Select Committee on Trade and Industry Appendices to the Minutes of Evidence


Letter from the Minister of State, Department of Trade and Industry

  I have pleasure in sending you additional information in response to points raised when Stephen Timms and I gave evidence to the Committee on 14 February.

  In my evidence, I quoted figures for spend on road fuels as a proportion of the value of output in various sectors. These had been produced as part of an exercise to generate the overall estimates quoted in our memorandum. Since detailed figures for individual sectors were now to be published in response to your Committee's request, our analysts have rerun their calculations and reviewed the estimates these entail in the light of the latest information, to ensure they are as reliable as is professionally possible in this kind of work. Although the overall estimates remain as in the memorandum, and most of the detailed figures I quoted are unchanged, the figure for iron and steel has been revised up from around 0.5 to 0.9 per cent. Reflecting the relatively heavy use of rail and water transport by this sector, and still less than the average for manufacturing as a whole, the revision does not materially affect the significance of road fuel charges among the factors leading to the redundancies Corus recently announced, a point the company has confirmed in discussion with my officials. It also has no bearing on the company's figure for differential fuel charges, which Christopher Chope quoted in his questions.

  In addition to the questions detailed by your Clerk, may I convey my colleague Lord Macdonald's views on over capacity in the road haulage sector, about which there was some discussion at your Hearing? Lord Macdonald believes that the road haulage industry's problems spring from a wide range of economic and structural factors. Given their range, there can be no single remedy or quick fix, but the measures the Chancellor announced in the Pre-Budget Report aim to help the industry over a difficult time, and to contribute substantially to developing a commercially viable environmentally sustainable industry. The smaller, more vulnerable haulage operators are subject to growing competitive pressures from larger, better resourced companies whose expertise in logistics is among the best in the world. It should be noted that capacity in the haulage industry is subject to seasonal variation.

Peter Hain

Minister of State, Department of Trade and Industry

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