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Christopher Fraser:
The first thing that my constituents want is fairness in pricing when using the road, which includes fairness in the provision of fuel. In places such as Norwich, fuel is a lot cheaper than it is in rural areas and so elderly people on fixed incomes are disproportionately penalised. In a debate in Westminster Hall a couple of weeks ago, in which I participated, we considered fuel pricing differentials. I am afraid that the
Government did not walk up to that problem, and the road pricing issue might well be another such case. I am not going to hold it against the Minister, who is a decent man, and I hope that he will consider this issue with sincerity and will take action.
The villages in my constituency are dying on their feet as local service provision is taken away. People do not use their cars as a luxury but as a necessity, so roads are all the more important. However, as my hon. Friend the Member for Kettering pointed out, the roads are in an incredibly bad condition-we have had a bad winter-but no one seems to be walking up to the fact that a lot of money needs to be put into their maintenance.
The nub of what I would like to say in my short speech is that in Norfolk, as in many counties, the people who use the roads are not just local people or British nationals but people coming from abroad. We have a thriving haulage industry in Norfolk because of the requirement to move goods from port to the public and from farms to the shops. An awful lot of the hauliers that use the roads in my constituency come from abroad. They often put in the fuel in France, deliver in this country and depart without having spent a penny. They do not necessarily get penalised on the price of fuel as my constituents do. I feel that there is a need to walk up to this important issue.
I want to ask the Minister a quite specific question. I was going to table it as a written question, but as I have the opportunity to look at him directly and ask it this afternoon, I shall do so. Will he tell us at the end of the debate what the true figures are annually for foreign road users? How many foreign cars and how many foreign trucks and lorries use the roads of this country each year? It is my contention that a contribution should be made by the foreign vehicles that use UK roads to pay for some of the upkeep, the need for which has been so well articulated in this debate.
After all, if someone goes to France on holiday with their family, they arrive in Calais or another port and before they have got terribly far along the motorway, they are stopped and charged quite a price for the privilege. When they arrive at their destination, they have paid for that privilege. I would suggest that if a family are going abroad, they will not stop going to France because they have to pay that cost. It is an accepted part of the travelling process. In Switzerland and other European countries, one is stopped at the border, they look at one's passport and, without hesitation, they stick a vignette on the windscreen. If one wishes to use their roads, it costs approximately £60 for the year. I hope that the Minister will tell us either this afternoon or very shortly afterwards the true figures for how many people use our roads, and how much money could be raised to maintain our road infrastructure from foreign vehicles visiting our country. I humbly suggest that if a family from France, Germany or Switzerland is spending £1,000 or £2,000 on a holiday in the United Kingdom, they would not be put off by having to pay a small contribution to use our roads for a year.
Mrs. Ellman:
May I draw the hon. Gentleman's attention to a section of the Committee's report that focuses specifically on hauliers who come from other parts of
Europe? We have recommended a charging scheme for hauliers, for which there seemed to be general support across the industry.
Christopher Fraser: I thank the hon. Lady. I am not here to make party political points, because I do not think that this issue needs to be party political. I accept what she says, I know what she is referring to, and I rather hope that the Government will walk up to this problem. The report articulates brilliantly some of the problems that have been mentioned in the debate, and I look forward to hearing the Minister's response.
In conclusion, there are fundamental problems, and there is a disproportionate responsibility on the British road user and taxpayer to deal with those problems. Our roads, alas, are not up to the usage of this day and age, which is a pity. [ Interruption. ] The hon. Member for Leicester, South (Sir Peter Soulsby) may not know about that, but he should come to Norfolk and see how bad our roads are, how many potholes there are and how long people have to wait to get into the county because of the lack of a decent road system. He might then accept the points that I am making out of genuine concern for the road user. People know that with the use of a vehicle comes responsibility and cost, but my constituents have for too long paid too much for too little.
6.12 pm
Mr. Robert Goodwill (Scarborough and Whitby) (Con): I thank the hon. Member for Liverpool, Riverside (Mrs. Ellman) for presenting her report. When I first arrived in the House, I served on the Transport Committee under the chairmanship of Gwyneth Dunwoody, and I know that the hon. Lady is carrying on her doughty work. I think that, to some extent, matters have moved on since the report was published, but I shall touch on that later.
