| Previous Section | Index | Home Page |
9 Mar 2010 : Column 18WH—continued
Motoring taxes are primarily revenue-raising to serve and support public finances and to fund public services. I note that the hon. Member for Ribble Valley kept referring to them as stealth taxes. I suspect, frankly, that he does not think that the stealth taxes have provided the £1.34 billion of regional funding allocation for the north-west region, and that that is pie in the sky, and some sort of stealth expenditure. It is not; nor is the 11 per cent. increase in funding for local transport schemes in his region. That is the reality of funding real schemes that are out there and making a difference for all those
who travel, let alone funding such as the £2.3 billion for bus services in this country and the record billions of pounds that are being spent on the railways.
Bob Spink: The Minister is being extremely generous. Does he acknowledge that the toll, which is a tax, on the Dartford crossing is to raise taxation for public services? It certainly does not stop congestion; it increases it, and it certainly pumps more carbon into our atmosphere. Will he acknowledge that?
Paul Clark: I am delighted that the hon. Gentleman refers to the Dartford crossing. I intended to speak about it, and I will do so now. The toll is not a tax; it is a congestion charge, which was changed in 2003 on the basis of modelling that showed that if there were no charge, the level of use of the tunnels and crossing would increase by some 17 per cent. To remove the toll process or congestion charge would lead to even greater congestion than that which I accept now exists at the plazas. However, I am sure that the hon. Gentleman recognises that no one must pay more than they did, because the charges for the DART-Tag system remain the same, and it eases throughput.
The hon. Gentleman will be well aware that we are undertaking various work and modelling on alternatives-for example, charging for one way only. However, we must consider the effect of that on traffic patterns and the lengths to which people might go to use alternative routes to cross the river. There are complications. The charge that has been introduced is a congestion charge, and the hon. Gentleman is well aware that residents on both sides of the crossing receive generous concessions, including free trips and reduced costs for a number of trips over a specific limit.
Motoring tax revenue is combined with all the other taxes that come in through the consolidated fund, and supports a range of Government spending priorities, so it is misleading to compare motoring tax revenue with road or transport spending by hypothecating revenue to spending on specific programmes. Doing so would reduce flexibility, and could lead to misallocation of public resources, and poor use of taxpayers' money.
Hon. Members referred to the fact that, when it is sensible and effective so to do, we link such taxes to other Government objectives, such as environmental objectives, and one instance of that is the vehicle excise duty. Hon. Members are aware that tax-raising activities are matters for my right hon. Friend the Chancellor of the Exchequer, who considers each tax as part of a wider fiscal judgment in the normal Budget process, taking into account social, environmental and economic considerations.
Mr. Goodwill: Has the Minister made any representations to the Chancellor on resuming the rolling exemption for historic vehicles, which was 25 years but now approaches 40 years?
Paul Clark: The hon. Gentleman will be aware that any Department worth its salt has continuous discussions with the Chancellor and the Treasury, and those discussions continue on a range of taxation issues. I shall leave the matter at that, because it is a continual process.
I have made it clear that fuel duty contributes to the Government's sound financial provision of services. We announced in the previous Budget that fuel duty rate would increase by 1p a litre in real terms from 2010 to 2013. The main fuel duty is a set rate that is levied on producers when the fuel leaves the refinery, and is currently 56.19p a litre. The hon. Member for Manchester, Withington (Mr. Leech) referred to lower real-terms costs for motoring today. The rate of tax is lower in real terms than it was 10 years ago. Indeed, if it had risen in line with inflation since 1999, it would be well over 60p a litre. Even after the increases announced in the Budget last year, it will be lower in real terms than it was.
Fuel duty is an appropriate tool to secure public finances, and is in line with the Government's environmental agenda. It makes an important contribution to meeting our legally binding carbon budgets. As well as supporting public finances, the increases announced in last year's Budget are estimated to reduce the UK's CO2 emissions by 2 million tonnes a year by 2013-14. This is not about cash cows or stealth taxes. Apart from ensuring sound public services and public finances, it is about delivering on our environmental agenda, which is critical.
