APPENDIX 16
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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