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Mr. Milburn: I cannot admit that, and there is no evidence for it. I shall deal with those matters in a moment.
Mr. Welsh: Although the Minister is right to attack the Conservatives, how can the Government justify the fact that Scotland, which is Europe's largest oil producer, has the highest fuel taxes and the highest fuel costs in Europe? Does the Minister realise that by raising fuel costs, he automatically lowers the living standard of every Scottish family and attacks the competitiveness of every Scottish business?
Mr. Milburn: I thought that the hon. Gentleman was a member of the party that wanted to increase taxes for the people of Scotland.
Mr. Welsh: How can the Minister justify the fact that Scotland is Europe's major oil producer, yet it now has the highest fuel taxes and costs in Europe? That should not be the case. The Scottish National party wants to make our industry more competitive. The Government's policy is attacking the competitiveness of our industry and the living standards of the Scottish people.
Mr. Milburn: That sounds to me like a further increase in income tax if, heaven help us, the Scottish people were landed with an SNP Government in their Parliament.
Mr. Bill Rammell (Harlow): I return to the disingenuousness of the Conservative party. Does my
right hon. Friend recall, when that debate was going on, the former Chancellor of the Exchequer, the right hon. and learned Member for Rushcliffe (Mr. Clarke), saying that signing up to the aims of the Rio summit and then denying the means to achieve them through the fuel escalator comes dangerously close to hypocrisy? Does that not belie the hot air coming from the Conservative party today?
Mr. Milburn: My hon. Friend is right. The right hon. and learned Member for Rushcliffe (Mr. Clarke) posed a real dilemma to the Conservative party and the House. This is not straightforward. There are dilemmas and difficult issues to balance and get right, but it is important that hon. Members on both sides of the House veer away from a hypocritical position. I fear that some hon. Members are in danger of not doing that.
The Conservatives claim that the entire problem is down to the extra 1 per cent. that the Government--
Mr. Deputy Speaker:
Order. I hope that the right hon. Gentleman is not suggesting that any hon. Member would be hypocritical in his or her behaviour.
Mr. Milburn:
Of course not, Mr. Deputy Speaker. I was merely repeating the words of the then Chancellor the Exchequer, who warned about the dangers of sailing close to hypocrisy on some of these matters.
Mr. Deputy Speaker:
Perhaps the right hon. Gentleman may accuse a political party of being hypocritical, but certainly no hon. Member.
Mr. Milburn:
That is absolutely right, Mr. Deputy Speaker.
The Conservatives claim that the entire problem is down to the extra 1 per cent. that the Government have added to the escalator. Talk about torturing the statistics until they confess. The truth is that the price of a litre of diesel has risen by 7p since the general election. Under the previous Government, it rose by 26p.
I remind the right hon. Member for Wells that three duty rises under the Conservatives added 10 per cent., 10 per cent. and 13 per cent. to the price of diesel. The party that introduced the escalator and is responsible for its having the greatest impact on fuel prices now opposes it. There is only one way of describing that: it is naked opportunism.
However, that is not all. The Tory party wants to have its cake and eat it. It professes to support a cleaner environment. As I understand it, the environment is one of the issues that today's Conservative party is most keen to discuss around its kitchen table. Indeed, to be fair to the Opposition, they supported the Government when we made our legally binding commitments at Kyoto, and I am grateful to them for that. Now their abandonment of the escalator leaves them professing support for our environmental objectives, but opposing the policies necessary to bring them about. Presumably, they believe that improvements in the environment will simply look after themselves.
I remind Conservative Members of what the previous Conservative Chancellor said to the House about the dilemma:
Mrs. Eleanor Laing (Epping Forest):
Will the right hon. Gentleman give way?
Mr. Milburn:
Yes, but this will be the last time.
Mrs. Laing:
Does the right hon. Gentleman realise that he has entirely missed the point of what Conservative Members are saying? He is right, of course, in the statistics that he has just given on the rise in the price of fuel as a result of the escalator, but the point is that the escalator has reached a threshold at which it is no longer working. Since it is no longer working and of benefit to the environment, as it was when first introduced by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), it should now be stopped.
