HGV Road User Levy Bill (Ways and Means) Debate
Full Debate: Read Full DebateStephen Hammond
Main Page: Stephen Hammond (Conservative - Wimbledon)Department Debates - View all Stephen Hammond's debates with the Department for Transport
(12 years, 1 month ago)
Commons ChamberI 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.”
indicated assent.
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.
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.
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?
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.
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?
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.
I will, although I was going to address the hon. Gentleman’s remarks in a moment.
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?
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.
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.
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?
Yet again, the hon. Gentleman tempts me down a line that is grounded in speculation rather than anything else.
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.
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?
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.
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?
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.
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?
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.
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?
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.
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?
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.
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.
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?
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—
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?
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.
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?
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.
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.
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).