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Mr. Swayne: Is my hon. Friend not being somewhat optimistic by expressing the pious hope that something positive will emanate from the consultative group? The Chief Secretary set the tone in his speech when he told us that there was overcapacity in the industry and that most of the problems were caused by fuel inefficiency in that industry.
Mr. Paterson: I am grateful to my hon. Friend for that intervention. Thanks to the campaign fought by this party--with the full co-operation of the trucking industry--we have at last got a forum and the Government are finally beginning to listen.
My next example is even worse. The dairy built by Mullers is the huge success story in my constituency. The 120 million litres of milk transported to that dairy every year are carried by diesel-fuelled trucks and every one of the 750 million pots of yoghurt is carried by a diesel-fuelled truck. There was an opening at the dairy on Monday--conducted with great grace by Joanna Lumley--and I took the opportunity to talk to Mr. Mattmer, the Bavarian head of the company's logistics division.
I received details of the company's operations. It runs 50 trucks in the United Kingdom and 230 trucks in Germany. Before it built the plant, it ran weekly truckloads from Germany. Running a truck for 100,000 miles a year at an average of eight miles a gallon, the company estimates that there is a difference between the two countries of £18,056.35 on fuel, road tax and insurance. That is a huge sum, and the company told me quite clearly that, unless the regime is changed, trucks in Market Drayton will soon bear German number plates because the German Government have adopted a more sensible attitude to vehicle excise duty. The company is also considering moving to Luxembourg.
Mr. Roy Beggs (East Antrim):
It is only a matter of time before the same thing happens in Northern Ireland. At present, drivers can save £230 on a 250 gallon tank, and no fuel duty revenue goes to the United Kingdom Exchequer. There is already a £4,000 differential on vehicle excise duty. Is it the Government's policy to destroy the road freight industry in Northern Ireland? Is that how they will assist the achievement of a united Ireland? Urgent action must be taken. Is it not a coincidence that tonight's edition of the Belfast Telegraph carries the report that 30 vehicles have been seized in the past week by Customs and Excise, despite the fact that, two years ago, I asked for additional customs officers to be made available? Does the hon. Gentleman agree that the Government must show that they intend to protect our road freight industry?
Mr. Paterson:
I am most grateful to the hon. Gentleman for that powerful intervention. Unfortunately, I do not have the figures before me, but my right hon. Friend the Member
Mr. Eric Martlew (Carlisle):
I have listened carefully to the hon. Gentleman. Smuggling is an illegal activity, so how does he expect the Government to know how much revenue has been lost?
Mr. Paterson:
If trucks from Northern Ireland refuel south of the border, revenue is lost to the Government.
Mention has been made of the beneficial corporation tax rate. It is interesting to note that, although the Labour party in opposition fought every reduction in corporation tax, it is now hanging much on it in terms of the road haulage industry. I urge Labour Members to listen to the following fairly simple figures--they do not need to concentrate quite as hard as the Deputy Prime Minister might. For a typical company with 10 trucks turning over £1 million a year, with each truck doing 100,000 miles at £1 a mile, the fuel element is about 35p a mile. Following the tremendous hike in the Budget, the VED on the 10 40-tonne trucks will be £57,500, with a total of £407,500 on fuel--
Mr. Hayes:
My hon. Friend makes a powerful case. Does he agree that fuel excise duties disproportionately affect rural communities and rural companies? Only this afternoon, I spoke to a haulier, Jim Welch of Fowler Welch, and he agreed that fuel duty is particularly damaging because of local links with the agriculture and food industries. Rural Britain is disproportionately affected by the Government's swingeing increases--which is typical of a Government who have done so much to damage the countryside.
Mr. Paterson:
My hon. Friend is absolutely right; he understands rural affairs very well. The increases have a crippling effect on constituencies such as ours, where 97 per cent. of freight is carried by road.
Mr. Peter Snape (West Bromwich, East):
Following the hon. Member for North Shropshire (Mr. Paterson) is like following a heavy goods vehicle uphill--he has a billowing exhaust and he does not make much progress. I know that he has made this issue his own as far as the regional press in the west midlands is concerned.