I thank the hon. Member for Leicester, South (Sir Peter Soulsby) for his comments about the end of the "predict and provide" era, but there are other factors to take into account, particularly the point that my hon. Friend the Member for Kettering (Mr. Hollobone) made about the population increases in certain parts of the country. That issue needs to be addressed. The Conservative shadow Communities and Local Government team has announced plans to allow local authorities to keep the first six years' of council tax, plus a top-up, when new development takes place. Some of those funds could be used to build the schools and infrastructure needed to support such development. There are also quality of life issues to consider. For those living in congested town centres, a bypass can literally breathe fresh air into the community. Although I take the hon. Member for Leicester, South's point about reducing journey times and generating traffic, other issues need to be taken into account.
I am a little surprised that the Government have selected this subject for today's estimates day debate, because we had an opportunity to explore these issues only yesterday in Westminster Hall in a debate initiated by my hon. Friend the Member for Ribble Valley (Mr. Evans). I guess it is the nature of transport that we can wait weeks for a debate to come along and then two come together. [ Interruption. ] It gets worse. I am also surprised by the selection because the Government have a lamentable record on investing in roads and because
their flagship policies on urban congestion charging and road pricing lie in tatters in the face of public opposition. In fact, I would not be surprised if the Minister were to revise The Highway Code to exclude the road sign forbidding U-turns.
Mrs. Ellman: The hon. Gentleman might be interested to know that the decision to have this debate today was made not by the Government but by the Liaison Committee, which comprises the Chairs of all the Select Committees. Perhaps that it is another illustration of the importance of Select Committees.
Mr. Goodwill: And there was I thinking that the Whips organised everything in this place. I am heartened to hear that.
I suspect that the real reason why the Liaison Committee suggested this debate may be that, once again, we will not have an opportunity to discuss transport as part of the Finance Bill debate. That makes me very concerned about what further delights the Chancellor may have in store for the beleaguered motorist.
Motorists and other road users make a massive contribution to tax revenues. In the 2009 Budget, £26.6 billion was raised through fuel duties, an increase of £2 billion on the previous year. A total of £4.7 billion was raised through VAT on fuel, and £5.6 billion through VED. That was formerly known as the road fund licence but, as we know, it alone raises more than the Government spent on investing in roads last year.
Mr. Greg Knight: Has my hon. Friend seen last year's report by Professor David Newbery of Cambridge university, who looked into the question of taxation on fuel? Taking into account the environmental effect of motor cars, he concluded that fuel taxes are twice as high as they should be if fuel tax were to be viewed as an environmental tax. There is therefore absolutely no case for increasing the duty on fuel any further.
Mr. Goodwill: My right hon. Friend makes a very valid point. However, having just visited the US, where the price of petrol is low, I think one can see the effect of not having a realistic fuel price that takes into account the externalities that the hon. Member for Liverpool, Riverside pointed out.
Mr. Hollobone: My hon. Friend mentioned VED and the amount that it raises. Would it not be helpful if the Minister, at the close of this debate, were to give the House the up-to-date figures on the number of road users who do not pay VED but should, and on the number of uninsured drivers on our roads?
Mr. Goodwill: I hope that the Minister will refer to that. The hon. Member for Lewes (Norman Baker) said that he wanted to abolish VED, but I believe that the need to make sure that a vehicle is insured and MOT'd at least once a year helps to clamp down on uninsured vehicles. I hope that the Government-although perhaps it will fall to others-will do something to address the problem of cloned vehicles and the ease with which counterfeit number plates can be obtained.
The Royal Automobile Club has calculated that only a third of the £37 billion raised from vehicle taxation is spent on motorists. The figure for tax revenue does not include VAT on new vehicles or revenue accruing from servicing, repairs and parking. On top of that, of course,
the new showroom tax will come in in the new financial year, and that will levy up to £1,000 on the cost of some most polluting vehicles.
One could be forgiven for assuming that this Government included road investment in their massive splurge of spending, which was often funded by irresponsible borrowing, over the last few years, but the facts show that road investment has lost out. The following figures are based on real prices for 2007-08, and so allow for inflation. In the 10 years between 1987 and 1997, the average annual spend on road investment was £6.3 billion-and I do not need to tell the Minister who was running the country then-but in the 10 years between 1998 and 2008 the average was £4.3 billion. That represents a cut of a third in the money going into roads.
