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Fuel Duty

I need to make a little progress. I have only four minutes left, and no more injury time. A critical aspect that has not been mentioned so far, although I think the hon. Member for Twickenham touched on it, is the freight industry. Although our petrol is far from the most expensive in Europe—I think we are now seventh or eighth on the list—because we charge the same duty for diesel as for petrol, we have the highest diesel prices in Europe. People are coming into our country in lorries and stealing work from United Kingdom hauliers. According to a haulier who was involved in the fuel duty lobby the other week and whom I arranged to meet along with one of the Transport Ministers, between January and June 2007 the fuel bill for Les Knight Transport Ltd, which has a fleet of about 20 heavy goods vehicles, was £390,000. The bill for the same period this year was £484,000. That amounts to an increase of £94,000 so far this year. I asked how much of it the firm had been able to pass on to its customers. A fuel duty escalator is built into its contracts so that it can pass on some of the price, but so far it has only managed to get its customers to pay an extra £34,000. So far, £60,000 of extra cost has been imposed on the business in this year alone. No business could sustain that for long, and British hauliers will not be able to sustain it for long. I accept that that their social costs are lower, but we need to find a way of adjusting the balance on behalf of the haulage industry. Whether that is done through an essential user rebate—which is what it is asking for, but which seems to me to be a rather complicated mechanism—or a reduction in excise duty on heavy goods vehicles, we have to do something and do it fairly rapidly. I have been arguing that we should re-open the case for the vignette. The hon. Member for Twickenham suggested that we should just charge people coming into the country, but that would be against EU law. We would have to have a simple vignette system that everyone—British hauliers as well as foreign hauliers—has to buy. A foreign haulier would, of course, buy it at the day rate, and the British haulier would buy it at a discounted annual rate, but what is important is that the revenue from that system would be used to offset UK excise duty on heavy goods vehicles. That would be a perfectly legal system under EU law, and it would be zero-cost to the Treasury and provide a considerable competitive rebalancing for the heavy goods vehicle industry. The Government were considering that idea. They decided not to look into it any further in the Budget, but that was before the current huge oil price rise. I suggest that one of the things my right hon. Friend the Chief Secretary could do is take that file out again and have another look at it with the eye of a politician, and see if it might provide her with the mechanism we need to make the UK HGV industry a bit more competitive.