I beg to move, That the Bill be now read a Second time.
As the House knows, the reason for this Bill is to enable the introduction of a new levy for all heavy goods vehicles weighing 12 tonnes and over that are kept or used on the UK road network. We plan to implement the levy from April 2014 for UK-registered hauliers. Subject to the completion of a procurement process, it will apply to foreign-registered hauliers from the same date.
We intend the levy to apply to all categories of public roads in the UK and to both UK and foreign-registered HGVs. Vehicles that cause wear and tear to our roads should make a payment that takes that into account. HGVs registered abroad are more likely to carry their weight on fewer axles than UK-registered vehicles, which means that foreign-registered vehicles cause more wear and tear to our roads. It is therefore more unjust that they do not make a contribution towards the maintenance of these roads. They leave the burden to fall entirely on the British taxpayer.
I take the hon. Gentleman’s point. Under this Bill, we will at least charge them something to use British roads—at the moment, they pay absolutely nothing. Although I am not saying that this is the entire answer, we are moving in the right direction.
Foreign hauliers using roads in the UK have long enjoyed an advantage over our own haulage industry in that they do not pay to use the UK’s road network, while our own hauliers pay to use roads through tolls and other charging schemes when they travel abroad in Europe. For many years all main parties have wanted to introduce a measure to correct that imbalance and I am delighted that this Government are actually doing it.
I am sure that the House recognises that HGVs play a crucial role in our economy by supplying businesses and servicing customers. More than two thirds of all goods moved within the UK travel by road and, in the main, on HGVs.
The Secretary of State is right to pay tribute to the work done by HGVs in this country but, at a time when UK hauliers and other businesses that make deliveries are suffering economically, will he outline the rationale behind introducing the Bill now? What other things will the Government do to protect UK hauliers from additional costs?
The reason for introducing the Bill now is to try to level the playing field and to take action that the previous Government talked about but, I am afraid, never found the time to do anything about. I make no apologies for wanting to do this now. I wish it had been done sooner, but at least we are doing it at our first opportunity.
A key part of the movement of goods is provided by foreign hauliers and the Government recognise the important contributions they make to the economy. They make 1.5 million trips to the UK every each year, and we do not wish to discourage free trade with our partners in other countries. However, it is only right that we ensure that our own haulage industry has a fair chance to compete, and I hope that the Bill goes some way to achieving that. I met some hauliers when I announced the Bill and they said that it would lead to more jobs in this country.
As colleagues will be aware, any road user charge is subject to the strict conditions set out in the Eurovignette directive, which provides a framework for charging on roads and specifies the maximum daily charge as €11. That is likely to rise to €12 by 2014, which will mean that it should equate to the £10 a day that we intend to charge the largest vehicles that use our roads.
I also recognise that many trips made by foreign hauliers take longer than one day, so they will also be able to pay the levy for different periods, up to one year. In the case of the largest vehicles, this annual charge will be £1,000. Our estimate of the revenues that will be gained as a result of foreign hauliers paying a charge is between £19 million and £23 million a year. Although that is not enormous, it shows we are doing something that is clearly wanted. That is why the Bill is right. The Government are also committed to introducing other measures—principally vehicle excise duty reductions—that are not part of this Bill to ensure a fairer deal for HGV drivers.
I will now go through the Bill’s points of interest.
I have a question about something that I genuinely do not understand. The new levies will be welcome, but why will there be a delay, as I understand it—I may be wrong—between their imposition on UK hauliers, who will have to pay first, and on non-UK hauliers?
I very much hope that there will not be a delay. As I have said, I intend the levy to be introduced in April 2014, subject to certain procurement measures. Once it is introduced in this country, there will be a reduction of a similar amount in VED charges, so our lorry drivers should not pay anything extra. Foreign drivers will be charged from, I hope, April 2014. I hope that that addresses the hon. Gentleman’s question.
The Secretary of State is being extremely generous with his time. Will he clarify why overseas hauliers are not required to pay for a year up front, but can pay on a daily, weekly or monthly basis? Is there a legislative reason why they cannot be asked to make an annual up-front payment, as with VED?
Overseas hauliers will pay in advance of coming to this country. However, asking somebody who is bringing a lorry over for a day to pay for a full year would be quite unfair. We are therefore allowing them to pay daily, weekly or yearly. Most HGV drivers who come to this country regularly will find it much more convenient and a lot cheaper to pay for the year than to pay for each individual day. I hope that that clears up the hon. Gentleman’s point.
The Bill states that HGVs weighing more than 12 tonnes will have to pay a duty of excise levied by the Secretary of State if they are used or kept on a public road within the United Kingdom. It will be known as the HGV road user levy. It will be charged to allow both UK-registered and foreign-registered vehicles to use our roads. The levy applies to all roads in the UK. However, clause 3 provides the power for the Secretary of State to exempt specific roads from the charge by way of statutory instrument, should the need arise.
Clause 4 sets out the liability for the levy. For HGVs registered in the UK, liability for paying the levy will lie with those in whose name the vehicle is registered and with the person keeping the vehicle. That applies the principle used for vehicle excise duty in section 1 of the Vehicle Excise and Registration Act 1994. That allows for the levy on UK-registered vehicles to be paid at the same time as vehicle excise duty. For non-UK-registered HGVs, the person who holds the Community licence for the vehicle and the person who keeps the vehicle are liable to pay the levy. For both UK-registered and non-UK-registered vehicles, when two or more people are liable to pay the levy, they are jointly and severally liable.
Clauses 5 and 6 set out the methods of payment for UK-registered and non-UK-registered vehicles. For UK-registered vehicles, the levy will be paid either yearly or half-yearly at the same time as vehicle excise duty. Where appropriate, rebates may be made for vehicles that are stolen or destroyed. The circumstances under which a rebate will be available and the method of calculating the value of a rebate, together with other conditions that must be met to make a claim, are covered in clause 7.