In fact, the peak year was 1992-93, when £6.89 billion was invested in roads. The lowest year was 1999-2000, when the figure was only £3.821 billion. So although the Government make big claims about all the money spent on transport, it certainly has not been spent on our country's road infrastructure. It is no wonder that congestion has continued to be a problem over the life of the Government. They failed not just to mend the roof when the sun was shining, but the driveway lost out, too.
Two flagship policies have foundered on the rocks of public opposition. First, the transport innovation fund was established in 2004 and promised generous funding for local transport projects if proposals were presented for local congestion charging. Some people have described that as bribing councils to introduce congestion charging. Of the 10 councils or groups of councils that expressed an interest, only Durham looks like delivering a scheme, at £2 a time. The final nail in the coffin was the referendum in December 2008, when 78.8 per cent. of voters in Manchester rejected congestion charging there, despite the fact that it had already cost £24.1 million to develop the scheme to that stage. That aborted congestion charging policy has still cost the taxpayer £41.7 million nationally. Secondly, the rebranded urban challenge fund will no longer include a requirement to introduce tolls. What an embarrassing and expensive U-turn by the Government.
We have heard from the Chair of the Transport Committee how the Government have backed away from their spy-in-the-sky road-charging scheme in the face of the 1.8 million people who signed on to the No. 10 website. That may possibly even merit an entry in "The Guinness Book of Records". The fact is that drivers did not trust the Government when they said they would reduce other types of taxation on drivers if a road-user charge was introduced. Drivers saw that as another stealth tax and another way to persecute the motorist. Now, of course, the Government have backtracked under pressure, but I am pleased that the Liberal Democrats have picked up that unpopular policy and are trying to run with it. I think they will get the same reaction from the electorate when they try to promote it, particularly as they take the irresponsible view that they can reduce investment in roads by 90 per cent. at the same time. That would have a devastating effect on our country's infrastructure and our ability to attract investment, jobs and all the other ways that the efficiency of a country's transport system can help the people who live there.
Norman Baker:
The hon. Gentleman is being uncharacteristically ill-informed. Let me make it clear that, first, we do not propose spy-in-the-sky technology.
Secondly, the cut would be made to the major roads budget, not to the roads budget, which is an entirely different matter. Thirdly, the entirety of the money that we propose to cut from the major roads budget would be reinvested in railways. Fourthly, the road pricing would be made revenue-neutral for the average motorist by abolishing VED and cutting fuel duty. That is quite a good package.
Mr. Goodwill: Well, time will tell. I should be obliged if the hon. Gentleman gave me a detailed run-down of those policies.
We welcome the scrapping of the scheme, but we worry that the Government may have thrown the baby out with the bathwater, given that the intention was to introduce a lorry road-user charging scheme. We are concerned about the uncompetitive situation that faces the British road haulage industry. The difference in diesel prices between the UK and the rest of the EU is marked, despite the fact that that has been addressed somewhat by the devaluation of sterling. In April 2009, the differential was about 10p in the nearest countries, but diesel was 26p cheaper on average in the 26 member states than in the UK. That has resulted in a very real problem for the British road haulage industry. In fact, when the vehicles entering the country through the ports and the tunnel were monitored, it was found that 81 per cent. of vehicles using those links were foreign trucks. That is a measure of the degree to which the British road haulage industry has had difficulty competing on this very unlevel playing field.
In 2001, when the price of fuel peaked, there were widespread demonstrations up and down the country-the fuel protests-and the then leader of the Conservative party, my right hon. Friend the Member for Richmond, Yorks (Mr. Hague), suggested a Brit disc-a vignette for which foreign trucks would have to pay. The Government of the day regarded that as being against European rules, but in the meantime countries such as Austria, the Czech Republic and Germany have introduced their own schemes for lorries, with Germany using a satellite-based scheme and the other two countries a tag and beacon scheme. As transit countries, they are able to regain the revenue from the trucks crossing their country, which often fill up outside their country.
It has been estimated by NERA Economic Consulting that the cost of foreign trucks running on British roads is £195 million in road wear, plus environmental costs of more than £35 million and costs of accidents of almost £33 million. We suggest introducing a lorry road user charging scheme in the UK-for all trucks, not just foreign ones, to meet the European rules-leading to a gain to the UK Treasury of about £400 million in fuel duty revenue that currently goes to other EU treasuries. In addition, we would gain the increase in tax, national insurance and corporation tax paid by UK haulage companies, which would benefit.
