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Mr. Brady: The hon. Gentleman makes an important point. The case is even stronger, because such taxes hit poor people harder than wealthy people. People who drive elderly cars do not have the fuel efficiency that the Economic Secretary enjoys and will suffer more.
Mr. Swinney: That is a fair point. Poor people who live in isolated parts of my rural constituency will not make 50 or 60-mile round trips to cities to buy supermarket priced petrol, from which people who can afford to do weekly or monthly shops benefit.
Mr. Swayne: Does the hon. Gentleman believe that it is the Government's plan to tax the poor more heavily as a means of encouraging them to become richer?
7 pm
Mr. Swinney: The hon. Gentleman is more able to penetrate the deepest thinking of the Government and their bizarre notions than me. The escalator is certainly a tax on the poor, as Labour candidate for the Scottish Parliament seat of Galloway and Upper Nithsdale said very effectively in that newspaper article. I am sure that it has not escaped the notice of my hon. Friend the Member for Galloway and Upper Nithsdale whom I am delighted to see here from the campaign trail.
Just after the Budget, a rather indiscreet remark was made by Lord Sewel, the Minister with responsibility for agriculture and fisheries in Scotland. It was a fascinating example of the rebuttal machine of the Labour Government coming into play quickly. He said in a casual moment that in applying the fuel duty escalator the Government had underestimated the ferocity of the reaction and misjudged the public mood. I can trace only one newspaper in which that comment managed to reach the surface, after it was expunged from any possible recollection by anyone else. His comment gave the game away.
I intervened in the Chief Secretary's speech to ask him to clarify the status of an article that appeared in The Daily Telegraph on Saturday, which suggested that the Government had been chastened by the reaction to the fuel duty escalator and were in the process of giving a commitment that it would not be applied in the future. The Chief Secretary referred me to the Red Book, which confirms that it will be applied for the remainder of this Parliament. Obviously, this is a matter of enormous significance. We need clarity about the Government's intentions. It is bad enough having to face the effects of the escalator in this Budget. If we can, as a result of the enormous pressure applied by various sectors, manage to constrain the Government's use of it in the future, that would at least be of some benefit to those who are hard pressed.
The article in The Daily Telegraph cited ministerial sources as the origin of the story about the Government's U-turn. I find it fascinating that it commented on the ferocity of the campaign against the escalator that has
been waged in Scotland, to which the hon. Member for North Wiltshire (Mr. Gray) referred, and to the activities of my party in raising the issue during the Scottish election campaign. I hope that the Economic Secretary will be able to clarify the Government's position and announce tonight that the Government will step back from that punitive taxation on the poor and rural communities of Scotland and other parts of the United Kingdom.
Mrs. Margaret Ewing (Moray):
Has my hon. Friend noticed that there is not a single Labour Member representing a Scottish constituency present on the Government Benches?
Mr. Swinney:
I am grateful to my hon. Friend for pointing out that piece of information.
Mr. Swinney:
It is shocking, but not exactly surprising. I shall be interested to look at the voting record for the Division at 10 o'clock this evening, or whenever it is, to see into which Lobby Labour Members who represent rural constituencies such as mine trooped. It will be fascinating to see what all the huff and puff about rural transport amounts to when it comes to their putting their vote where their mouth is.
The road fuel duty escalator is doing enormous damage to the Scottish economy and the rural economy. It is shortsighted and uncompetitive and the Government should listen carefully to the strong representations that have been made not only by Opposition Members but convincingly by Labour Members.
Mr. Hayes:
The--[Hon. Members: "Hear, hear."]. I am delighted to receive that badge of recognition and warm support from my colleagues.
The haulage industry, like much of the countryside, believes that it is under attack from the Government. There is no question about that. We can debate at length whether it is really under attack from the Government, but it certainly believes that it is under attack. The industry also believes that it is under attack from the Minister. It rings a bit hollow with hauliers in my constituency when they are told that a forum is being set up after the event. After all this has been done, a forum is being set up to discuss why it has been done. It is not a forum for discussion or a consultative group to plan the best way of dealing with the issue before the tax is increased. It a forum to try to pacify the industry after the tax is increased. That is what it amounts to. We welcome the forum because it is better than nothing, but how much better it would have been if the Government had shown an honest commitment to the countryside and the haulage industry by setting up a forum before the measure was introduced.
Mr. Deputy Speaker--I am sorry, Mr. Butterfill, I was promoting you for a moment. The anger and bitterness in the industry is well summarised by a letter that I received from a small haulier in my constituency, Healey Transport of Pinchbeck in South Holland. I read the letter with deep concern, as I am sure that the whole House will receive it. Mr. Healey said:
I shall now make some specific points not yet covered. The first is that the extra fuel costs have a disproportionate effect on rural communities. Let me explain that in a little more detail. I do not mean simply the extra costs endured by people living in remote communities because they have to use their car to get to the basic necessities of life--to work, to school, to hospital, and so on. I mean that hauliers are disproportionately based in rural areas. My hauliers have asked me, "What do you expect us to do--to change the places where they grow potatoes, vegetables and cut flowers?" Those places are static, so the hauliers have to be based there. Typically, those places are a long way from where products are retailed. Of course, haulage companies are based in rural areas, because rural areas produce the goods that haulage companies carry. There is no alternative for them.
The hon. Member for Halton (Mr. Twigg) spoke about the desirability of moving freight on to the Mersey or on to rail. That is impossible in large parts of the country because we do not have access there to alternative means of haulage. He really ought to know that. It is insulting for him to say that companies ought to move to rail, when most places have not had suitable railway lines for 35 or 40 years.
Mr. Derek Twigg:
Will the hon. Gentleman give way?
Mr. Hayes:
I will give way, but, if the hon. Gentleman is going to come out with drivel about the previous Government cutting the railways, when most railway lines disappeared in the 1950s and 1960s, he had better think first.
Mr. Twigg:
Is the hon. Gentleman saying that there are no opportunities to get freight on to rail?
Mr. Hayes:
There are some opportunities, but in significant areas they are limited. It is simply not a
"These outrageous taxes are severely damaging businesses like mine in your constituency."
27 Apr 1999 : Column 202
I did not take that at face value. Being a diligent Member of the House, I wanted to examine that claim in greater detail, so I telephoned Mr. Healey to ask him some questions and to justify his assertion. He told me that his £800,000 turnover business was suffering an increase of £25,000 per annum as a result of the escalator. That is £25,000 in additional overheads for a small business. Those of us who have been in business appreciate just how significant that is in annual terms for such a business. It will undoubtedly push some businesses such as Mr. Healey's to the brink of disaster. It will certainly mean that they cannot expand.
We heard, however, from the Chief Secretary that haulage businesses needed to reinvest to improve their fleet and make their vehicles more fuel-efficient and environmentally friendly. Do the Government not realise that the only way in which companies will be able to do that is by using their profits to reinvest in their assets? That will not happen if the Government take money away from them in additional tax. That money might have been used to improve the fleet, make it more fuel-efficient and bring it up to the level of the best in the industry about which the Chief Secretary spoke; but that will not happen now, because Mr. Healey simply will not have the money to do that. Hauliers throughout my constituency, including Fowler Welch, which I mentioned in last week's debate, Spalding Haulage and many others, are being pushed to a similar position of jeopardy.
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