Some types of rigid vehicle weighing less than 12 tonnes will be exempt from the charge. The Bill also provides powers to allow the Secretary of State to make regulations that exempt some categories of HGV from the charge.
Collection and enforcement of the charge, and related elements, are covered in clauses 9 to 16.
Before the Secretary of State continues, will he clarify one point? Again, I am happy to be corrected. I believe that the Bill sets out that different and potentially higher levels may be charged for weekly or monthly payments for non-UK HGVs. I am not against that. However, will he give a cast-iron guarantee that it does not infringe any anti-discrimination trade provisions within the EU?
Yes, we have covered that. The hon. Gentleman is obviously going to take part in this debate and may well find himself on the Public Bill Committee in due course, so he will be able to cover that point in much more detail. I am glad that the Committee is tempting and am sure that the Opposition Whip has made a note of his details. [Interruption.] Was the hon. Gentleman making a request to be on the Committee? Perhaps he would like to share it with the House.
We are grateful to the Secretary of State for trying to recruit our members of the Committee. Much as I would love to see my hon. Friend the Member for Ogmore (Huw Irranca-Davies) on it, I think that the Secretary of State should leave it to us and the Whips.
I apologise to the Opposition. I was going back to my old territory, which I must not trespass on any longer. I am glad that we have managed to smoke out the hon. Member for Ogmore (Huw Irranca-Davies) as to his willingness and availability. I am sure that he gives distinguished service to the other Committee. I must check which it is after this debate.
The level of vehicle excise duty evasion among UK hauliers is extremely low at less than 1% of vehicles. I have no reason to anticipate that that will change once the levy is introduced. To reduce the administrative burden, the levy will be paid at the same time as VED. We have looked at ways to make the introduction of the levy cost-neutral for UK hauliers. To do that, we will reduce the level of VED to take account of the new charge. That reduction will mean that an estimated 94% of UK hauliers will pay no more than they do at the moment and that 98% will pay no more than an additional £50 a year. Clause 15 allows the Secretary of State to refuse to issue a tax disc when the appropriate levy has not been paid. That will lead to vehicles being unlicensed, which brings the associated penalties of immobilisation, removal and disposal.
For foreign-registered hauliers, a system will be procured to allow the levy to be paid online before the vehicle enters the country. The levy is based on the length of time, so visiting hauliers will have to select the period for which they will be using UK roads. The options will go from a single day to a year. Once a haulier has paid the right fee, the payment record will be entered automatically into a database, allowing enforcement agencies to check the status of any HGV using UK roads. Information relating to whether a vehicle has paid the levy will be made available publicly.
There is a risk of foreign hauliers evading the new charge. We will ensure that the Vehicle and Operator Services Agency, which will enforce the charge in England, Wales and Scotland, and the Driver and Vehicle Agency, which will enforce the charge in Northern Ireland, are properly equipped to do the job from the start.
May I take this opportunity to invite the Secretary of State to join me on the Groceries Code Adjudicator Public Bill Committee at his earliest convenience? Does he foresee any problems in enforcing this wonderful measure owing to the Government’s decision to opt out of the EU directive on cross-border enforcement?
I am grateful to the hon. Gentleman for sharing with us which Committee he is sitting on. The Committee on this Bill will really miss his attention to detail. I have no reason to believe that there will be any of the problems that he mentions. I have assured myself that what we are doing is wholly within the law and within EU competition rules.
For non-UK hauliers, there will be no physical sign of the levy having been paid. I believe that paper discs or similar signs would impose a needless burden and open the door to fraud. One of the main methods that we will use to detect vehicles that have not paid the charge is by linking our automatic number plate recognition cameras to the payment database. The use of that technology will enable quicker checks to be made on all HGVs. The power to install such equipment where it does not exist is being introduced in the Bill by amending the Highways Act 1980, the Roads (Scotland) Act 1984 and the Roads (Northern Ireland) Order 1993 in clause 16.
Drivers will know that they have to pay the levy before they come into the country. If they fail to pay, the measures available to the enforcement agencies will be used. I make no apology for that. If they think that they will be here for three days, they should pay for three days.
Will the Secretary of State give way?
The driver is responsible for ensuring that the vehicle that he is driving is covered. He is in charge of the vehicle.
The penalty is currently set at £200 and would also be paid in situations where the levy had been underpaid—if someone had declared a lower vehicle weight limit, for example, or the wrong number of axles. Clause 13 inserts the offence in schedule 3 of the Road Traffic Offenders Act 1988, which lists the offences for which fixed penalties can be given.
Where there is frequent non-compliance by a specific vehicle or haulage company, clause 11 will allow for the imposition of a fine up to category 5 on the standard scale—currently £5,000—when someone is convicted of failing to pay the levy. I hope that those measures, coupled with active enforcement, will be seen as a suitable deterrent. Collected fine revenues will be paid into the Consolidated Fund; there was a lot of debate on that when we discussed the Ways and Means resolution.
I am sure the House will agree that by creating fair competition for the UK haulage industry, the Bill will help finally to put right a wrong. I commend the Bill to the House. It is well overdue and should have been introduced some time ago.
It is good to see the Secretary of State in his place for this Second Reading debate, and my hon. Friend the Member for Nottingham South (Lilian Greenwood) and I are delighted to see all three Conservative Ministers from the Department for Transport here this afternoon. By leaving a Liberal Democrat Minister in charge of the shop, the coalition Government have made a statement of their trust and confidence—or perhaps he has been given the afternoon off.
I am sure he would be under suspicion—no, I beg your pardon—I am sure he will be watched wherever he goes, because of the excellent job that he does as the senior and longest-serving Minister in the Department for Transport, having survived from 2010. I welcome his new colleagues to their places.
The Secretary of State took something like 18 minutes to move the Second Reading, which is par for the course. According to Hansard from 23 October 2012, column 861, the Under-Secretary, the hon. Member for Lewes, took a minute to move the Ways and Means motion—it actually felt like a lot less than a minute, but he was just procedurally introducing that debate.
