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23 Feb 2010 : Column 57WH—continued
I am of course aware that since the hon. Gentleman and I last debated the matter, the decision has been taken to disband Skillfast and replace it with Skillset. It is important that skills are developed in the textiles industry because of the innovative context in which it operates. We have a high-quality product from Scotland
in the textiles sphere, and he is well aware that we compete across the world successfully because of the quality of the product, particularly that which comes from the borders. We need to concentrate on skills to make that product sustainable and even more competitive so that we can ensure that there will be a positive sector in the textile industry in Scotland for a long time to come. That depends on our continuing to upskill, to improve the product and perform in a positive way. That also means that we need to attract high-quality talent, not only to the textile manufacturing industry, but to manufacturing generally.
We need to change the perception of manufacturing, so I welcome the campaign by the Engineering Employers Federation and the three-day event in Manchester next week called the Big Bang, which is for young people and is intended to encourage interest in science, engineering and manufacturing. The hon. Gentleman is an accountant, and I am a lawyer-[Interruption.] Indeed, that is a first. I must confess that when I was looking at careers in the late 1970s and 1980s, my knowledge of manufacturing was extremely limited, but in my work, I have been extremely impressed by the quality of the industry as a whole, by the intellect and intellectual challenge within the industry, by the capabilities of the management and by the great challenges the industry needs to face.
We all know that in future, we will operate in a low-carbon world, which poses huge intellectual challenges to those who work in manufacturing, and it will be today's young people who will have to meet those challenges. The Big Bang event in Manchester is about that challenge. It is about showing younger people how exciting manufacturing is, how we have a huge capability already in the UK, how we operate in a globalised industry, and how many of our major manufacturers are global players, which of course offers great incentives to individuals to work in those spheres. I am a great proponent of manufacturing as a career for young people. We have a proud history and tradition of manufacturing in the UK, and in Scotland, and I think that in recent decades, we have not shouted loudly enough about its importance. I strongly welcome the fact that the EEF is promoting manufacturing, and welcome the Big Bang event in Manchester, and I encourage younger people to get involved in it.
The hon. Gentleman raised a couple of points, one of which related to VAT, and I am aware of the concerns in that regard. VAT rebates on exports are legal under World Trade Organisation rules. That is a normal part of global trading, but the allegation of manipulation of the rebates is an issue of real concern, because it can lead to trade distortions. I can assure him that DBIS officials are consulting the UK textiles trade association and individual companies to see whether China's export VAT rebates are a widespread concern and to obtain any evidence of export rebate manipulation. We are considering that issue, and any information he has that would assist further with that would be gladly received.
Foreign-Registered Lorries
1 pm
Mr. Austin Mitchell (Great Grimsby) (Lab): I am grateful for this opportunity to raise the issue of the increasing number of foreign lorries using our crowded, over-used and, to some degree, crumbling road system and taking an increasing share of business from British hauliers. They are grabbing an increasing share of the cabotage-domestic business-and constituting a threat to our British haulage industry. The number of British vehicles fell by 30 per cent. between 2005 and 2007, and it has fallen more since then, yet foreign lorries operate tax-free here while British lorries face in Europe an increasing burden of tolls and charges which are driving them out of European business.
I want today to ask the Government to assert the principle of British lorries for British business by creating what one might call a level motorway, and by taxing the foreign lorries using our roads to ensure that they pay their dues. This is a plea to Ministers to end the kind of defensive complacency that has characterised our approach to the increasing number and proportion of foreign lorries up to this stage.
The problem has been growing for some time, and it has been amplified by the entry of new eastern European countries to the European Union, particularly Poland, whence many lorries come, and, since May 2009, by access of foreign lorries to the UK domestic market. Increasing numbers are coming and using our roads. The Vehicle and Operator Services Agency tells us that such lorries are three times more likely to have mechanical defects than British lorries. They are also more likely to be involved in serious accidents. Indeed, the Department of Trade and Industry as was-may it rest in peace-estimated in 2008 that they were eight times more likely to be involved in a serious accident. They are less likely to pay fines imposed by VOSA. Indeed, until last year, it seems that they did not much bother to pay fines. Now fines are mandatory and are being paid, but not at the same level as British operators.
