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Mr. Watts: Does the hon. Gentleman agree that many hon. Members could come forward with major transport schemes that they would like to see in principle, but one of the problems is that we do not have the resources to build them? Does he further agree that one major reason why a system can be built in France much more cheaply than in Britain is the planning process there? Are the Liberal Democrats suggesting that we adopt the French planning process, which basically says that because a scheme is in the national interest it will be built without any public inquiry?
John Thurso: One thing that always impressed me about the French system is that it makes it clear that anyone affected by a scheme is compensated well above the market price. We might well learn a lesson from that, because if we could save a couple of years by paying people reasonable compensation, we might develop our infrastructure faster.
Let me get off the railways and have a chunter down the road for a bit. I hope that Mr. Eddington will consider replacing our antiquated system of fuel duty and vehicle excise duty with distance-based charging. I notice that one of the resolutions on the Order Paper today is a procedure and money resolution for the lorry road-user charge. I believe that it is the Government's
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intention to bring this in within the next two years. It must be right to consider distance-based charging, not in addition to fuel tax but as a replacement for fuel tax for motoring. In my constituency the cost of motoring is up to 15p a litre more than in the south because of the price of petrol and diesel. We have no alternatives and we have no congestion. Why do my constituents have this unfair taxation when it could be replaced by a much simpler system? I very much hope that progress will be made on that point.
In particular, I hope that the Secretary of State will ask Mr. Eddington to consider freight movement—a matter that has already been discussed this afternoon. We lack capacity in our ports and on our roads, and we can create some capacity on our railways. We need an integrated strategy to bring those together. Integrated rail freight stations are a key part of the mix.
I have welcomed free travel for the elderly and disabled, and the commitment to long-term planning—both Liberal Democrat commitments—and I want now to touch on one or two points of detail of the Budget as it relates to transport. Rather as my right hon. Friend the Member for Ross, Skye and Inverness, West said in his Budget response, this is a bit of a sticking-plaster Budget. Instead of promoting long-term solutions, it has looked at the short term. For example, I welcome the announcement that more environmentally friendly vehicles will benefit from relatively low vehicle excise duty, but it does not go far enough. Why was the opportunity not taken to put a real division between the big gas guzzlers and the more environmentally friendly vehicles? At a time when the real cost of motoring has fallen by 6 per cent. in real terms since 1997, why not take the opportunity to make that difference?
I regret the Government's decision to freeze air passenger duty, which is, in effect, a cut in real terms. I regret even more the fact that they did not take the opportunity to move away from APD, which was conceived not as an environmental tax, but simply to fill a hole in a Conservative Budget, and introduce an airport tax.
On fuel duty for cars, I believe that the Government have got it right. The current high price of oil is helping to achieve the environmental aims. While that oil price remains high, there should be no reason to increase those duty rates. I am very concerned, however, that the Chancellor should have chosen to put a whopping 23 per cent. increase on red diesel. That is a major cost increase for farmers and crofters, many of whom are in the process of digesting the changes brought about in structural funds. Such an increase is a cost burden that they could well do without. Incidentally, red diesel is also used by trains, so the cost of our railways will also increase.
In conclusion, the detail of this Budget is short term. It is about votes and not solutions, and it will be seen as a missed opportunity. The challenge for us all in this place is to deliver long-term sustainability and good planning for transport. The Liberal Democrats are ready to engage in that process and deliver it for Britain.
2.52 pm
Mr. Martin O'Neill (Ochil) (Lab):
A pre-election Budget is always going to be very thin in content for the simple reason that, if there is to be an election in spring
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or early summer, there will never be time to deal with the matters that the Government might want to include in a Finance Bill. Those of us who have laboured on Finance Bill Standing Committees will know that that is one of the good things about pre-election Budgets, as the Finance Bill will necessarily be very short, although I am not offering myself as a volunteer for such a Committee at this stage in my parliamentary life.
I was thinking today that the first Budget announcement that I listened to, unfortunately from the Opposition Benches, came at a time when I had won a seat from the Scottish nationalists. I was sitting with my right hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), who had got rid of an Independent Labour candidate, and the pair of us still believed that we had won the election in a manner of speaking. It was only when Lord Howe got to the part of his Budget speech where VAT was increased to 17.5 per cent.—[Interruption.] I am sorry, it was increased to 15 per cent. at that time, although it went up to 17.5 per cent. in another Tory crisis. Nevertheless, it went up from a relatively small amount to 15 per cent., while we saw income tax being cut and interest rates rising. There was a sharp intake of breath on the Labour Benches; we began to realise that the other side had won the election, and our delusions were over in that respect.
This Budget has been rather different. The fact that it is the ninth Budget of a Labour Chancellor is itself something of a novelty. That period has been characterised by the stability of the British economy; it has to be said that Labour Chancellors have not always presided over periods of stability. One can recall in respect of the Budgets of the 1960s and 1970s that, after much-promised and lauded largesse in the first 18 months after an election, there followed periods of stricture, cuts and political heart rending. Eventually, an almost giveaway period followed before an election. Indeed, those of us who are old enough will remember the big debate that took place in March 1970, and continued for years afterwards, about whether Roy Jenkins destroyed his chances of the premiership by having too conservative a Budget and being too restrictive with the public funds after the two years' hard pounding that he had been given since devaluation.
It is interesting that, on this occasion, the Chancellor is being attacked not because of the rate of inflation or economic growth, but because he has somehow not been successful enough in forecasting the rate of deficit. He has been successful enough in that he has kept within the parameters that he has laid down and been able to defy his critics. We have gone through a pre-Budget ritual in which we have been told by people such as those in the ITEM—independent Treasury economic model—group that the forecasts are way out of line. We have been told by others—I am not talking here about the forecasting institutions or bodies—that the Chancellor is lying and that the fiscal gap will be too high, so taxes must rise.
Yet, when the Chancellor stands up and gives the figures with the authority of the Treasury, people begin to retreat. I know that there are those who would like to believe that the Treasury will tell lies at the behest of a Chancellor. If that were the case, confidence in the City of London and UK financial institutions would be in
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large measure destroyed. People who have argued that there should be independent assessments or audits of Treasury statistics at the time of the autumn statement should begin to realise the import of such suggestions. I realise that the "Thomas the Tank Engine" school of economics that we have just had to hear about is not too interested in such an approach to economics, but there are some on the Liberal Benches who question the integrity of Treasury Ministers and the Treasury itself.
If anyone were to pay any attention to those people, there would be a serious detrimental effect on the British economy. Their enthusiasm for the euro, for example, has never created a sense of caution about the fact that it might be dangerous to think out loud about monetary policy and the value of the pound against the euro. I realise that Labour Members are perhaps partly to blame for the decision to go into the exchange rate mechanism at the level at which the Conservatives entered it, wrongly in my view, in the late 1980s. At that time, if we had argued the point and sought divisions in the UK political consensus in favour of joining, it would have been to the detriment of the country. It was therefore correct that we bit our lip and chose not to express any public fears about the figure at which we entered, as we believed that it might still be possible to have some kind of managed devaluation at a later date.
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