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Lorry road-user charge

8 pm

Mr. Christopher Chope (Christchurch): I beg to move amendment No. 32, in page 106, line 35, at end insert—

'provided that the charge shall be payable in respect of every lorry using a public road in the United Kingdom irrespective of the country in which such lorry is registered.'.

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The Second Deputy Chairman: I gather that it will be for the convenience of the Committee if we discuss the following amendments together: No. 30, in page 106, line 35, at end insert—

'(2A) The rates at which lorry road–user charge shall be payable shall be determined so that the total of road user charge, vehicle excise duty applicable to lorries and fuel duty raised from lorries shall not exceed the total of vehicle excise duty and fuel duty raised from lorries in the year 2002–03 subject to indexation up to the year of introduction.'.

No. 31, in page 106, line 35, at end insert—

'(2B) Lorry road user charge shall be brought into effect no later than the commencement of the financial year 2006–07.'.

Mr. Chope: I am sure that it will be for the convenience of the Committee to consider the amendments together. They have been drafted to give the Government an opportunity to expand on the rather bland statement that the Chancellor made in his Budget statement. He said:

So say all of us.

The Government rejected our proposals for a Brit disc, but they are now coming forward with their own proposals. However, clause 134 contains no reference to hauliers from overseas, to foreign lorries or to anything like that. [Interruption.] The Financial Secretary says that there is a good reason for that, and we shall have the opportunity to hear the explanation shortly. That is what amendment No. 32 is all about.

We welcome the fact that the Government have accepted the principle of a Brit disc that was outlined in our manifesto at the last general election. We recognise that, under European law, the maximum penalty on foreign hauliers is only about £750, whereas the tax differential between a French lorry and a UK-operated lorry is about £12,000. What the Government have in mind in the clause could do much more to bridge the gap than could be done merely by the introduction of a Euro vignette.

I hope that the Financial Secretary will also be able to address the concerns that prompted amendment No. 30. It is a reflection of the fact that the Chancellor also said in the Budget statement that there would be

Amendment No. 30 would put that proposal into the Bill.

It is not just today's proceedings that have caused Conservative Members to be rather suspicious about the Government's assertions and promises and about the words of some Ministers. We have cause to reflect on what happened with the climate change levy. The Government promised an offsetting reduction in national insurance for employers but, in the Budget, they have more than totally negated that reduction by their proposals for national insurance. Similarly, on the proposals for the aggregates tax, the goalposts were moved during the consultation with the industry.

Given that the discussion on this issue is likely to go on for some years, we want a guaranteed assurance from the Economic Secretary that the haulage industry in this country will not face additional costs. The only sure way of doing that is by putting such guarantees in the Bill.

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Amendment No. 31 deals with the issue of when the proposals will come into effect. I understand that, at the consultation meeting that was held between the haulage industry and Ministers and Treasury officials, there was talk of the measure being introduced no later than spring 2006. However, the Government have tended to fail to deliver on their targets for the completion of such legislation. Because it is vital that our road haulage industry is allowed to compete on level terms with foreign hauliers, the Bill should contain the provision that the measure will be brought in no later than spring 2006. Some would say that that is far too late, but I understand that it would be complicated to introduce.

I hope that the Financial Secretary can explain how he will ensure that there is interoperability between foreign and British hauliers and the system that he has in mind for taxing lorries under the new regime. I also hope he will assure us that the commitment in the pre-Budget statement that there will be no net increase in taxation on truck operators in the UK will hold true. If he can explain how the proposal will be consistent with the Government's agenda for reducing and managing congestion on our roads when only one vehicle in 50 is a lorry, that would be a bonus. However, I fear that he will not want to explain why the Government think it right to have a charge for lorries that is based on their use of the road, but not to have a similar charge for motorists.

I hope that the amendments give the Committee the opportunity to discuss those important issues. Come 2006, there will be a complete transformation of the way in which the heavy goods vehicles on our roads are taxed. That will be to the benefit of the road haulage industry, but it needs some reassurances, which I hope the Financial Secretary will provide.

Mr. Edward Davey: I want the Financial Secretary to assure us that the clause is necessary simply to allow the Government to spend the money that is needed to have a viable operational scheme for lorry road-user charges. Once that is determined, I expect the Government to include the details of tax legislation in a future Finance Bill for the House to scrutinise. If the right hon. Gentleman can give hon. Members those two reassurances, we can proceed, hopefully to the Adjournment.

Chris Grayling: I want to put a different slant on the hon. Gentleman's comments. The issue is far greater than taxation. It represents a major change for the UK. For the first time, long-distance road pricing is coming into effect alongside the various plans that exist for congestion charging. It involves significant technology changes for our road industry and has significant implications for the Government's transport strategy. I hope that the Financial Secretary can reassure us that this is a piece of enabling legislation that will not preclude a full and substantive debate about the transport industry and the place of road haulage in that. I think that the right hon. Gentleman is nodding, and I am happy to receive that assurance.

I also hope the right hon. Gentleman can reassure us that the Government intend the measure to be revenue neutral. It must not be a way of introducing stealth taxes on the haulage industry. I am happy to give way if the Minister wants to intervene. I can see that he is keen to wind up the debate, but this is an important issue and it should not be nodded through because it is late on a Thursday evening.

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Fundamental issues are at stake. The Government's proposals have implications for rail freight and for the roads that are not encompassed by the scheme and the traffic that uses them. They come at a time when the Commission for Integrated Transport has recommended a more wide-ranging and all-encompassing scheme. I want the right hon. Gentleman to assure me that the Government will not attempt to use the legislation to railroad through a measure that is taken in isolation from the rest of their transport policy.

Mr. Boateng: Clause 134 fulfils our manifesto commitment to make sure that lorry operators contribute to costs when using United Kingdom roads, regardless of their nationality. It has been widely consulted on and has been warmly welcomed by the industry. I have listened to the arguments behind the Opposition amendments, which are unconvincing and wholly misconceived. However, I shall briefly address their aims.

It would be wrong to commit ourselves to a fixed date by which the proposals are to be implemented, as the hon. Member for Christchurch (Mr. Chope) suggested, partly for the reasons given by the Liberal Democrat spokesman. We need to be sure that we tackle complicated issues of compatibility in a way favourable to Britain's competitive interests and the interests of the haulage industry. We have therefore chosen to proceed with enabling legislation, which, in all probability, will become law in future Finance Bills. We shall bring those matters before Parliament again when they have received the technical and other consideration that they deserve and when we have developed a successful scheme; the Committee should unite on that outcome.

We shall introduce a distance-based lorry road-user charge that will apply to lorry operators working in the UK regardless of their nationality. We have made it clear that the introduction of the new charge will not increase taxes for the UK haulage industry in recognition of the fact that it already contributes towards costs that it imposes on the UK. The Government will therefore introduce offsetting tax reductions when the new charge is introduced.

It would be grossly irresponsible of the Committee to seek to bind the Chancellor in future Budgets, as amendment No. 30 seeks to do. We recognise the fact that the UK haulage industry already contributes towards the costs that it imposes on the UK, and will introduce offsetting tax reductions when the new charge is introduced. That is a clear and unequivocal commitment, which the road haulage industry well understands. In amendment No. 32, the Opposition have misunderstood the nature of our proposals and the complexity of the task in hand. It is not desirable to seek to commit the Government to charge every lorry using every public road. We shall ensure that the industry and key stakeholders are all involved before making a final decision. There is a strong case for charging every lorry using every public road, but a decision should be made only after consultation with the industry and stakeholders.

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I hope that, as a result of my assurances, the Committee, having considered the matter fully, will give the clause a fair wind.

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