Foreign lorries now have 80 per cent. of the roll-on/roll-off business to Europe, whereas, 10 years ago, British firms had just over one half of that business. That is an indication of the increasing share of the market that foreign lorries are getting. They are also doing domestic business. Trailers are shipped to UK ports, coupled with foreign trucks which are here already and delivered to UK destinations under that system.
I often go out to Immingham to get a breath of fresh dock air from the North sea and to view the charming docks scenery. There we have a huge lorry park provided by North East Lincolnshire council. It does not give anything away to the residents of north-east Lincolnshire, of whom I am one, but is free to foreign lorries which appear to be the main users-they are the large proportion of users. On a weekend, there are usually about a dozen Walter Koop lorries there waiting to be coupled up to trailers coming in across the North sea for delivery in this country, and those Koop lorries appear to me, a casual driver driving past, to stay in this country.
There are also on any given weekend about 20 or more other foreign lorries: German, Dutch and Polish. There is a large lorry population that appears to be resident in this country and allowed to use our roads yet cannot be paying taxes in this country, because we
do not levy tax on them. I want the Minister to have a look at the Immingham lorry park and tell us whether those vehicles in fact go home. Do they pay road taxes and dues anywhere? They are not paying them here, yet they appear to be permanently stationed here.
Foreign hauliers start out with a huge competitive advantage over our hauliers. When the lorries first come in, they have full tanks that hold up to 1,200 litres of diesel. Despite the devaluation of sterling, diesel is still half the price in Europe that we pay here. Also, many hauliers use cheaper drivers. I do not understand the language of the drivers in the Immingham lorry park who invite me to go forth and multiply after taking photographs of them. They appear to be eastern European and have little English. I suppose that they are reliant on satellite navigation for getting around the country. The drivers of those foreign vehicles are certainly paid less than British drivers.
We allow foreign lorries, with those competitive advantages, to operate here free of tax and charges. They make no contribution to our roads, despite the damage that they do to them. They make no contribution to our health costs, yet they emit large quantities of health-giving diesel fumes across our countryside. They cause accidents but, unless they are fined, they make no contribution.
Meanwhile, our lorries are heavily taxed. The standard rate for large articulated goods vehicles is, at its highest, £1,850 for 12 months. British lorries are highly taxed, but their European competitors are allowed to operate for free in this country. That is an unfair and unreasonable competitive advantage to them and an imposition on the British industry.
It is no wonder, in that situation, that the British lorry fleet is declining in numbers. Governments of both parties have been content for a long time to tax lorries heavily in the hope of transferring business to the railways, where it can be efficiently dealt with. Unfortunately, the heavy pressure of taxation has succeeded in transferring business not to the railways but to foreign lorries delivering in this country. That is a total failure of the policy of heavy taxation of road transport.
Yet British lorries face substantial charges when they go to Europe. First, they face heavy toll charges on the motorways, certainly in France; charges are slightly lower in Spain and Italy. It is not that such charges are a voluntary tax on those who use the motorway, because the increasing use of weight restrictions forces drivers off the secondary roads and on to the motorways where they have to pay charges which we do not impose in this country. Those huge toll charges can increase the cost of delivering goods to Spain or Italy by £100 or more.
The Government might say that if we had toll charges here-we have a few miles on the M6, I gather, and there is the iniquitous Humber bridge charge, which is the highest estuarial charge in the country-we could equal those charges. But we cannot; we do not impose such charges here.
Secondly, British lorries face vignette charges. I have a vignette here. It is a complicated little document which was purchased on the ferry going over to Europe. It applies in Belgium and Holland. It costs €8 per day to operate in those countries and the charge could, I gather, go up to €11. The one I have here is for €8. That is a charge on British industry that foreign lorries coming here do not have to pay.