The Secretary of State graciously said that both main parties have wanted to introduce this legislation, and I am sure he is aware that in my speech on the Ways and Means motion, I commended the coalition Government for finding a way to introduce this welcome measure.
I do not want to detain the House too long, because I spoke for 18 minutes during the debate on the Ways and Means motion—that was my Second Reading speech and is contained in columns 861 to 865 of Hansard from 23 October 2012, should anybody wish to look at it. We covered a lot during that debate, including road exemptions that the Secretary of State is implementing in clause 3(2). We covered hypothecation at length, and I am sure we will return to that in Committee. We spent a bit of time on road safety—particularly cycle safety—and whether the money raised from the scheme could be devoted to that. We also raised the Secretary of State’s discretion in clause 7(9), and asked questions about short sea shipping and moving freight from road to rail—we will continue to ask about that. We asked questions about the contract for running the scheme, the technology involved, and who is making the arrangements. Cross-border enforcement, which my hon. Friend the Member for Ogmore (Huw Irranca-Davies) raised a moment ago, was also part of the discussion.
A number of issues were raised during that debate. The Under-Secretary of State for Transport, the hon. Member for Wimbledon (Stephen Hammond) answered most of those points, although some were left without a response on the basis that they were detailed matters. I am sure we will look at those in Committee. In principle, however, the Opposition support this measure. We will want to look at the detail when the Bill goes to Committee, but we welcome its arrival in the House this afternoon.
As has been suggested, this Bill has wide cross-party support. I want to make a number of observations on the legislation, and commend the coalition Government for getting a grip on this matter and providing an answer. As the Secretary of State suggested, they are trying to create a level playing field between UK haulage businesses and foreign operators. My constituency is within the M25 and has close links with the M3, M4 and Heathrow airport, and transportation and logistics are at the heart of what we do in Spelthorne. As the Member representing that constituency, I am particularly gratified to commend the Bill and recommend that it proceeds. Several haulage firms in Spelthorne have made representation to me, including Cummins haulage in Shepperton and others, and they will be gratified by this measure. I am pleased to recommend and support the Bill in the House today.
The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) was right to suggest that we will have to consider a number of details in Committee. For now, however, I am happy to lend my support to the Bill, and gratified to see such wide support across the House for this sensible measure.
I, too, support this Bill, which is about backing the UK haulage industry and helping to create a level playing field. The impact of the freight industry on the UK economy is strong—the turnover for road freight is £23.9 billion a year; it adds gross value of £10.7 billion a year; and employs 299,000 people in 30,000 enterprises. The sector is important and its impact on the economy is great. The issue concerns disparities in cost between UK-based hauliers and foreign hauliers, and relates to differential fuel and road charging costs, as well as what are often seen as different safety standards, which also impact on cost. The legislation also deals with cabotage, which is the subject of ongoing European Union negotiations. The Transport Committee has taken up this matter—indeed, it first considered it a long time ago in 2009 when we looked at road charges and taxation. The issue was taken up again in 2012, and we returned to it this July with a session of the Transport Committee on road freight.
In 2008, the Government started to take action and proposed a vignette. Much to the Committee’s regret, however, that was not pursued and no real action was taken. An alternative to taking action on charges was the allocation of an additional £24 million to the Vehicle and Operator Services Agency to enforce safety standards for foreign—and domestic—vehicles. Something was done, although it was not the action for which the Committee was hoping.
I have one or two points that I hope can be considered today or—perhaps more likely—in Committee. Will the impact of this legislation and the cost for UK hauliers be monitored? We heard in the Transport Committee, and the Secretary of State repeated today, that the overwhelming majority of British hauliers will not face any extra costs. Will that be monitored to ensure that that intention is realised? Will the agencies charged with implementing and enforcing the scheme—DVLA and VOSA respectively—have sufficient resources to do their job properly? Will debts of overseas hauliers be collected, in view of the Government’s decision not to sign a cross-border agreement on enforcing debt? What is the current position on cabotage, which I know is giving some concern to UK hauliers? Those points are important although I know they will be discussed in Committee. I support this Bill, and agree with the Secretary of State that it has been a long time coming.
I draw the attention of the House to my entry in the Register of Members’ Financial Interests.
I welcome the cross-party support for this Bill which, as the Secretary of State pointed out, has been under discussion for many years. However, if we look at the background to this issue, it is interesting that more than a decade ago, the previous Government looked at a scheme that aimed to restore fairness between UK and foreign lorry drivers. The consultation document published in November 2001 considered two forms of charge—a time-based system and a distance-based system. The former was a cheap and simple solution, and the latter was a complex-to-administer, Big Brother-type charge, which sought to raise yet more revenue from the UK haulage industry. True to form, the Chancellor of the Exchequer at the time, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), went for the latter.
More than 10 years later, after much indecision and delay, the coalition Government are finally delivering a workable scheme. Had the previous Government taken note of the Conservative party economic competitive policy group in 2007, which recommended the swift introduction of a lorry user charge, balanced by a reduction in vehicle excise duty, the problem could have been resolved far sooner. We could also have protected our domestic haulage industry from unfair competition earlier, and raised hundreds of millions of pounds for the Exchequer from foreign hauliers. I congratulate the Government on introducing this long-overdue, important legislation.
I note from the consultation document that a large HGV currently pays between €35 and €46 for a 100-mile Autobahn journey in Germany. That highlights the disadvantages that UK hauliers face against European competition—European HGVs currently make no contribution whatever when they travel on UK roads. The proposals have been welcomed by the haulage industry, which was rightly in favour of the time charge rather than the distance charge. As I have pointed out, the distance charge would have become a stealth tax. The Freight Transport Association says that the Bill delivers on its requests that the scheme should be fair, that it should not add administrative burdens, and that it should come with heavy penalties for non-compliance.