Mr. Evans: What is being done to incentivise the development of electric cars and battery technology? Surely that is the way to go. Rather than caning those who have petrol and diesel cars, we should incentivise people to look into alternative forms of vehicle.
Paul Clark: I am pleased that the hon. Gentleman has raised that issue. The carbon reduction programme runs across the Government, including the Department for Transport, and I am delighted that the Secretary of State for Transport has announced substantial funding for research and development along those lines, to look at electric vehicles and at investment in charging points, which were mentioned by the hon. Member for Scarborough and Whitby.
I reassure the House that the Government are sensitive to the impact of high fuel prices on those who live in rural areas. They often have no choice but to drive and may have to travel further to access those essential services that are perhaps more readily available to city dwellers. I will pick up on one point raised by my hon. Friend the Member for Manchester, Blackley (Graham Stringer), who has unfortunately had to leave the debate. The Local Transport Act 2008 was introduced specifically because not everybody is able to drive, even if they live in rural areas. There may come a point where someone does not wish to drive, so alternatives are important if we are to avoid social exclusion. That is one of the reasons why, among other things, the 2008 Act allowed local authorities a stronger influence on maximum levels of fares, timings and frequencies of routes and, where appropriate, to introduce quality contract schemes such as those found in London. We also changed community transport provisions-if I recall correctly, section 19 and 21 licences-to help to ensure that rural communities are better served. The 2008 Act provides excellent opportunities for local authorities, but it needs strong leadership to take that forward.
As I have already emphasised, fuel duty is charged at a single rate across the UK. Higher prices in remote areas have nothing to do with the level of duty and the regime in place. Prices have more to do with market
forces such as higher transport costs or lower levels of competition between fuel sellers in the region. It has been suggested, for example, that a reduced rate of fuel duty should be set in rural areas to bring prices down. However, hon. Members will be aware that if that were to happen, there is no guarantee that the reduction would be passed on at the pump, and that prices would be any lower for those using rural stations and would not simply be absorbed into the fuel seller's margins. Furthermore, such a measure could distort the market and lead to the perverse situation where people would drive many miles to get "cheap fuel", increasing carbon emissions. Drawing boundaries between high and low-duty areas is likely to be quite arbitrary.
One or two other matters have been raised by hon. Members. Insurance is decided by an assessment of the risk of the individual involved and the group in which they fall for insurance purposes. It is a commercial decision by individual insurers based on their underwriting experience and the statistics and information that is available through numerous sources. Bearing in mind my responsibility for road safety, I have discussed with people in the insurance industry what steps they might be able to take. The hon. Member for Manchester, Withington referred to the Norwich Union pay-as-you-go programme, and that was a matter for it to decide on. There are opportunities out there, and the Government are ready to work with the insurance industry on motor insurance. The hon. Member for Scarborough and Whitby referred to the continuous registration process which, among other things, is about ensuring that we deal with people who do not have insurance provision and so on. That is essential.
Over the past five years, the hon. Member for Ribble Valley has made numerous statements on speed cameras-in 2004, 2005, 2006 and 2007, as well as publishing a formal statement in 2009. Let me say clearly that the Government believe that speed cameras have a role to play, and where appropriate-although they are not appropriate in all cases-they are a valuable and cost-effective method of enforcing speed limits. There can be no doubt in the mind of any hon. Member that speed kills. Going over the speed limit, or going too fast, was a
contributory factor in 26 per cent. of fatalities in 2008, the last full year for which figures are available. That means that speed was a contributory factor in 586 of the deaths recorded in 2008. Going over the speed limit, as was the case in 14 of those fatal accidents, caused 362 deaths. That is one every single day.