Thirdly, there is the elaborate and very expensive system of road user charges in Germany, which are charged per kilometre and depend on the emissions level of the lorry. Those charges must be paid on entry, so a lorry drives over the border into Germany and it has to stop at the nearest available filling station to buy tickets. I have some tickets here, which were paid by Grimsby vehicles going into Germany. These are some of the charges: for a Euro 2 vehicle for 119 miles it is £53 for a single journey to the point of delivery. That is a hefty charge on a British lorry. There would be another charge, payable at another filling station, coming back. For a Euro 3 vehicle for 93 miles the charge is £30. The figures are in euros, of course, but I have converted them. For a Euro 3 vehicle for 128 miles it is £40.
How is it legitimate for our vehicles to face those heavy charges in Germany? Although the motorways are free, the vehicles are charged for their one-way journey and then face another charge for the journey back. There is no time to hang around in the hope of collecting a return load, because a charge is payable for that time as well and for driving to collect the load. It is a heavy burden on British lorries, and if they do not pay or do not have a ticket, they are stopped and dragged off to a cash point to raise the money with a credit card-as our former Prime Minister, Mr. Blair, would have done with hooligans. The fines can be up to €1,000. The German authorities seem very flexible and sometimes commute the fines, but they are heavy. When drivers ring the British embassy, they are advised to cough up and claim it back later-that is helpful advice. It solves nothing if they have not got a credit card. That is the situation.
The German system is called Toll Collect and is run by a central computer. There are 300 vehicles patrolling the autobahns, with 550 staff from the Federal Office of Freight and 300 overhead gantries monitoring the vehicles. The system cost €700 million to install. German vehicles are required to carry an on-board unit, because they have to pay charges as well, although I am not sure that they pay them on this scale. It would be horrendous if the charges levied on our lorries were exercised on German vehicles. The unit clocks up the charges. British vehicles have to buy tickets instead.
That scale of charges through tolls and vignettes in the German system is in sad contrast to the situation here, where European lorries operate for free and get a warm welcome in our free car park in Immingham, which is well placed for pizza and the pub. They get a good deal in this country. My question for the Minister is, what are we going to do about it? The Government have tried; they have spent £40 million on consulting for a system of dealing with the problem. In 2002, they proposed legislation for what was variously called a British road infrastructure tax disc or a vignette, but they dropped that idea to look at road charging more generally, which they then dropped to do nothing. The vehicles are still not being charged and the situation gets worse.
I have put forward proposals from my constituent, Mr. Alan Overton, for a control system less elaborate and expensive than Germany's. People would be charged on entry and the system would be monitored by 40 vehicles and a central computer. I put that to the Ministry, and it has shown no interest. We have an increasing problem with foreign lorries, which are making no contribution,
and our Treasury is desperate for tax contributions and to levy taxes. If imposed, the system would produce serious revenue for the Government. Why are we ignoring the opportunity to do something, when industry is crying out for something to be done? The foreign lorries are making no contribution and exploiting our good will. The proposal would raise tax revenues to deal with the current economic difficulties.
In conclusion, why is nothing happening? Why is there a complacent belief that the water around the coast is a sufficient barrier to protect our industry when it has been so badly hit in Europe? Will the Minister meet me and Mr. Overton to discuss the issue? Will he act urgently to see that foreign lorries pay their share and will he accept the view that I offer today? If the Conservatives win the election, and I devoutly hope that they will not, they, and the Liberals, are committed to acting, so why are the Government not acting?
Surely, it is not beyond the wit and ability of officials in the Department for Transport and the Treasury to devise a tax structure for foreign vehicles that ensures that they pay the same kind of heavy taxes, proportionate to their briefer stays in the country, that British lorries pay. Why should they not pay their share of the vehicle duties that we impose? At a minimum, why should they not pay the €11 a day vignette charges, which are allowed? Why should they pay nothing? Surely, the brains at the Department for Transport, if applied to the matter in conjunction with the supreme intelligence at the Treasury, can devise a system that works, is acceptable in Europe and produces revenue, which we desperately need, to deal with the problem.