Clause 3 makes an exception so that the congestion charge zone and the M6 toll can be charged as well as the levy—they are congestion measures. Any future toll roads to be built in the UK are highly likely to be classed as congestion measures, so can the Minister confirm that EU prohibitions on double-charging will not prove to be a problem should any new toll roads be proposed in future in the UK?
Clauses 5 and 6 relate to the rate at which the levy will be set, which is governed by an EU directive. As pointed out by the Secretary of State, the daily maximum was originally set at €11, but is set to increase to €12. That will mean that the daily rate is low compared with the sums that UK hauliers pay to use toll roads in other European countries. Perhaps the Secretary of State or the Minister will confirm whether there is any scope for the UK Government to request an increase in the rate, especially if other European countries increase their toll rates significantly ahead of inflation, which will further damage our competitiveness.
It is estimated that the levy will raise around £20 million per annum. Clause 9(4) states that the revenue from the levy will go into the Consolidated Fund. Will the Minister confirm that the revenue raised will not be hypothecated for transport?
Clause 13 establishes an efficient and effective way of enforcing payment on foreign lorries that fail to comply with legislation, as does clause 15, which allows the Secretary of State to refuse to issue a vehicle excise duty licence for which a levy has not been paid. Those measures underline the effectiveness and simplicity of the legislation.
Clause 16 allows highway authorities to install equipment for the detection of non-payment of the levy. Will the Minister confirm what equipment exists that can be used for the purpose of detecting non-compliance, and what new equipment will be requested? I understand that the set-up costs are estimated at between £3 million and £6.7 million. Will he also confirm the prosecution procedure if a foreign lorry that has not paid the levy is detected by a system other than a roadside check? How will the prosecution be enforced?
To sum up, the Bill has been a long time coming. It is another example of this Government delivering on things the previous one only ever talked about. It makes a more level playing field between UK hauliers and European hauliers, who for many years have made no contribution whatever to the UK road infrastructure and have cost the UK economy a huge amount of money owing to the accidents they cause on our motorways. The Bill will help to ensure that our domestic road haulage industry remains competitive, which is more important than ever.
I am pleased to make a declaration: I have no interests apart from looking after the interests of my constituents. Hon. Members have said that it is time to level the playing field for road haulage in the UK, but to use more thematically correct imagery, it is time to smooth out the anti-competitive bumps faced by UK haulage companies on the road to European markets.
The Bill will not deal with many anti-competitive burdens placed on the many road haulage companies in my constituency and many others. Grangemouth, which is in my constituency, and which is the only EU-recognised inter-modal transport hub in Scotland, and the many communities along the M9, M8 and M876 triangle with employment in road haulage suffer from damaging high taxation on road fuel. Competitor haulage companies from mainland Europe use that fuel price advantage to collect and deliver in the UK, even in Scotland. The Government must look at that seriously if we are really to level out those bumps.
I know hon. Members want to get on with the debate quickly and that they have discussed the Bill between one another many times, but my constituents probably do not know the Bill’s contents. They know that, currently, operators of UK-registered heavy goods vehicles pay charges or tolls in most European countries—as they tell me every time I meet them—but that foreign-registered HGVs do not pay to use the UK road network. The imbalance is unfair to UK HGV operators.
The Bill will seek to address that by introducing a levy for using UK road networks for all HGV vehicles weighing 12 tonnes and over. The requirement to pay the levy will apply to all categories of public road in the UK and to both UK and foreign-registered HGVs. The levy will range from £85 a year for the smallest HGV to £1,000 for the largest. The idea is to link the charge to the amount of damage caused on the roads by different types of HGVs.
The Bill states that UK-registered HGVs will pay the levy for the same period and in the same transaction that they pay vehicle excise duty, which means that they will pay annually. However, foreign-registered vehicles can pay the levy daily, weekly, monthly or annually, which strikes me as an imbalance, because road haulage companies do not have their vehicles on the road all the time. If paying only when they are on the roads is good enough for foreign vehicles, why should that not be so for UK vehicles?
The Bill states that there will be an associated reduction for UK-registered HGVs in the amount of vehicle excise duty that is payable. That is intended to mean that the vast majority of UK-based hauliers will pay no more than they pay currently. However, if 10 million vehicles use the road and pay the levy, and suddenly 15 million or 20 million start to use the roads, why should the 10 million not pay less than they paid previously? Is this just another way for the Government to make money for the Exchequer, and not a way to advantage current road users?
The intention is that UK hauliers should not pay more, but one of my concerns is that there is no guarantee of that. Some of the numbers I have seen suggest that some UK hauliers will end up paying more. That hardly seems like smoothing out the bumps—quite the reverse.
I do not know whether my hon. Friend is looking over my shoulder from a distance, but I was about to express that exact concern. The Government have failed to devise a scheme that protects all UK-based hauliers, because EU rules mean that vehicle excise duty cannot be set low enough to compensate all Britain’s HGV users.
I have a number of other concerns, which I am sure will be addressed in Committee. The Bill states that no British road haulier will be worse off as a result of the reform, but I would like to see detailed figures on how much the Government expect to raise from the exercise and on how it will be disbursed. Could some of the money be disbursed to keep vehicle licence duty down for UK heavy goods vehicles? Clearly, the Government need to look at whether they can reduce vehicle excise duty in some way.
Why are UK hauliers set to pay the levy one year before non-UK hauliers?
The Secretary of State confirmed that this afternoon in his opening remarks, and I confirmed that in the Ways and Means debate on 23 October. The only possibility of that not happening would be if there is a minor delay to the procurement of the database, but the reality is that we have moved it so that there will be simultaneous introduction.
I congratulate the Opposition Front Bench on winning that battle before it has even begun. That was a cause for concern for the Opposition, so I am pleased if that has now been swept away by their good offices and oration. It was an issue only a few days ago.
Will the Minister look again at whether there is a way to enable UK-based drivers to have the same options for payment as non-UK-based drivers? I made this point earlier. Why should it be that those not based in the UK will pay weekly, monthly or daily, but UK owners will pay every day, whether they run a vehicle or not? That seems to be somewhat strange.