However, the situation has improved. In 1998, 69 per cent. of drivers went over the 30 mile-an-hour limit, but by 2008 that had fallen to below 50 per cent. That is an important development. My hon. Friend the Member for Manchester, Blackley asked about the national safety camera programme and its independent four-year study from 2005. That study found that safety cameras had led to a 42 per cent. cut in the number of people killed or seriously injured on the roads. In other words, 1,745 fewer people were killed or seriously injured last year because of speed cameras. Hon. Members will be aware that speed cameras have been the responsibility of local partnerships since 2007. They are a tool that local authorities and safety partnerships have in their armoury to make the roads safer in their local communities. As part of that process, since 2007 local authorities and those safety partnerships receive a further £110 million every year for road safety measures.
We believe that local authorities should look at 20 mile-an-hour zones and limits in predominantly residential areas around schools, shops or play areas, for example, and that has been widely welcomed. I recently held a consultation on that and we will issue revised guidance shortly. On drink-driving, we are looking at the options. There are complexities involved in reducing the limit to a lower level, but together with Sir Peter North we are taking forward the work that he is undertaking as part of a new road safety strategy.
This has been an interesting debate. Far from considering motorists to be a scourge, as was claimed by the hon. Member for Ribble Valley who introduced the debate, I assure hon. Members that the Government take motorists seriously and seek to ensure that the roads are safe and as free from congestion as possible. We will continue to invest record sums in transport as we have done over the past 13 years.
Raising of the Pension Age
11 am
Harry Cohen (Leyton and Wanstead) (Lab): First, may I thank Mr. Speaker for granting me this debate on the raising of the pension age?
For various reasons, I am retiring at the next general election at the age of 60-after 44 years of work, I might add-although I am prepared to continue my working life in other ways for a little longer, if I get the chance. However, I have some unfinished business in the House, part of which relates to the proposed raising of the pension age. That proposal went through Parliament with relatively little controversy or debate, partly because the proposal was extended into the future with the promise that it would be kept under review, which mitigated the controversy. The Work and Pensions Minister at the time, my right hon. Friend the Member for Stalybridge and Hyde (James Purnell), said:
"Although I accept that there are limitations on what the current data can tell us, I am confident that our timetable for change will not disproportionately affect those with below-average life expectancy, as compared with their position today. As a further safeguard, we have made clear our intention to commission periodic reviews of the evidence on life expectancy, to ensure that our timetable remains on track. That will include consideration of whether the qualifying age for the guaranteed pension credit should remain at 65 after 2024".-[Official Report, Pensions Bill Committee, 30 January 2007; c. 223.]
The mood music is now different, as I shall point out, and I think that the process is being driven by factors other than checking the data.
I regret that the proposal went through Parliament so easily because complicated and unfair aspects remain unaddressed. The deal of raising the pension age on the one hand and giving benefits to pensioners on the other will unravel. I believe that the raising of the pension age will be brought forward, and that increase will be further and faster, while the benefits will be reneged on and watered down, if they are supplied at all, and that is why I oppose raising the pension age.
Let me make a couple of factual points. The House of Commons Library points out:
"It is important to stress that the 'retirement age' and the 'pension age' are not synonymous. The retirement age is the age at which one can be required to leave work. The pension age is the age at which one can start to draw an unreduced pension."
The current state pension age is 60 for women and 65 for men, but it will rise for women from this year to 65 by 2020. It will rise for both men and women to 66 between 2024 and 2026, to 67 between 2034 and 2036, and to 68 between 2044 and 2046.
The Government's reforms mitigate the worst effect on women by reducing the time for contributory work from 39 to 30 years. I warmly welcome that, as it means that many more women will get a pension. However, I am concerned about the arbitrary date for eligibility because there could be a huge difference between the positions of a woman born on the cut-off date or just after, and that of a woman born a few days before that date. That seems unfair, and the Government should have been prepared to put a transitional arrangement in place.
Bob Spink (Castle Point) (Ind):
The hon. Gentleman will be aware that the Conservative party plans to accelerate the point at which the retirement age for men
is increased to 66 to 2016. Does he think that that is about quality of life or helping employers, or simply to raise an extra £13 billion?
