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Transport Costs

2. Mr. Christopher Gill (Ludlow): What assessment he has made of the effect upon the competitiveness of British industry of (i) United Kingdom transport costs and (ii) those relative to those of continental Europe. [71593]

Madam Speaker: I am going to ask the hon. Gentleman to read out his substantive question so that it will be recorded correctly.

Mr. Gill: Thank you, Madam Speaker. My question was correctly recorded in the Vote a fortnight ago, but it has been altered subsequently. It should read: "What assessment he has made of the effect upon the competitiveness of British industry of United Kingdom transport costs relative to those of continental Europe."

The Minister for Energy and Industry (Mr. John Battle): The Government recognise that transport costs can be a significant factor in the competitiveness of some sectors, and comparisons have been made. My right hon. Friend the Deputy Prime Minister set out the Government's strategy for supporting economic growth through an improved and more efficient transport system in his White Paper, "A New Deal for Transport", which was published last year, and I am sure that the hon. Gentleman will have read it.

Mr. Gill: The House will have noted that totally inadequate response. It can hardly have escaped the Minister's attention that 2,000 truckers massed outside the House of Commons yesterday to try to draw the Government's attention to their problems--problems that will not be solved by the integrated transport system. The difficulties are occasioned by the fact that truckers pay so much more for fuel and excise duty in the UK than their counterparts pay on the continent. Is the Minister aware that truck drivers can fill their tanks for £200 less per tankful of diesel on the continent than they must pay in the UK? Is he further aware that the continental hauliers against whom the British trucker is competing can employ two east European drivers for the price of one British driver? What is he going to do about that particular problem? The truckers will not be fobbed off by the pathetic answer the Minister has given.

Mr. Battle: The hon. Gentleman, and the industry as a whole, might look to issues wider than the direct costs--indeed I know that the industry does so--because the

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overall tax burden on the haulage industry is less than the European Union average. The industry here pays lower corporation taxes, lower employment taxes and lower social costs than it would in any other European country.

I know about the demonstration that took place outside the House yesterday, and I note that the director general of the Road Haulage Association Ltd is none other than Mr. Norris, the former MP for Epping Forest. I seem to recall that, as Minister for Transport in London, he contributed to the disintegration of transport policy--remember his lines about those dreadful people who travel on public transport? Our Labour Government are introducing policies to integrate public road, rail, and vehicle transport in this country. It was the Opposition, when they were in government, who undermined the competitiveness of British industry; we are setting it on the right road.

Mr. Barry Sheerman (Huddersfield): My hon. Friend will hear a lot of special pleading as we run up to the Budget, but will he bear in mind the fact that we have an effective haulage industry in this country? The industry is competitive and very good logistically, and I hope that he will not take too much notice either of the question put by the hon. Member for Ludlow (Mr. Gill) or of the demonstration yesterday.

Mr. Battle: I appreciate my hon. Friend's remarks and should like to point out that we have a good working relationship with the haulage industry. The industry endorsed our intentions to improve enforcement throughout the industry, through improvements in the efficiency of enforcement agencies and by considering the introduction of modern information technology systems to allow better co-ordination. The industry has been constructive in helping us to formulate proposals for hauliers in a competitive regime that will be fair and honest and will lead to reduced congestion, improved delivery times, efficiencies and profitability. That is the whole point of an integrated transport policy. The haulage industry realises that; it is only the Conservatives who have not yet caught on.

Mr. David Heath (Somerton and Frome): Is the Minister as alarmed as I am to hear Conservative Members calling for tax harmonisation? Does he recognise that many small haulage operators are facing a difficult period, with competition from continental European operators who are coming into Britain and taking British haulage jobs? Will he consider whether, without abandoning the quite proper environmental basis for Government policy, he can reach agreements with other European countries on fuel tax convergence, to ensure that we have a fair playing field for this important industry?

Mr. Battle: The hon. Gentleman puts the point well, but I cannot speak for the contradictions that emerge from the Conservatives. I agree that it is important that the rules of the European Union be applied equitably and fairly throughout the whole of the EU and are applied to all on a level playing field. We shall do our best to ensure that that happens.

I would add that it is right that there should be a balance between the amount paid by the industry in dues and environmental responsibilities. We cannot unlink those

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responsibilities; the industry realises that taking its environmental responsibilities and its social obligations seriously is an important part of building and maintaining a competitive edge nowadays. I cannot understand why Conservative Members hanker after a single instrument all the time; they seem to be so locked in the past that they have not caught up with the agenda.

Mr. Denis MacShane (Rotherham): Is the Minister aware that trucking companies on the continent admire the flexibility of their counterparts in the United Kingdom? They admire the fact that, because of the national health service, United Kingdom companies do not have to pay extra social costs and they would welcome the corporation and other taxes that apply in this country. The hon. Member for Somerton and Frome (Mr. Heath)--if I may go off message briefly--is quite right: we need harmonisation of these duties in Europe. If the Conservative party is now officially the party of harmonisation, I, for one, welcome it.

Mr. Battle: Until 9 March, there is a kind of ministerial purdah preventing comment on tax and changes in duties. I must admit--in all honesty and in the privacy of this quiet room--that I do not know what is in the Budget. Changes in fuel duty will obviously be a matter for the Chancellor, but I am sure that he will take notice of all representations made to him--including those from hon. Members.