Returning to the question of how to police the Bill, I have serious concerns. How does the UK guarantee collection of the fines—a point I made to the Minister? He indicated that it would be the driver who would be responsible. The reality is that the driver will be changed the next time the vehicle is sent into the country. The driver could be changed again, again and again. We are talking about a massive permutation of drivers. I have been attached to the police scheme twice in this place and have spent time with the Serious Organised Crime Agency. One difficulty we have is that people come into the country with the deliberate intention of stealing. They are brought to court, bailed and then disappear—they never come back to the country. Someone else will turn up in that or a similar vehicle to steal once again.
Is the Minister trying to tell us that they will be able to catch the driver, and that the next time the vehicle comes into the country it will not have a different driver? It is all right when there is a family car, and either the Minister or the Minister’s wife could have been driving the car when they were fined, as happened in the case involving a former member of the coalition Government, but it is not the same with a heavy goods vehicle. The owner can change the driver every single day, so why is it not the owner of the vehicle who gets fined? The fine would not be able to be avoided then.
My hon. Friend must have unbelievable eyesight, because I am just about to come on to that very point. It is clear that some Government Members argue that we should extract ourselves from arrangements such as the European arrest warrant. In reality, however, whether it is the vehicle owner or even the driver it may be that we have to extract the person, who is a criminal if they are breaking the law, from another country by using the European arrest warrant. If we withdraw from the European arrest warrant agreement, how will we pursue such people among the 500 million people who live in the EU?
In the same way that I am pursuing the idea of looking at the supply chain so that human trafficking and modern day slavery can be eradicated by looking at the companies who eventually get the goods, I also think that the owner of the vehicle should discipline and instruct their employees to ensure that they do not break the law. There has to be some way of dealing with this so that we can pursue the vehicles. We have a major problem if we stick with the driver.
I will not take another intervention—people want to get on to other business today. These matters must be discussed in some detail in Committee. If we have a situation where there is no European framework through which we can arrest people—the European arrest warrant—then the Bill will come to naught.
I thank my hon. Friend for being gracious in giving way. I want, through him, to give the Minister the opportunity to answer the question I asked in the Ways and Means debate, the same question the Secretary of State perhaps misunderstood and answered, when I raised it earlier, by referring to European trade rules. I hope that the Minister, in his response to my hon. Friend’s very good point, will be able to clarify what will happen now that we do not have cross-border enforcement, because the Government have opted out of it.
There will be a lot of things that, if the Government opt out of them, will collapse around our ears. I hope, in making these points, that I am providing positive criticism, because I would like to see the Bill emerge in a perfect form, or as perfect as it can possibly be. I welcome the Bill in principle, and hauliers in my constituency welcome the idea behind it, but we must make sure that it comes out of Committee in a form so that it will do what is intended to do, and is not just a precursor to road pricing for everyone in the UK.
Like hon. Members on both sides of the House, I congratulate the Government on introducing the Bill. In particular, I congratulate my hon. Friend the Member for Hemel Hempstead (Mike Penning) who, as roads Minister, met with me and listened to the complaints of my constituents regarding the previous charging scheme. My hon. Friend the Member for North West Leicestershire (Andrew Bridgen) made a good point about the Conservative policy group’s proposal in 2007, which set out a scheme similar to the one in the Bill, to introduce HGV road charging. It is a shame that that scheme was not looked at more seriously by the Government of the day, and that more progress was not made. This Government should be congratulated, because a view was expressed that it would not be possible, under EU law, to introduce a charging scheme, but the Bill demonstrates that it is possible.
Most hon. Members have made the point about fairness—fairness to the UK haulage industry and fairness to the UK taxpayer. It is not fair when large HGVs can fill up with cheap fuel in Europe—typically, in somewhere such as Luxembourg—and make an entire tour of the UK before returning home having made no direct financial contribution to the UK at all. They are not buying fuel, and they are not paying any other charges or tolls here. Typically, our lorry drivers have to do that when they visit the European continent, so it is fair that the measure is put in place to redress the balance.
The issue is of keen interest to my constituents. As the Member for Folkestone and Hythe—I am looking at the hon. Member for Strangford (Jim Shannon), who is in his place—I am probably the MP with the closest thing to a land border with the continent of Europe and the EU, as the channel tunnel is in my constituency. The idea of enforcing this measure and these charges across jurisdictions is particularly important, both here and for hauliers operating from outside the United Kingdom. My constituents feel particularly strongly because of our proximity to the port of Dover, and because of the presence of the channel tunnel. We see the costs of the road haulage system on our roads and infrastructure as well. It is a concern that financial compensation is not extracted from foreign hauliers for the road network that they use so freely.
Does the hon. Gentleman agree that it is not just a matter of the wear and tear that overseas hauliers have on our road infrastructure, but that they also cost British hauliers money by congesting the roads? That means that our British hauliers are more inefficient when driving on our roads, because of the added congestion. That is costing our drivers more money in fuel.
The hon. Gentleman’s point underlines how important it is to have a system that creates a level playing field of charging. One set of hauliers who are not paying UK vehicle excise duty get a free rein, while UK hauliers pay for the impact on the infrastructure that they use in common.
There are other issues that make this particularly important. I want to touch on an issue common in areas with ports that service the UK and the continent of Europe. In my constituency, when the port is closed, owing to bad weather or—typically with the Dover-Calais link—industrial action in the port of Calais, Operation Stack comes into action. This means that lorries are stack parked on the motorway, normally closing the coast-bound carriageway of the M20 at different stages. This is very expensive to enforce for Kent police and adds to wear and damage not only on the motorway network but on the roads surrounding it. It is not unusual to see lorries parked on minor roads and roundabouts and in lay-bys, often creating mess and causing damage.
