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Mr. Blunt: Will the Minister give way?

Mr. Meacher: I am happy to give way, but I am about to tell the hon. Gentleman about the action we have taken.

Mr. Blunt: The Government's amendment to our motion states that the Government recognise


Does the right hon. Gentleman accept that any of those difficulties have been caused by the Government's taxation policies?

Mr. Meacher: I believe that during the time that we have had to face the consequences of those enormous increases in international oil prices the increase caused by Government fuel duties is marginal.

The hon. Gentleman must take account of the fact that for hauliers, it is not just a question of fuel duty. They are concerned about wider taxation. If we compare the situation abroad, we can see that foreign hauliers have to pay toll duties and higher VAT. I remind the House that corporation tax in this country is the lowest of any industrialised country and that helps many hauliers.

Several hon. Members rose--

Mr. Meacher: I will not give way now. I am aware that this is a short debate and that many hon. Members wish to take part. I will give way later, but I want to make some progress.

Mr. Jon Owen Jones rose--

Mr. Meacher: I will give way to my hon. Friend later.

Last November, the Chancellor abolished the fuel duty escalator and, as a result, duty is now 6 per cent. lower, in fact it is 3p less per litre--where did I hear that before?--than it would otherwise have been. [Interruption.] I am delighted that that has pleased Opposition Members. [Interruption.]

Mr. Speaker: Order. I cannot allow the hon. Member for Buckingham (Mr. Bercow) to shout across the Floor. It is not helpful at all.

Mr. Meacher: The Chancellor also announced that, in future, all real-terms increases in fuel duty will be put

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back into investment in transport. That contradicts something wrongly said by the hon. Member for Tunbridge Wells. Substantial assistance for hauliers was delivered at the last budget in the form of large reductions in vehicle excise duty for heavy lorries at a cost of £45 million to the Exchequer. Also, the introduction for 44-tonne lorries was agreed from next February. The VED for five-axle 40-tonners was cut by no less than £1,800 and by £500 for 38 and 36-tonne lorries.

Mr. Malcolm Bruce (Gordon): The Minister is making the very fair point, which was made to me last week by hauliers, that much of the effect has been caused not by fuel tax policy, but by external factors. Nevertheless, does not the Minister accept that, for hauliers, the combined effect of world oil prices, the exchange rate and the tax has created a situation in which not only they, but the customers who depend on them to get their goods to market cannot survive? That is the issue that the Government will have to address.

Mr. Meacher: The hon. Gentleman perfectly fairly makes the point that, as he said, the combination of all those factors at this time has produced a perhaps unique situation. That is exactly why the Chancellor has made it clear that he has been consulting extensively with all the relevant interests and that he is continuing to do so. As the hon. Gentleman knows very well, the Government will be coming forward with a clear statement on the best way forward to take account of all those circumstances.

As I said, for the past month Ministers have been having regular meetings with representatives of the haulage industry, farmers and representatives of the fuel protesters. Discussions on the competitiveness of the road haulage industry--which is precisely the point just made by the hon. Member for Gordon (Mr. Bruce)--are continuing through the road haulage forum. Last week, I attended the conference of the Countryside Alliance, to listen to its concerns about the impact of high fuel prices on people in rural areas, and I made it clear that the issues raised have been taken very seriously.

Mr. John Redwood (Wokingham): Will the Minister now come clean with the House? Surely he agrees that, since this Government came to power, the increase from taxation has been far bigger than the increase from the movement in oil prices. As for the price of diesel--which is affecting the haulage industry, and driving it into bankruptcy--does he remember the 12 per cent. increase in 1999? That is within his 18-month period. Will he not take that into account and just come clean that it is the Chancellor who is robbing the motorist and the haulier?

Mr. Meacher: The right hon. Gentleman has a great deal of experience and knowledge, but I think that he is making a very partisan and unreasonable point--[Interruption.] He knows that perfectly well. Until the early months of last year, oil prices were continuing to decrease to some of the lowest real-terms prices that we have ever experienced in the international oil industry. It was therefore entirely proper and right to continue and

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extend what the previous Government had done in the fuel duty escalator, and that is exactly what we did. However, we did take account of the fact that there are substantial cost effects of doing so, and that some of the hauliers certainly would have suffered as a consequence.

It is for precisely those reasons that we have used other means to ensure that those cost pressures are reduced. The reductions in VED have been extremely large. The Chancellor may well decide to continue them, but that is a matter for him. However, we have been very well aware of the situation, and that it is not only the fuel duty that is a relevant factor.

I also wish to make it clear that the Government have repeatedly stated--I state it again now--that we will be not be press-ganged into making short-term decisions on taxation policy outside the normal Budget cycle. The Government have a duty to govern in the interests of the nation as a whole, and we will.

I am not here--I do not think that Opposition Members expect me to be here--to discuss the Government's future taxation plans. That is a matter for the Chancellor, and he will be making his pre-Budget report shortly. He will, as I said, make decisions in the light of all relevant factors--which include not only the level of tax, but all environmental and other factors.

If anyone doubts that, let me remind the House that he is the Chancellor who, in the last Budget but one, produced the greenest Budget ever; who is committed to a climate change programme, which we shall publish in a few weeks and will set out ambitious CO 2 reductions, including in transport; and who, in almost all his Budgets, has produced a string of fiscal measures designed to encourage cleaner fuel-efficient motoring. I think that the nation can trust him to take a very sensible and balanced decision.

Mr. Jon Owen Jones: I thank my right hon. Friend for giving way. He made an important point about global warming and the Chancellor's efforts in greening our policies. Will my right hon. Friend make the case for the environment, contrary to the arguments from Opposition Members, as in the past decade the carbon dioxide from transport has risen from one fifth to one quarter of the carbon dioxide produced in this country? Opposition Members want to duck that argument, but the previous Government introduced the fuel tax levy because they recognised that something had to be done about global warming, which is even more important than concerns about taxation policy. It is important and that needs stating.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman made a meal of that intervention.

Mr. Meacher: My hon. Friend makes a fair point and I endorse what he said. When he and other hon. Members see the climate change programme which will be published shortly, they will see that we have fully taken on board that point.

It is not just a matter of what the appropriate taxation level should be. In 1997 we inherited from the previous Government a public transport system that was in the

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most rundown state for decades. I say that advisedly. That appalling legacy undoubtedly contributed to the frustration and anger that was manifested last month.

Mr. Geoffrey Clifton-Brown (Cotswold): Will the Minister give way on that point?

Mr. Meacher: Having had experience of the hon. Gentleman in Committee, when he always jumped up and said, "On that point", I shall test him and find out.

Mr. Clifton-Brown: I am grateful to the Minister. On the subject of the Government's record, there have been four increases under the fuel escalator in three years. Until last Sunday the Minister was still advocating that we should use the fuel escalator to increase prices above the rate of inflation. Is he still in favour of it or not?

Mr. Meacher: In answer to an earlier question, I made it clear that my view is that the fuel duty escalator had a very real role and I respect the decision of the previous Government to introduce it. I also think that we were right to continue it. I repeat that where there is a massive and unprecedented increase in the international oil price, the role of the fuel duty escalator simply disappears and the only thing to do is abandon it. I have also said--and it is certainly the Government's position--that we are not abandoning environmental considerations. We shall certainly never do that. Indeed, they are a very strong component of the climate change programme, but we have to look at all the considerations at the right time, year by year, and that is what the Chancellor has said he will do.


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