Harry Cohen: The hon. Gentleman anticipates my speech. I have those very points to make but, as he will gather from my remarks, I agree with him.
Mr. Greg Hands (Hammersmith and Fulham) (Con): May I set the record straight? That is not the position of the Conservative party. Our position is to raise the pension age from 2016, not by 2016. That is an extremely important difference.
Harry Cohen: I am not convinced and neither is the hon. Member for Castle Point (Bob Spink). We will explore the issue further during the debate.
Other reforms that the Government brought forward included a promise to increase the basic state pension in line with earnings by the end of the next Parliament, although of course that assumes that there is not a hung or short Parliament. The Government suggested that the reform could be introduced by 2012, but the end of the next Parliament could be 2015. I believe that that promise will be reneged on, especially by a Tory Government who are looking to cut public expenditure sharply.
The Government's other reform was to build up private pensions over time through a state-set-up stock exchange-linked fund called personal accounts, which would cover more people than at present and make them eligible for a pension. Although such schemes can work, as I saw for myself in Sweden with the Select Committee on Work and Pensions, this one has got off to a most unpromising start. It is meant to have contributions of 4 per cent. a year from the employee, 3 per cent. from the employer and 1 per cent. from the Government, but those figures are far too low for the scheme to be effective. Some workers will contribute but gain nothing out of it for their final pension.
The Government cancelled the commitment to the contribution for two years to save public expenditure, and you can bet your life that a Conservative Government would not pay either, as they would be concentrating on budget deficits. The cancellation for two years was an unpromising start.
The Minister for Pensions and the Ageing Society (Angela Eagle): I will deal with the point about an unpromising start in my main response, but I want my hon. Friend at least to admit that the 8 per cent. contribution he talks about in the national employment savings trust is the minimum. We anticipate that many employers and employees will see the sense in saving, especially over time, and will increase their contributions from that minimum.
Harry Cohen: I accept that that could be a minimum. Indeed, some occupational pension funds are very good and might well give larger contributions when they transfer across. However, it is more likely that employers will keep the contributions right down and we will not see what the Minister describes.
John Mason (Glasgow, East) (SNP):
To follow on from what the Minister said, individuals and companies are trying to cut their costs as much as possible. Does
the hon. Gentleman agree that there is a lot of concern that the absolute minimum will be put aside, not the maximum?
Harry Cohen: That is certainly my fear.
Many of the lowest paid workers, including those with a couple of part-time jobs, will not be in the scheme at all. Many employers will encourage their workers to opt out so that they can save money. Although the scheme is set up by the state, there is no state guarantee to back the fund. If the stock market collapses, the fund could be devastated, as could individuals' pension pots.
I argued in the Work and Pensions Committee that it would be perfectly feasible and reasonable for the Government to guarantee fund growth of at least 1 or 1.5 per cent. a year. It is claimed that stock market investments grow at a significantly higher rate than that over time, so it would be relatively easy for the Government's extra commitment in the bad years to be made up in the good ones. However, there is no such guarantee.
This is not the bold scheme that was needed from a Labour Government to replace our overall employer-based set-up. That set-up is very good when it comes to the operation of pension funds, although that is true mainly for wealthier, well-organised workers. As we know, however, occupational pension schemes are collapsing in all sorts of ways and do not cover enough workers by a long way.
The personal accounts fund will be left to wither under the Tories, however much they bluster now. It will be ripped off by consultants and pension fund managers who charge a high rate of interest. At the end of the day, it is likely to be inadequate for many workers.
That, then, is the diminishing of the benefits side of the deal that brought in the raising of the pension age, but we should also look at what the Tories are signalling for the raising of the pension age to 66. As the hon. Member for Castle Point said, they are rushing it forward to 2016 for men and to 2020 for women.
Mr. Hands: May I reiterate the Conservative party's position? We have said:
| Next Section | Index | Home Page |