One reason my constituents have pressed for these measures is that there should be some means of extracting payment through a charging scheme and—I hope—through the measures in the Bill to create a register of hauliers licensed to use our roads, which will be published on the internet. That way we will know who these lorries are owned by and where they are coming from, and it might make it easier to enforce other charges, not just the charge for taking out the vignette to use the UK motorway network. I would like more action taken to follow up lorries that cause damage on the roadsides, that litter and that might be associated with other accidents or problems caused while they are here. Creating this database and register of foreign hauliers using our roads will be a good first step towards taking such action.
I do not share all the concerns raised by the hon. Member for Linlithgow and East Falkirk (Michael Connarty). The important thing is that there is a system of fining, and that the fines are enforced. Hauliers that come here frequently and are fined frequently will soon realise that they would be better off taking out the vignette in the first place. If action has to be taken against the lorry driver while they are in the country, and if their progress is delayed, it will often have considerable financial consequences for the hauliers, which operate on a tight schedule while completing their tours. They will not want to be delayed. If lorries are clamped or taken off the roads while the driver waits for someone to pay the fine, that, too, will have financial consequences for the haulier. The important thing, then, is that the charging scheme is in place, that it is enforced equally and that foreign hauliers are made to pay the charge for using the road or receive a financial penalty for not doing so, either directly or indirectly, through the lorries being clamped or taken off the road.
I mentioned earlier the cost of Operation Stack. I am sure that all colleagues will have a view of what the Government could do with the money raised from this charging scheme. Earlier in the debate, the Secretary of State estimated that it would be between £19 million and £23 million a year. I hope that the Government will be mindful of some of the pinch-points in the motorway network, particularly where the cost from the haulage industry—the impact on the roads and the infrastructure —is particularly great. That can be seen in Kent with Operation Stack, especially in the winter months, when the effects are extremely acute. Let us consider whether some of the funds raised could be given, on a discretionary basis, to alleviate some of the damage and problems caused by the haulage operating on some of these major pinch-points, particularly the one running through Kent in my constituency.
I congratulate and thank the Government for bringing forward a Bill that introduces the level playing field that we want and introduces fairness not only for the UK haulage industry but for the UK taxpayer.
As the Member for Strangford in Northern Ireland, I know the importance of a viable freight industry that can deliver all the products we have. The UK freight industry has supported the principles in the Bill for the past few years, and there is a consensus in favour of the Bill. Members on both sides of the House are of that opinion, and the freight industry is telling us the same thing as well. The industry is vital to Northern Ireland and my constituency in particular. Some hon. Members, their families and their constituents will enjoy the vegetables and potatoes that come from my constituency, because 70% of our food is exported to the rest of the United Kingdom. So when Members sit down to the humble Comber spud on Sundays, quite possibly it has come from my constituency. It is important, therefore, to have a viable freight industry.
I have a couple of quick questions. The Bill makes it explicit that the vehicle excise duty will be the means by which the rebate will be made. Can the Minister give us the precise reductions in the duty that could bring that about? I rather think that they will not be known until the Budget statement of 2014, when they will be included in the Finance Bill. The levy is to be introduced for UK operators from May 2014, but the process must be operational in time for the vehicle excise duty renewals. Will he assure us of that time scale? It is vital for the industry.
Figures released by the Department indicate that about 6,500 vehicles fall into bands for which vehicle excise duty rates are already too low to offset the cost of the levy. I understand that half of these vehicles—about 3,250—are 28-tonne 2x2 articulated vehicles. Will the Minister indicate, either today or later, the breakdown of operators using vehicles requiring a higher net charge than at present? In particular, where do they operate from? Are they one-man bands or small companies that need a bit of help? It would help if consideration could be given to that. It is unclear whether the 2% of vehicles identified in the money resolution debate as facing significant extra charges as a result of the change are to be found largely in a particular sector or sub-class of vehicle.
It is important that the Minister considers another matter. Businesses need to plan ahead and have some indication of what the costs will be for the future. That is particularly important, as down-plating might not be possible for some operations.
I would like to focus on one final point touched on by the hon. Member for Folkestone and Hythe (Damian Collins). I would like the Minister to clarify a few points for Northern Ireland Members in particular—given that we have a land border—about how this will affect us. How will the charging work in Northern Ireland across the land border with the Republic of Ireland? I ask because I understand that the Irish Government have already begun discussions with Ministers about the amount of cross-border trade. If that is the case, could Irish vehicles be regarded as a special case? It would be useful for Northern Ireland MPs and the House as a whole to know whether the UK Government are minded to permit this exemption. Finally, how will holders of reduced pollution certificates be compensated through replacement grants?
We are moving to a better place with this Bill. We have a chance to do something that is important for the freight industry in the area I represent and the many companies that depend on it. It is also important for the produce that is moved from Northern Ireland to the rest of the United Kingdom and the Republic. The Bill will have an important impact on those industries. I want to see the Bill go through and the benefits that come from it. I understand that I will not be on the Committee, but others will, and I will keep a watchful eye on it.
I am grateful for the opportunity to make a further short contribution to this debate, following the Ways and Means debate on 23 October. I will not detain the House by repeating all the points I made then, but I want to put on the record my support for the Bill on Second Reading, and add my congratulations and thanks to the Government for bringing it in. It is a long, long overdue measure.
My interest in this subject stems partly from my membership of the Select Committee on Transport—the hon. Member for Liverpool, Riverside (Mrs Ellman) set out in detail why we have taken an interest—but I also have a constituency interest. Milton Keynes is home to many hauliers and large logistics and distribution companies. The hon. Member for Strangford (Jim Shannon) mentioned that most potatoes in the country come from his constituency. At the top end of the scale in my constituency we have the national distribution centre for John Lewis, so if Members buy their Christmas gifts from John Lewis—other department stores are available—the goods will very likely start their journey in my constituency. I paid a visit to those at the John Lewis distribution centre a couple of weeks ago and asked their opinion on the Bill. They told me: “Our view is that the Bill is a positive step, because it is helping to address the unfair balance of foreign trucks coming into the country with lower diesel costs. In that regard it is very welcome.” I believe that is the typical view of the haulage industry.
