Examination of Witnesses (Questions 440-459)
26 MAY 2004
RT HON
ALISTAIR DARLING
MP, MR JOHN
STEVENS AND
MR MICHAEL
SMETHERS
Q440 Mr Randall: Do you think that a
single market should require the harmonisation of fuel duty used
for road haulage?
Mr Darling: No, because tax is
a matter for Member States. I am absolutely sure about that. We
were talking about red lines earlier, and taxation is one.
Q441 Mr Randall: Would you not say, in
a way, that aviation fuel is harmonised throughout the world because
it has an exemption already?
Mr Darling: That is part of an
international treaty reached in the late 1940s, I think.
Q442 Mr Randall: You do not think there
is anything that should be done for road hauliers' fuel?
Mr Darling: No, because I think
matters of taxation—
Q443 Mr Randall: I understand that.
Mr Darling:— are not up
for negotiation. So the answer is no.
Q444 Mr Randall: Do you think UK road
hauliers are justified in their complaints about their inability
to compete with hauliers from other EU states?
Mr Darling: I think you need to
look at costs and taxation in the round. For example, if you are
a French haulier it is more expensive to hire employees, because
the cost of hiring an employee in France is more than it is in
this country. VAT rates can be higher in other European states
than they are in this country; even personal taxation rates are
different. The second thing is this: you will remember in the
year 2000 that one of the reasons we introduced the Lorry Road
User Charging system is that it charges on the basis of distance
travelled. This was one of the things that the industry themselves
wanted because they said that is a fairer way of making sure that
continental operators coming onto UK roads paid to use UK roads,
whereas their argument was that they load up with petrol in Calais,
or wherever, and they did not necessarily have to buy fuel from
this country at all. So the Lorry Road User Charging system has
huge benefits also to us but actually, so far as the industry
is concerned, it is something they very much welcome.
Q445 Mr Randall: You would rather take
the view that the road hauliers over here are looking at one issue,
and that there are some pros and some cons.
Mr Darling: As in everything in
life, you have to look at things in the round.
Q446 Mr Randall: Do you think road hauliers
have made the most of the opportunities that the EU offers them?
Mr Darling: Some have, I suppose,
and some have not. What do you have in mind?
Q447 Mr Randall: What does the Government
do in the way of helping them take advantage?
Mr Darling: We will do anything
we can to help hauliers in that regard, but basically this is
an example of where we need to be careful in trying to usurp the
function of the market, or standing in the shoes of a particular
haulier. It surely must be for hauliers to exploit markets as
best they can, just as they do in this country. If people want
help in terms of explanation or education or in terms of having
difficulties within a Member State and they need our help, of
course we stand ready to give it. What we cannot do is be their
marketing department, if you like, and they would not want us
to be, I suspect.
Q448 Mr Randall: Do you have a specific
area or some facility where UK road hauliers might say "Can
you give us some help on how we can take the best advantage of
going into Europe?"
Mr Darling: As you know, we maintain
regular contact with a number of trade associations, at official
level and also at ministerial level as well, and when they raise
matters of concern if we can help then we will certainly do what
we can. I am not going to say to you we could not do better—there
are always things that we could do better—and if there are
specific proposals that the industry or individual hauliers have
in mind, of course we stand ready to help, but our objective is
to try and ensure that we have as open a market as possible so
that UK hauliers, for example, and many of them do, can take advantage
of the skills and prices they can offer in continental Europe
and not just here. That is the whole rationale behind the single
market.
Q449 Mr Randall: Secretary of State,
you mentioned the Lorry Road User Charge. Is there anything to
stop the UK introducing that in advance of EU legislation?
Mr Darling: I think we probably
could do it but there is a view that the 1999 Directive needs
updating because the concept of road user charging was pretty
undeveloped even five years ago. It would be much better if we
had a directive that cleared up a lot of the things that are not
clear at the moment. The answer is we could do it. As it happens,
because it is due to come in, I think, in 2007-2008, I hope there
will be a new directive prior to that time. It would have been
nice if we had reached agreement in March, but it was not possible
to reach agreement then and I think we are going to have another
go at it in June.
Q450 Mr Randall: EU legislation is not
necessary but obviously would be preferable?