Norman Baker: Lorries would be caught by our proposed road pricing scheme, but as I explained, as part of the offsetting, we would cut fuel duty and reduce VED to the minimum under EU rules for lorries. Is the hon. Gentleman proposing offsetting savings for lorries in his scheme?
Mr. Goodwill: Yes, because the only way to incentivise people to fill up in the UK is, in effect, by making fuel cheaper in the UK than abroad. Measures would need to be introduced in conjunction with the lorry road user charging scheme to balance its cost with changes to VED or fuel duty revenue, and perhaps a rebate. For administration of the scheme, we already have arrangements whereby VAT is regained, so the administrative burden would not be so great. Varying fuel prices in different countries and exchange rates would have to be taken into account, of course.
I should make it clear that the system would apply only to lorries. We are not proposing a scheme that would apply to cars. Car drivers rightly feel that the roads in our country have already been paid for through the taxation that they have paid over the years. We do, however, feel that the model of the M6 tool and the Mersey gateway project, which is in the process of being planned and constructed, offers the way to attract private capital into improvements in our infrastructure. I believe that motorists would accept that, because they would be paying for something over and above what already exists. What they do not want to do, as the No. 10 website petition showed, is pay again for something that they have already paid for.
Mr. Hollobone: My hon. Friend mentioned foreign-registered vehicles other than lorries. Does he agree with me that there is a real problem in this country with the rules on MOTs and VED? Under EU rules, such vehicles are allowed on UK roads for up to six months, after which our domestic regulations must be complied with, but there is no effective way to enforce that.
Mr. Goodwill: My hon. Friend is absolutely right. I recently spent a day with the North Yorkshire police vehicle monitoring unit, which has the automatic numberplate detection system. We pulled up a Romanian car, but the officers told me that, by and large, they do not pull up foreign cars because even if the people inside can speak English, they pretend that they cannot. I do not believe that there is any mileage in trying to charge foreign cars to use our roads, not least because other countries might bring in reciprocal charges for British vehicles using their roads.
Finally, I shall say a word or two about the greening of our roads and vehicles. Yesterday, with the Minister for Business, Innovation and Skills and the hon. Member for Lewes (Norman Baker), I attended the launch by the Society of Motor Manufacturers and Traders of its report on CO2 emissions from vehicles. We were heartened to see that average emissions from vehicles sold last year had fallen to 149.5 grams per kilometre, a reduction of 5.4 grams. We are well on target for the 2012 target of 130 grams per kilometre. That is in marked contrast to the situation in the United States, whose equivalent of our industry agreement is the corporate average fuel economy agreement. The CAFE agreement calls for a 40 per cent. reduction by 2016, but if that target was met, it would mean only that vehicles were achieving 35 miles to the gallon. Since 1993, fuel taxation in the United States has been fixed for political reasons at 18.5 cents, not per litre but per US gallon.
The UK has the most expensive petrol and diesel in Europe. Motorists understand the environmental impact of their mode of travel, and the need to pay taxes and
charges that they judge to be fair. For many in rural areas there is no alternative to the car-or Land Rover, for that matter-so the potential for modal shift using the stick of taxation must be rural-proofed. I welcome moves by the Government to incentivise new green technologies such as electric vehicles by promoting places to plug in, and I hope they will address the flaws in the renewable transport fuel obligation certificates scheme.
As the Minister knows, the 20p per litre for green fuels-biodiesel and ethanol-is being phased out at the end of the current financial year. It was supposed to be replaced by a trading scheme, but because of the mistakes made in specifying which fuel was relevant, there is concern that the embryonic biofuels industry will be strangled at birth and will not be able to continue. I hope the Minister will consider how that can be addressed.
The real debate will start on Budget day and continue during the ensuing general election campaign. With flagship policies such as road charging and congestion schemes in tatters, people are asking where the vision and commitment are to provide green, convenient and cost-effective transport solutions for road users. The Government have run into the sand, run out of ideas and run out of money. We cannot go on like this. If the Government cannot change, voters will soon have the opportunity to vote for real change.
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