I want to use a little example to flesh out the reasons why UK hauliers are currently at a competitive disadvantage. The point has been well made that fuel prices on the continent are lower than in the UK. As of last month, the average UK diesel price after adjustments was around €1.72 a litre. That contrasts with €1.37 in Belgium, €1.35 in France, €1.30 in Luxembourg and €1.44 in the Netherlands, so foreign hauliers coming to this country stand to make a gain of 20-odd per cent. When fuel represents up to 40% of the operating costs of an HGV, that makes a critical difference to the operating margin for many haulage companies. I have had many representations from hauliers, as I am sure other Members have, about the disadvantage they face, not only from international competition, but from cabotage, whereby trucks fill up overseas and can then cherry-pick short-haul domestic journeys in this country. That can create huge employment uncertainty for HGV drivers in this country, which is a problem that I do not think has been mentioned in the debate thus far. I have had representations from constituents who have been HGV drivers for many years who have found it more and more difficult to get long-term permanent jobs because of the competition from overseas lorries. This measure will go a long way to creating some certainty and security in that employment market.
I will not detain the House any longer—I do not want just to go over all the points I made in the Ways and Means debate. I support the Bill and wish it a speedy passage today and in Committee, and I look forward to it becoming law sooner rather than later.
This is indeed a great day for UK business and for small and medium-sized enterprises. Combined with the Groceries Code Adjudicator Bill yesterday, today’s Bill represents a stamping of this coalition Government’s commitment to small and medium-sized enterprises and to solving some of the problems they face. That goes not only for small and medium-sized enterprises, but for our consumers and constituents, who pay for the costs and the bureaucracy that are built into business. Anything we can do to solve some of those problems will be of benefit to them.
I want to take a few moments to seek clarification on one or two points. I am sure some of them will be thrashed out in Committee, but I will start by being a little pedantic. Can the Minister say how he will define “a day”? Is it 24 hours from the point of entry into the country, or is it a Monday, a Tuesday, a Wednesday, and so on? When does “a day” begin? Does it begin when someone has cleared customs, when they leave the port or when they exit the ferry? If someone is caught in a road traffic accident or in a queue caused by one and they miss the deadline by five minutes, the definition could become quite an issue. I hope that ANPR technology will assist the authorities in ensuring that people are registered and are paying the levies. I hope that the Minister will confirm that ANPR will be installed in all our ports and at all entrances to the country.
My hon. Friend makes an important point. Does he agree that consideration would need to be given to lorries that get caught up in Operation Stack, which I mentioned in my speech? Sometimes lorries may be held for two or three days when they are only a few hours away from the port.
Absolutely; I acknowledge that point, which is particularly applicable in my hon. Friend’s constituency, where the driver, for reasons beyond his control, may find himself missing the deadlines. Indeed, that point is vital, because if the police are to have access to ANPR data, those data need to be live and in real time, because any vehicle might be complying with the levy at that moment, but not in half an hour’s time. I hope that those data will be live and available.
We have heard quite a bit about enforcement today, and about whether it should apply to the driver or the owner. I want to caution the Minister to ensure that it will not involve the owner. The identity of the owner could be the source of some debate. It could be a leasing company, or a hire company. It could well be someone who is not connected to the way in which the vehicle is being operated. I hope that that point will be clarified.
Finally, will impounding be used as the ultimate sanction to ensure that these vehicles do not continue to move? That could give rise to issues if the goods on the vehicle were perishable or, even worse, if the vehicle were carrying livestock. How would we deal with impounding an articulated lorry full of bees, for example, or sheep or pigs? We need to think those issues through.
Broadly, however, I welcome the Bill. It represents a great step forward in levelling the playing field and assisting the hard-working HGV companies in the UK. The Minister and his Department are to be congratulated on it.
I will not detain the House for long, as there is further business that we want to get to. I want to add my voice to those who have paid tribute to the Government for introducing the Bill. It is long overdue and very welcome. I am also pleased to see that it has gained cross-party support.
My constituency has a large number of haulage contractors because we have a lot of quarries. Those contractors run many wagons up and down the country, and the Bill will help and support them. They move the finest limestone in the world to various parts of the country. My hon. Friend the Member for Milton Keynes South (Iain Stewart) mentioned John Lewis products being in everyone’s Christmas bags this year. I dare say that most hon. Members’ houses contain a little piece of High Peak limestone somewhere.
Those hauliers have been operating under more and more pressure as a result of foreign hauliers coming into the country. They use our roads, which results in wear and tear. We hear the thunder of wagons trundling down the roads in the High Peak day and night, and many of those wagons come from abroad. There has been much talk about levelling the playing field to give our own hauliers the competitive edge that they need. I believe that the Bill will achieve that, and I applaud it.
When our hauliers go abroad, they pay tolls and user charges on foreign motorways such as the autoroutes in France, the autostrade in Italy and the autopistas in Spain. Our hauliers pay to help with their upkeep. I am not wont to quote anything European, but when European HGVs come here, the French pay rien, the Italians pay niente and the Spanish pay nada—that is, nothing. The Bill will address that issue. As we have already heard, foreign haulage contractors also use cheaper fuel.
This is a great Bill, so let us speed it through. Let us give our hauliers and the wagon drivers they employ a level playing field. I used to supply haulage companies with machinery, and I know that other people’s jobs rely on those companies. They include mechanics, suppliers and those in the oil industry. The Bill is a great thing for British hauliers and the British economy, and, together with the Groceries Code Adjudicator Bill that we debated yesterday, it shows that this Government are serious about helping small and medium-sized enterprises up and down the country. They are not just talking about it; they are actually doing it. I commend the Bill to the House.
As my right hon. Friend Secretary of State for Transport said in his opening speech, the intent of the Bill is absolutely clear. It will help to deliver a fairer deal for UK hauliers, going some way to correct an inequality that has existed for too long.
