Taxes and charges on road users (HC 103-iv) Transport Committee 11 Feb 2009

Evidence given by:
2.45 The Royal Dutch Touring Club (ANWB); Ferry Smith, Public Affairs Manager
Federation of German Industries; Thomas Fabian, Senior Manager, Transport Policy
3.30 Department for Transport Paul Clark MP, Parliamentary Under-Secretary of State
HM Treasury Angela Eagle MP, Exchequer Secretary to the Treasury.

Q459 Mr. Eric Martlew (Carlisle): Mr Fabian, when we were in Germany the toll for all the HGVs was the same whether you were Polish or German or from the UK, but can you explain the sort of pay-back system that the German hauliers got, because they got some money back, did they not, so how does that work?

Mr Fabian: The pay-back system goes back to the introduction of the toll and with the introduction, because we have pretty high fuel taxes, for example, and high wages as well, so the haulage businesses said, and the government agreed, that there are particular competitive disadvantages for the German road haulage industry. First of all, I have to say that the haulage industry itself is not organised in the BDI so I cannot speak for the haulage businesses, but I will try to explain how the system works. It was agreed that the harmonisation differences between other countries and the German road businesses amounted to €600 million. That was a political consensus and it was agreed that there should be ways to compensate the German road haulage industry, and that is done at the moment via the reduction of the vehicle taxes for heavy goods vehicles which have been reduced to the European minimum level. There is one more thing. There is an innovation programme which has a sum of €450 million, and that is available for the German haulage industries and gives incentives to buy heavy goods vehicles that are particularly environmentally friendly, which are not yet standard. Due to European regulations of course, this support can only last up to a certain date. I think Euro 5 vehicles are required from October this year, so the financial support for businesses to invest in those vehicles was limited in time.

Mr. Eric Martlew (Carlisle): Thank you very much.

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Paul Clark: Can I also add to the answer in terms of the issue about roads. We are comparing the spending on roads directly but of course there is the spending that goes into the accident, the policing, the congestion, the air quality controls and so on that also are a cost from roads. In terms of the figure that is spent on the railways, I do not have that overall figure to hand.

Q555 Mr. Eric Martlew (Carlisle): I would suggest it is about £6 billion.

Paul Clark: About £6 billion.

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Q569 Mr. Eric Martlew (Carlisle): I have listened, Minister, and I am not convinced really; I suspect that the trials will carry on into the future. From what I can gather there is road pricing in Germany, there is road pricing in parts of Canada, there is road pricing in Italy and there is going to be road pricing in Holland, so it looks like we are reinventing the wheel. The reality is that the politicians sitting around here, perhaps with the exception of Mr Leech, I do not know, would not want to go into the next election on a policy of road pricing. Is it not right that until we can convince the motorists in this country that road pricing is necessary and that road pricing will not cost them any more money, we will not introduce road pricing in this country. Is not a fact that the Manchester referendum was a sort of death knell on congestion charges in the city?

Paul Clark: One of the things that Mr Martlew said there was about convincing the road users that it will not cost them any more money. I would not disagree that that is an element in any discussions that we have but we have to be able to answer what will be the cost of the scheme that you introduce, and the problem is one of the reasons for having the demonstration projects is to find what is the technology that we might want to use if we were to follow a national road pricing policy, what would be the cost of implementing that, what would be the cost of administration of that and then we could start to have some idea of whether we could have that argument and discussion with the road users of this country. At this moment we cannot do that.

Q570 Mr. Eric Martlew (Carlisle): What I was implying is that it is happening in all these different countries in the world and the only difference between them and us is we drive on the other side of the road, so why do we not just pick their brains and say this is the system that works and this is the system that does not work, because we are not going to introduce road pricing, are we, within the next decade?

Paul Clark: We do have a dialogue, as I was indicating, with the Dutch and with other countries that are investigating these issues the world over about what they have learned and what lessons they are learning, where they are going and the route. Obviously we do that because it would be senseless not to have discussions with some of those that have, but the countries that have been indicated have had a range of different schemes or are introducing a range of different schemes, such as the Dutch, compared to others - compared to Germany for example - in terms of their charging and in terms of just HGVs. There is a whole range of issues there but we have to meet the issues that we have in terms of our transport issues and problems here within this country.

Q571 Mr. Eric Martlew (Carlisle): That brings me to my final point, the issue about congestion charges for cities, the comment I made is that after the Manchester referendum that is dead. Do you believe that there will be any more cities that actually vote for congestion charges in a referendum?

Paul Clark: Let me assure you that the Transport Innovation Fund provisions are still there, we will still entertain plans that are brought forward by areas that are still looking at the possibilities of obviously bringing forward plans to tackle the congestion they have got in their towns, within their regions, and we are looking at those schemes that do come forward in terms of tackling that congestion through investment in public transport and the introduction of congestion charges. There are still discussions going on and I am hopeful that they will still come forward. Manchester was one such bid that happened and obviously Manchester is still receiving the moneys and the investment through the other programme because the TIF money has always been additional to the general flow of funds for investment in road transport plans.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

The full transcript may be read here.

On behalf of Eric Martlew, 3 Chatsworth Square Carlisle Cumbria CA1 1HB