Mr. Jeffrey Donaldson (Lagan Valley): In developing an integrated transport strategy for the United Kingdom, the Minister will be aware of the tremendous burden of the transport costs that apply to businesses in peripheral regions, such as Northern Ireland. Will the Minister clarify what consideration has been given to peripheral regions of the United Kingdom in developing an integrated transport strategy?

Mr. Battle: The hon. Gentleman raises an important point. If he reads "A New Deal for Transport", which was published by my right hon. Friend the Deputy Prime Minister, he will find that rural areas and the regions--Northern Ireland, Wales and Scotland--feature in that report.

It is important to ensure that "integrated" means the whole of these islands. We must have systems that work, not just for road but for rail. There will be an announcement today about our attempts to sort out the mess in the rail industry that we inherited from the Conservatives. We must ensure that road, rail, public and private transport and the haulage industry are integrated properly. That means having a decent system: ensuring that roads are maintained properly and so on and that the regions and outlying and rural areas are not discounted from the equation. It is not just an urban integrated transport strategy, but a strategy for the whole of Britain.

Physical Sciences

3. Mr. Ian Stewart (Eccles): What plans he has to increase the budget for research in the physical sciences. [71594]

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The Minister for Energy and Industry (Mr. John Battle): The allocations of the science budget to the separate research councils following the comprehensive spending review provision of an additional £700 million over the next three years were announced on 27 October 1998. That increase compares with the last settlement of the previous Administration, which resulted in a real-terms reduction in spend. Spend on the physical sciences for the years beyond 2001-02, like all other areas of science, will be reviewed in due course.

Mr. Stewart: Technical and engineering-oriented universities such as Salford will welcome this settlement--particularly as the physical sciences and engineering have done better from the comprehensive spending review than from 18 years of Tory rule. It was difficult for universities to train graduates and post-graduates because of the state of disrepair that the Conservatives permitted during their period in Government.

Will the Minister join me in calling on all fields of science to work in partnership to make the most of cross-disciplinary projects and the joint infrastructure fund in order to advance knowledge in the United Kingdom? That fund--comprising £300 million from the Government and £300 million from the Wellcome Trust--is much appreciated. I hope that the Minister will ensure also that there is proper balance in the distribution of that fund throughout Britain.

Mr. Battle: I agree with my hon. Friend's approach: yes, it is important that we adopt new cross-disciplinary strategies. However, it is important to stress that the Engineering and Physical Sciences Research Council budget will increase over the next three years by £86 million, from the already high figure of £380 million. For example, funding for maths will rise by 17.5 per cent. and funding for chemistry by 7.5 per cent. The £600 million joint infrastructure fund to which my hon. Friend referred may be used by science institutions in all fields to upgrade laboratories and other buildings. Bids are welcome.

My hon. Friend mentioned cross-disciplinary activity. I believe that Salford university, Salford city council, local education, medical, industrial and social bodies and my hon. Friend are all involved in the Gemysis project. That is an example of how new technology can blend the traditional science disciplines with the wider world. If others follow Salford's example, we shall move forward much faster.

Mr. David Chidgey (Eastleigh): That is all very encouraging, but I am sure that the Minister is aware that this country devotes a lower proportion of investment to research into civil aviation than do any of our European Union competitors. Will he take the good news further and confirm that his Department will not cut, and indeed will maintain, the budget for the civil aviation research and development scheme?

Mr. Battle: We are considering CARAD's budget in detail and sympathetically. CARAD is being supported. Since we came to power we have substantially helped the aerospace industry with launch aid to British Aerospace

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and Rolls-Royce. That was significant investment in research and development projects, so the aviation sector cannot claim that we are not backing it fully.

Mr. Ian Pearson (Dudley, South): While I welcome the boost in research funding, is my hon. Friend aware that less than 1 per cent. of research council funding is devoted to the "D" part of R and D, or that only a paltry 2.5 per cent. of overall Government R and D funding is devoted to industrial development? In all friendliness, I tell him that that Tory legacy is simply not acceptable and is damaging our long-term competitiveness. What will he do about it?

Mr. Battle: I would not like my hon. Friend to think that the science budget was all. The increase of £1.4 billion was intended to underpin the science base, but the comprehensive spending review has enabled the Department to increase by 20 per cent., to £220 million, the innovation budget, the aim of which is precisely to help to move ideas out of laboratories and into workshops. That will help a range of schemes to enable ideas to be turned into practical, productive, economic work.

Mr. Christopher Chope (Christchurch): Is not the key issue the fact that the Minister for Science, Lord Sainsbury, is seen to be biased towards the biosciences rather than the physical sciences? Yesterday's decision by the public health committee of the Labour-controlled Local Government Association to recommend that 26,000 schools ban GM foods reveals that it is unwilling to trust the science Minister, whether he is involved in a blind trust or any other sort of trust. That also demonstrates how important it is to have a science Minister who can serve on Cabinet sub-committees dealing with these subjects.

Unlike Lord Sainsbury, the Minister for Energy and Industry is not tainted by conflicts of interest and is directly accountable to this elected House. Why does he not ask for his old job back? If he asks to be science Minister again, we will support him.

Mr. Battle: This Government's top priority has always been and will continue to be to ensure that GM crops and food do not threaten environmental health or public safety. We shall proceed with care and caution on the basis of the best available scientific advice. Scaremongering and spreading rumours, as the Conservative party has done in recent weeks, is most unhelpful. The attempts of Opposition Members to impugn the integrity of my noble Friend Lord Sainsbury demonstrate that when a team is losing badly its last line of defence is to go for the man, not the ball--and that is exactly what Opposition Members are doing.

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