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Mr. Geraint Davies: Will the hon. Gentleman give way?

Mr. Gray: I shall happily do so in a moment.

There is talk of a workplace charge of up to £2,000 a year in London, although it would be less elsewhere.

Mr. Livingstone: Will the hon. Gentleman give way?

Mr. Gray: In a moment.

Who is prepared to pay £10 a day, £50 a week, or £3,500 a year for congestion charging and £2,000 for workplace parking--which is £6,000 of taxed income--for the privilege of bringing their car into London? It is the stockbroker who wants to come in from Surbiton to the City of London. He does not mind the charges. He puts them down to his company and it pays the £5,000 or £10,000 a year. Who cares anyway? He will just say, "That's great, thank you very much." It is a fat cats charter.

What about people on a low wage, old people, young mothers who are dependent on their motor car not only in London but throughout the nation? To those people, £5,000 or £10,000 a year is a lot. If the hon. Gentleman wants to intervene, perhaps he will deal with that point.

Mr. Davies rose--

Mr. Livingstone rose--

Mr. Gray: I shall give way to the hon. Member for Croydon, Central (Mr. Davies) and then to the hon. Member for Brent, East.

Mr. Davies: Will the hon. Gentleman explain why, if he is in favour of using market systems alongside policy, he is not in favour of congestion charges? The nature of a market is to ration consumption on the basis of price. He may be against charges for moral reasons, but he cannot at the same time be in favour of using markets. After all, there are public transport choices.

Mr. Gray: I thought that I was explaining quite well why I believe that congestion charging is not a terribly good thing for ordinary road users. The point that I was

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about to make, if the hon. Gentleman had given me a second, was that the greater the congestion in London, the greater the incentive for people to use public transport.

I could come to the House from Chippenham, in my constituency, by car. Given the travel allowance system in the House, it would be slightly to my financial advantage to come by car, but I would no more consider driving into London from Chippenham than fly. I always park my car at Chippenham station and come by train. That is by far the most convenient way to travel, because it would take me far longer to come into town by car because of London congestion.

Congestion charging operates against the market, because it fiddles with the market. My approach is to use the market, but congestion charging interferes with it. I am keen to hear what the hon. Member for Brent, East has to say on the subject.

Mr. Livingstone: The hon. Gentleman asked about the two taxes that the Government propose for the use of the mayor. There is an overwhelming consensus in the business community in favour of the congestion charge, and overwhelming opposition to a workplace car-parking tax. My view, and the undertaking that I have given, is that we should proceed with the congestion charge and put the workplace car-parking tax on hold. If we are to make changes like this, we need to carry business and the wider London community with us.

I accept that it is a question of pricing. Going to a film at a cinema in Leicester square will cost £9, whereas seeing the same film at Staples corner will cost £4.50. Why should we assume that driving in the most congested and expensive bit of real estate in Europe should cost the same as driving elsewhere?

Mr. Gray: The hon. Gentleman says that the business community is especially keen on congestion charging. That was exactly my point. Of course the business community is keen; of course the banks in the City--I used to work in one--are delighted. They do not care about paying £10. Indeed, they would pay £100 a day to convey their chairmen to the City of London in a quarter of an hour.

What I want to know is this. What consultations has the Labour party had with groups of disabled people? What consultations has it had with the unions in regard to low wage earners? What consultations has it had with old people--people who need their motor cars, and who will be taxed off the road if the charges are to work? If the Government say that that is not their intention, and that such people will not be taxed off the road, I put it to them that there is no chance that their congestion charge will work. It is certain that the fat cats will not be taxed off the road. If the Government find a way of allowing housewives, young mothers, disabled people or members of the other categories that I have mentioned to stay on the road, the amount of congestion will not be reduced, and all that we shall have is a revenue raiser for the mayor.

As is clear from the Greater London Authority Act 1999, the tax is for only 10 years, at least here in London. That speaks for itself. The Government are a great one for talking about hypothecation, and how important it is for taxes such as this to go towards improving public transport: they love talking about that. But hypothecation works only if several

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conditions are met. First, a congestion charge must be permanent, and every penny earned through it must go towards improving public transport. However, as the Act makes clear, after 10 years, the money will go to the mayor for him to spend as he wishes.

