deck officer” because that is what was suggested to us. The Minister stated that “deck officer” is a recognised term in the industry. He also acknowledged that our suggestion of replacing “senior” with “management-level” would be appropriate and that that term is contained in other regulations.

In essence, what we are talking about is safety. As the hon. Member for Shipley (Philip Davies) said, this is not an insignificant element of the proposals, but relates to the fundamental question of safety. We would not want to challenge the Government on their commitment to safety, because we accept the Minister’s assurances. I also know that the hon. Member for South East Cornwall (Sheryll Murray), in whose name the Bill stands, would not want to do anything other than improve safety for mariners. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: Government amendment 12, page 2, line 7, leave out ‘member of the crew’ and insert ‘deck officer’.

Government amendment 13, page 2, line 8, leave out ‘omit “of which he is master or first mate”’ and insert ‘for “master or first mate” substitute “a deck officer”’.

Government amendment 14, page 2, line 10, leave out ‘member of the crew’ and insert ‘deck officer’.

Government amendment 15, page 2, line 12, leave out ‘person’ and insert ‘deck officer’.

Government amendment 16, page 2, line 12, at end insert—

‘( ) In section 31(1) (interpretation) at the appropriate place insert—

“deck officer”, in relation to a ship, includes the master and first mate;”.’.—(Stephen Hammond.)

Clause 5

Harbour directions

HGV Road User Levy Bill (Ways and Means)

Debate between Jim Fitzpatrick and Stephen Hammond

Tuesday 23rd October 2012 Commons Chamber

[Stephen Hammond]

Yet again, the hon. Gentleman tempts me down a line that is grounded in speculation rather than anything else.

[Jim Fitzpatrick]

rose—

[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.

--- Later in debate ---

[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]

indicated assent.

[Jim Fitzpatrick]

I am very grateful to the Minister for that clarification.

[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.