On 23 October this year, we held an extensive Ways and Means debate, and I was urged to make a contribution that owed more to quantity than quality. Today, I have been urged to make my speech one of quality rather than quantity, and I will obey that stricture. I should like to thank the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) for the points he raised today and during the Ways and Means debate. He rightly said that the Bill was to be welcomed. I tried in the previous debate to answer some of his questions, and I shall try again to deal with points that he has raised, along with those raised by the hon. Members for Stoke-on-Trent South (Robert Flello), for Ogmore (Huw Irranca-Davies) and for Liverpool, Riverside (Mrs Ellman).
Vehicle excise duty rates will be published in the draft Finance Bill towards the end of 2013, so they will be known well before the start of the levy. There has been a great deal of discussion about enforcement today, and about whether opting out of cross-border enforcement arrangements would hamper enforcement. Let me make it clear that the cross-border enforcement directive is only about data exchange. As we said in the Ways and Means debate, and as my right hon. Friend said earlier today, there is therefore no question of enforcement being hindered by our not being involved in the directive. Outstanding fines and penalties can be pursued even if they are not in the directive.
Questions were raised about who is paying the fine. My right hon. Friend the Secretary of State was exactly right: it is the driver, but the registered vehicle keeper is jointly liable, so VOSA—the Vehicle and Operator Services Agency—or the Driver and Vehicle Agency can act against both, including by impounding vehicles and by taking drivers and operators to court. Drivers without a satisfactory UK address will be required to pay a financial penalty deposit on the spot by a VOSA enforcement officer. This enforcement strategy is designed to overcome the problem, raised by several Opposition Members, of foreign drivers fleeing back to their own country and out of UK jurisdiction. The question of enforcement has been well dealt with, and there is always the option of a prosecution in the magistrates court for the offence, as set out in clause 11.
Questions have been raised about what would happen if the load was seized and how much of it could be seized. The Bill makes it fairly clear that the whole load is seized. I will consider the point of my hon. Friend the Member for Sherwood (Mr Spencer) about a lorry that might be carrying bees, locusts or whatever else, and about what needs to be done at that stage. Let us none the less be clear: the Bill contains the power to seize the load.
As I said in the Ways and Means debate, the Welsh Government were seeking a legislative consent motion at that stage. Since then, after further discussions with departmental officials, they decided that they did not need to do this. Scotland and Northern Ireland had already said that. Let us be clear that the HGV levy is a tax, so it is a reserved matter, but we have no intention of limiting the power of any of the devolved Administrations to introduce charging if they so wish at some future date, and the Bill allows for geographic coverage of the HGV road user levy to be amended by order to allow this, if necessary.
The hon. Member for Strangford (Jim Shannon) asked about Northern Ireland. As I said in the Ways and Means debate, Ireland already has road charges in the form of tolls. The new UK charge applying in Northern Ireland is about the same as existing Irish tolls, so this would be relevant to a round trip from Belfast to Dublin and back again. It would be difficult to exempt Northern Ireland, because the Government are introducing this by means of reducing VED. If the hon. Gentleman wishes, I am sure we can explore the issue further in Committee.
To return to the main aims of the Bill and the key point about the level of charge, we consider our plan to charge large vehicles £10 a day or £1,000 a year to be fair, proportionate and compliant with relevant EU legislation. For the daily amount, we are seeking to charge the highest level permissible while remaining compliant with EU law.
Does the Minister agree that it might be worth the Department going away and looking again to see if there are perhaps more creative ways of raising that amount? As Government Members themselves have said, a driver from the UK going across the channel and perhaps using an Autobahn or paying a toll in Germany might end up paying a great deal more than £10 a day.
I will look at that again, but I can tell the hon. Gentleman that we have already looked at it in some detail. The clear requirement is to ensure that the Bill remains compliant with EU regulations and law about the vignette; at that level of charge, it does.
Several hon. Members, including the hon. Member for Stoke-on-Trent South, asked how many UK hauliers would not be better off. I can tell him that 94% of UK hauliers will pay no more than they pay now, and 98% will pay no more than £50. There are effectively two classes of vehicle for which there may be small problems. First, there are the conventional HGVs—either articulated or rigid vehicles without a trailer. For them—a relatively small number of vehicles, perhaps 6,000 out of the 260,000 in the UK fleet—the maximum calculated loss is £79. Then there are a small number—about 7,000 of them on the road—of rigid vehicles with a trailer. Of those we estimate—the Department has done some analysis—that fewer than 50 will face potentially more than £300 extra in costs. There is, however, a relatively simple remedy for them—re-plating. I am sure that that can be explored further in Committee.
The Bill is not designed as a precursor to increased charges for businesses or road users more widely, as some have speculated. As my right hon. Friend the Secretary of State said earlier, our intention is clear: it is to introduce legislation that will level the playing field in order to help UK hauliers.
I am delighted that the Bill has been received so positively today, because I think that it presents an opportunity to correct an injustice that has persisted for far too long; I am delighted with the support that we have had from Members in all parts of the House; and I am delighted that the Bill is to be given a Second Reading today.
Question put and agreed to.
Bill accordingly read a Second time.
HGV Road User Levy Bill (programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the HGV Road User Levy Bill:
1. The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 13 December 2012.
3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
4. Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
7. Any other proceedings on the Bill (including any proceedings on Consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Mr McLoughlin.)
Question agreed to.
Civil Aviation Bill (Programme) (No. 3)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Civil Aviation Bill for the purpose of supplementing the Order of 30 January 2012 in the last Session of Parliament (Civil Aviation Bill (Programme)), as varied by the Order of 25 April 2012 in that Session (Civil Aviation Bill (Programme) (No. 2)):
Consideration of Lords Amendments
1. Proceedings on Consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion two hours after their commencement at today’s sitting.
2. Any further Message from the Lords may be considered forthwith without any Question being put.
3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Mr Simon Burns.)
Question agreed to.