Mr Darling: Yes, because with
anything like this you want legal certainty. We could introduce
the scheme. It may be that there would have to be amendments slightly
to take account of the existing directive, but I think it would
be better if we could get a new directive because then that would
deal with a lot of the matters that were not about in the late-1990s
that we know about now and need to be sorted.
Q451 Mr Randall: Is the Government opposed
to the principle of hypothecation of revenue raised by road user
charging, or the agreement of any hypothecation at European level?
Mr Darling: Yes, we are and that
has been the position of successive British governments. I think
the problem, really, is this: that in continental Europe there
is a history, in some countries, of tolled roads whereby you collect
a toll and the money then goes back into that particular road
or into roads generally. Until the M6 opened at Christmas time,
with the exception of some river crossings, we did not have any
tolled roads in this country. So for countries that have that
history of tolled roads hypothecation is not a problem because
that is what happens. When you go further than that—suppose
you were going to have a wider system of Lorry Road User Charging
and you then had hypothecation—it completely changes the
way in which we fund public expenditure generally in this country.
We do not hypothecate in this country, generally speaking (there
is one big exception, I think, and that is the penny on National
Insurance which went into the health service)—
Q452 Chairman: Congestion charging.
Mr Darling: We do not, generally,
hypothecate in this country and successive British governments
and most continental European governments take the same position,
especially their finance ministers, for obvious reasons.
Q453 Mr Randall: Finally, could you tell
me what particular challenges the transport sector has posed to
the recent expansion of the EU?
Mr Darling: I suppose negotiating
a satisfactory Eurovignette is one; we have mentioned the EU/US—that
is another one. There is a whole range of issues where something
has been proposed that we need to work hard on to make sure that
it fits with what we would like to see. It is a question of being
vigilant on all fronts, really.
Q454 Mr Randall: There is no way, particularly,
that those countries that were in the former Eastern Bloc impact
on the transport sector?
Mr Darling: I think the big impact,
I suppose, as you would expect, with a lot of the accession countries
which have pretty elementary infrastructure, is that they are
looking to see what additional funds they can get to help them
develop. The whole argument of a European network tends to be
the way—the new countries tend to look at it from the point
of view of what help can they get and the older countries tend
to look at it from the point of view of how do we contain this
budget?
Q455 Mr Randall: There is nothing specific?
Mr Darling: There is nothing new
there.
Q456 Mr Randall: There is nothing that
has landed on your desk recently that has arisen from the—
Mr Darling: No, on the contrary.
Actually a lot of the newer countries are quite open to some of
the things. If you take our view on liberalisation of markets,
some of them are actually very helpful to us.
Q457 Mr Stevenson: Secretary of State,
the Commission seem to be intent on representing, or attempting
to represent, all Member States on such bodies as the International
Civil Aviation Organisation and the International Maritime Organisation.
What is the Government's view of that ambition?
Mr Darling: We think that is really
a matter for the Member States who are members of it, in that
these are truly international organisations and they comprise
Member States. That has been our position. I know the Commission
has, from time to time, wandered in to the IMO for example, and
I am not sure if it has been unanimous but certainly the majority
view of Member States is that they should remain members.
Q458 Mr Stevenson: With regard to the
European Safety Agency, which will take on the responsibility
of air safety from this year—
Mr Darling: It will be dealing
with some aspects of it.
Q459 Mr Stevenson: It does not alter
my question. My question is two-fold: how are we going to guard
against duplication and how are we going to maintain the high
standards we have in the UK in those areas that are transferred?
Mr Darling: They are both very
important points. Again, it comes back to this point: what do
you need to be concerned about at a European level? If you take
aviation, for example, we want to make sure, for example, that
the same standards are applied in relation to airworthiness or
things ultimately like checks on aircraft and so on. We want to
be satisfied that aircraft coming from other parts of Europe,
and indeed other parts of the world but in this sense Europe,
flying into Heathrow, for example, are properly checked. So there
is a good argument for having common safety provisions. However,
it is likely to be the case for some considerable time to come
that the actual policing of this and checking will rest with Member
States—in our case the CAA. On your second point in relation
to cost, yes you need to be very clear we do not end up paying
twice for the same thing. I think we have somebody on the European
Safety Agency.
Mr Stevens: We have a chairman
on the Maritime—
Mr Darling: But on the European
Air Safety one?
Mr Stevens: On the Air Safety
one we have people attending.
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