Secondly, the charge must be additional. It must not let the Government off the hook, and allow them not to do things that should properly be financed by taxation; it must be confined to public transport projects that the Government would not otherwise initiate. That principle of additionality, which is terribly important, has already been breached in the context of the national lottery. The Government's introduction of the new opportunities fund breaches it fundamentally. Hypothecation must be both permanent and additional, but the Government's proposals adhere to neither of those principles.

The Government are determined to drive the proud motorist off the road. That may work in the case of certain categories, such as friends of new Labour in their Jaguars, but it will not work for my constituents. It is all very easy for the Government to talk about public transport, to say how important it is to approve of it, and to say that they will use motoring taxes for that purpose. That, of course, is fine for those who have the great good fortune to live in towns or cities, but most people in Britain, who live in the country or in market towns--there is an increasing move from cities into market towns--cannot imagine a form of public transport that could replace the motor car.

Let us consider Mr. and Mrs. Average in Cepen Park south or Monkton Park in Chippenham, in my constituency. Mr. Average drives to work in his car: he has to, because he works in Swindon, which is 10 or 15 miles away. There is no other method of getting to Swindon, because the station is some distance from where they live. Mrs. Average takes her children to school, goes to Safeway, travels to her job as a primary school teacher in the town, picks up her son on the way back and takes him to football, takes her daughter to ballet, comes home in the evening and then goes out herself. That could not be done without a motor car. No other form of transport could possibly meet Mr. and Mrs. Average's daily transport needs.

The Government blithely say that they will raise petrol prices to a level higher than anywhere else in Europe--that they will drive them through the roof.

Mr. Geraint Davies: Will the hon. Gentleman give way?

Mr. Gray: I may do so in a moment, but I am being rather generous in taking interventions.

The Government say that they will drive petrol prices through the roof, and bung on parking charges and workplace taxes. They say that they will use those charges to pay for public transport. That is fine and hunky-dory for those who happen to live in London.

Mr. Davies: Will the hon. Gentleman confirm that he would cut the price of petrol consumption by cutting tax, and would not introduce congestion charges? Would that not cause gridlock in the City of London, and lead to an economic turndown?

Mr. Gray: It is fascinating that the hon. Gentleman should refer to the City of London. It must have been

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lobbying particularly hard on this issue. My concern is not for the City of London, but for London as a whole, and for the town of Chippenham.

Mr. Paterson: May I return to my hon. Friend's point about those who live in rural areas? Where I live, two thirds of people drive to work. A congestion charge, or an excessive petrol duty, is a pure tax that will hit the lowest paid. The money--which in my hon. Friend's case will be levied by an authority in Swindon, and in mine by an authority in Telford--will be spent on public transport, and will be of no benefit to those living in outlying villages.

Mr. Gray: My hon. Friend has made a telling point. As I have said many times, we will certainly vote against the introduction of any congestion charge now or in the future. It would be to the disadvantage of my constituents in North Wiltshire, irrespective of what is felt by the friends of the hon. Member for Croydon, Central in the City of London. I am amazed to hear him speak up for them.

The hon. Gentleman asked whether we would abolish the fuel escalator if we were in power. I was puzzled by what the Chancellor of the Exchequer had to say in his pre-Budget statement in recent weeks. He said that the automatic escalator--the automatic increase in petrol prices above inflation--would not necessarily occur, although he was careful not to say that it would not occur. Table B9, on page 154 of the pre-Budget report, shows an increase in fuel duties from £21.6 billion last year to £22.5 billion this year, and to £23.5 billion next year. That means a 4.6 per cent. increase in the Treasury's next tax take in fuel duties.

If the report is to be believed--given that it was produced by civil servants rather than politicians, I am certain that it is to be believed--it shows that the Government have every intention of increasing petrol duties by more than inflation for at least two years. We will scrutinise the corresponding page in the Red Book next year, to discover whether the Government plan to do the same.

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