Clause 9 - Rates of duty for goods vehicles
Finance Bill
6:00 pm
Mr Howard Flight (Arundel and South Downs, Conservative)
I hope that all hon. Members are uncomfortable with a situation in which British trade or industry is put at an unnecessary competitive disadvantage to international competitors. The Minister will know that the British haulage industry has suffered badly during the past five or six years. Its costs have increased by some 16 per cent. since 1997 alone, and its profit margins range from 0 to 2 per cent. depending on the operators. Domestic trade has seen a substantial invasion by continental operators, which have increased their business by around 60 per cent. in Britain in the past five years. I recollect a KPMG study of two years ago that examined plusses and minuses for the British industry; it could point only to some labour cost advantages. Those are now under threat and there is a shortage of applicants for jobs because lorry drivers' pay is low compared with that in continental Europe.
In their consultations with the industry and representative bodies, were the Government able to argue that the proposal for a significant reduction in vehicle duty will restore any semblance of fair competitiveness in operating costs between the domestic industry and the continentals, which come into Britain after topping up with diesel in Calais? Is the reduction likely to shake off some of the bad practices that have gathered momentum—such as UK businesses moving their entire headquarters overseas, which is called changing flags—and some of the more criminal activities, such as the improper use of red diesel? There has been surprisingly little general media coverage. Obviously, the industry is pleased to have cuts. Having cuts is better than not having them, but I suggest that they are merely a temporary buying-off measure unless a robust case can be made that the British haulage industry will be put on a fair and competitive footing.