1.16 pm
The Parliamentary Under-Secretary of State for Transport (Paul Clark): It is a privilege to serve under your chairmanship, Miss Begg. I thank my hon. Friend the Member for Great Grimsby (Mr. Mitchell) for securing the debate. I recognise, as do the brains of the Department, that the issue gives rise to a great deal of heated feeling. However, he will be aware that this is not a new debate. It has probably raged for at least a decade, with various statements appearing to become fact, when that is not the case.
In the time available, I would like to run through some of the issues, including all of those that my hon. Friend raised, and set out the history. There is no complacency on the part of Ministers in the Department for Transport, the Government or other officials. It is absolutely right that the brains of the Department and of Ministers could come up with a scheme, but it would have to achieve what he wants, provide value for money, bring money in to the Exchequer and make balanced adjustments for UK-registered vehicles, which would have to be charged the levy to which he refers. Complexities arise, which is why I would like at the outset to refer to the history of how we charge for roads. I want to come on to deal with cabotage, the number of accidents, the certificate of professional competence, and foreign driving standards.
Due to the complexities of the subject, and because it gives rise to strong feelings, it is important to look at the history of lorry charging policy development. In 2000, the Government announced plans to consult on a vignette, which some hon. Members may remember as the BRIT
disc. What emerged from that consultation with many interested parties and stakeholders across the board was the fact that we should look at a more sophisticated distance-based scheme rather than a straightforward one-off vignette payment.
Between 2002 and 2005, we investigated proposals for a lorry road-user charge, and considered options based on microwave and satellite technology to track goods vehicles and to impose distance-based charges, such as those in some of the countries to which my hon. Friend referred. However, in 2005, the then Secretary of State for Transport told the House that although a distance-based lorry charging scheme showed potential, it was more sensible on our shores to focus on a broader road-pricing strategy. My hon. Friend will be aware that matters have moved on, and that the current Secretary of State has ruled out national road pricing during the life of the next Parliament.
That process led the Government to revisit alternative and simpler options for charging foreign lorries, and that work culminated in the freight data feasibility study, which considered a wide range of options between 2006 and 2008. It soon became clear that the most promising option in terms of value for money was an electronic vignette system. If that system had come into operation, UK hauliers would have paid a six or 12-month vignette alongside vehicle excise duty. Meanwhile, foreign hauliers would have bought a vignette for a specific vehicle for a specific time. Enforcement for UK hauliers would have been an extension of VED enforcement.
Clearly, we would have had to take steps to work with that scheme, but the freight data feasibility study analysis showed that even that electronic vignette system would not be good value for money. In his 2008 Budget statement, the Chancellor confirmed that because the electronic vignette would have delivered only limited safety, congestion and environmental benefits, the Government decided not to introduce it. However, I emphasise that that does not mean that work cannot be done inside and beyond government on charging foreign vehicles. Work can continue to examine enforcement procedures, including a range of issues raised by my hon. Friend. The work that was done has not been wasted.
Mr. Mitchell: Will the Minister confirm or deny that the problem with an increased charge on British hauliers through the vignette system is that it would have to be eased by a reduction in fuel duty, which is very high in this country? Is it true that without a reduction in fuel duty, the industry did not want the vignette system?
Paul Clark: There were a number of reasons, and value for money was one complexity. Another was managing the necessary reduction for UK-registered vehicles without introducing a heavy bureaucratic and costly exercise that would not achieve in reality what I believe my hon. Friend wants.
The Eurovignette directive, which governs the whole lorry-charging policy throughout the European Union, is complex, and it would be rather dry to read it out, so I am sure that you would not want me to, Miss Begg. However, it stops member states imposing a charge on foreign hauliers without their imposing the same charge
on domestic hauliers. It also stops member states imposing a time-based charge of more than €11 a day. There is more flexibility, but it only reflects the cost of the infrastructure when moving to a distance-based charge.
The directive also requires member states to impose tolls and charges in ways that
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