Mr. Milburn:
No, that is not the position. I shall come to the figures in a just moment or two.
The Conservative party's credibility will be damaged still further by the admission of the hon. Lady and, indeed, of the right hon. Member for Wells that its policy is now to abandon the escalator. If that is so, the right hon. Gentleman had better start explaining to the British people how the Tories will plug the £1.5 billion annual black hole that that will leave in their annual spending. Which taxes will have to rise to compensate for that loss of revenue? Which services will be cut?
Just last night, we heard the deputy leader of the Conservative party claim that it was the party that now supported public services and wanted to invest in them. Less than 24 hours later, his position has been totally undermined by his Treasury Front-Bench team, which would deny schools and hospitals the investment that they need.
Mr. Milburn:
I will not give way to the hon. Gentleman; I have already done so. He is to make a speech, heaven help us, before too long, and will have plenty of opportunities to make his points then.
The Opposition's credibility is not enhanced either by the ludicrous claim that the hon. Member for North Essex (Mr. Jenkin) and the right hon. Member for Wells are making about the impact of the fuel duty escalator on flagging out. I said that I would come to this point, and I now do so. The right hon. Gentleman makes much of the cost of diesel in the UK compared with the price in Europe. There is no denying that it is higher, although it
is interesting--some would say strange--to hear the Conservative party acting as an apparent advocate for tax harmonisation in Europe.
Mr. Paterson:
We advocate lower taxation.
Mr. Milburn:
That is not the position, as I understand it.
More importantly, the right hon. Member for Wells failed to mention the other costs that haulage companies face as part and parcel of doing business. The cost of fuel is of course important, but so are labour costs, other social costs and the taxes that companies face wherever they operate. Once all those factors are taken into account, it is clear that moving out of the UK would be an expensive business for haulage firms. That is so because the total tax burden on businesses in the UK is lower than that in other major European countries and, indeed, lower than the average in both the Organisation for Economic Co-operation and Development and the European Union.
For example, a typical firm with a fleet of 50 articulated lorries would face higher business costs of nearly £400,000 a year if it relocated from the UK to France, £600,000 if it relocated to Holland, and more than £800,000 if it relocated to Belgium.
Mr. Loughton:
Will the right hon. Gentleman give way?
Mr. Milburn:
I have given way twice to the hon. Gentleman; he should not be greedy.
There are good reasons why Britain is the best and most cost-effective place for haulage companies to locate. With a handful of exceptions, there are no road tolls in the UK. In France, an operator can expect to pay road tolls of about £7,800 for every vehicle every year. On top of that, corporation tax is 50 per cent. higher in France, and labour taxes 100 per cent. higher.
Some overseas companies--
Mr. Loughton:
Will the right hon. Gentleman give way?
Mr. Milburn:
I will not give way to the hon. Gentleman any more.
Some overseas companies have already recognised those facts and have moved into the United Kingdom. Despite the irresponsible claims made by Conservative Members, Britain is the best place for hauliers, but the idea that Britain's roads are about to be overrun by what the hon. Member for North Shropshire last week called dirty foreign trucks would be laughable if it were not so serious: fewer than 1 per cent. of lorry journeys are undertaken by foreign-based companies.
Despite that, the Opposition advocate what they call a Brit disc--which, more properly, the industry calls a Euro vignette--as a means of taxing foreign lorries for operating on British roads and passing the benefits on to domestic hauliers either through reduced fuel prices or reduced vehicle excise duty. That, as I understand it, is the hon. Gentleman's policy.
"Any critic of the Government's tax plans who claims also to support the international agreement to curb carbon dioxide emissions will be sailing dangerously near to hypocrisy."--[Official Report, 30 November 1993; Vol. 233, c. 939.]
This Government believe that the right hon. and learned Gentleman was right--just as his party used to believe that it was right--to use the taxation system to achieve our environmental objectives. All that has changed is the Conservative party's attitude and its opportunism in latching on to an issue that it believes will bring it some desperately needed popularity.
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