Like most Conservative Members in supposedly safe Tory seats, the hon. Gentleman scraped home at the last election. I wonder what he said to his pals in the road haulage industry about those four Budgets from 1993 to 1997 when the fuel tax escalator was increased by a proportionately far higher amount than the increase under this Government. I remind him that inflation was running out of control at certain times during the previous Conservative Government's period in office. As the Liberal Democrat spokesman, the hon. Member for Lewes (Mr. Baker), reminded us, a minimum increase of 5 per cent. above inflation in those days was much more damaging to the road haulage industry than anything that this Government have done.
I concede that, with his selective use of statistics, the hon. Member for North Shropshire has captured many headlines in the regional press. It is a great pity that some of the people who read those headlines were not here to hear him stuttering through the report which he read rather badly and extremely selectively.
The motion refers to 53,000 redundancies in the road haulage industry. Nobody, not even Conservative Front Benchers, believes those figures. I have heard an attempted justification of them by the hon. Member for North Essex (Mr. Jenkin), who will wind up the debate for the Conservatives. I remind him and the Conservative party that, when I began to work on the railway, over 40 years ago, about 150,000 people were employed in that industry, many of them in the freight moving business. There are not nearly as many of them now, and not many tears, crocodile or otherwise, were shed by the Conservative party when those jobs were lost, partly because of the incompetence of railway management.
I have to say that, when looking back to when the railway industry was in the public sector, I do not recognise the golden age, particularly in freight, that some of my hon. Friends talk about. Much rail freight was lost by incompetence by railway management in the past two decades, but much more of it was lost because of the fiscal unfairness and financial imbalance between the road haulage industry and the rail freight business.
Mr. Snape:
I shall not give way to the hon. Gentleman. He ambled in at the last minute and he has already intervened twice. I do not have the time, let alone the inclination, to take his intervention.
Mr. Hayes:
I was just trying to bring the hon. Gentleman back to reality.
Mr. Snape:
I am grateful, but, if I came back to reality accompanied by the hon. Gentleman, I would not be here--that is a dead cert.
Mr. Simon Burns (West Chelmsford):
Should the hon. Member for West Bromwich, East (Mr. Snape) not declare an interest?
Mr. Deputy Speaker (Mr. Michael Lord):
Order. Hon. Members must not conduct conversations across the Chamber from a sedentary position.
Mr. Snape:
If the hon. Member for West Chelmsford (Mr. Burns) reads the rules, he will realise that I have no
I return to my central point. The imbalance in taxation has brought about the present situation in the road haulage industry. I do not underestimate the problems caused to smaller owner-driver companies by the fuel tax escalator, but members of the Road Haulage Association will bethe first to say privately that there is considerable overcapacity in the industry. Whatever many of them say about the price of diesel, they seem to find enough money to drive around and around our major towns and cities to make their protest, and they will say that, at that end of the market, people will cut each other's throat for a back load.
There is no doubt that there is considerable wastage in the road haulage industry: one has only to drive up and down our roads and motorways to see how many empty heavy goods vehicles there are. Unless we get taxation right, putting more freight on the railway system is likely to continue to be an uphill battle, despite the best efforts of English, Welsh and Scottish Railways.
The hon. Member for North Essex, who is winding up the debate, said earlier that the crippling tax system was having a distorting effect on the road haulage industry. I repeat a remark that I made when I intervened on the hon. Member for Lewes: every survey has shown that, at the heavier end of the heavy lorry market, companies do not pay their full track costs. The size of their lorries and the length of their journeys mean that they are the very people who are in direct competition with the rail freight industry, which for many years has been forced to pay its full track costs and, under the previous Conservative Government, achieve an 8 per cent. return as well. Where is the fairness and sense in that?
No Labour Member would claim that the railway industry could carry all, or even a major proportion of, the freight that is on our roads at present, but it could certainly carry a lot more if we did not have a fiscal imbalance.
I hope that my right hon. Friend the Minister of Transport, who will wind up the debate, will make it clear to the road haulage industry that we cannot tolerate the behaviour that it has demonstrated. That behaviour has been supported by Conservative Members. A former leader of the Tory party and Prime Minister would, whenever there was an industrial dispute, point at the Labour Benches and invite Labour Members utterly to condemn that dispute. We have had pretty mealy-mouthed condemnation of the present situation by the Conservative party, which is not the party of law and order because the Conservatives destroyed both when they were in power. Law and order do not mean much to them when their friends are misbehaving.
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