Road Pricing

Nick Hurd makes a speech during a debate on Road Pricing. He highlights motoring costs, congestion and environmental concerns.

Mr. Nick Hurd (Ruislip-Northwood) (Con): Thank you, Sir Nicholas. I apologise for my earlier lethargy, which had more to do with the absence of lunch than the abundance of it. It may also have had something to do with my reticence to follow the powerful oratory of the Chairperson of the Transport Committee, the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), who I warmly congratulate on the report, which was extremely stimulating and touched on an issue of great interest to me as the Member of Parliament for Ruislip-Northwood.

My seat is in the borough of Hillingdon, which enjoys, I think, one of the highest ratios of cars to households in the country, and its motorists express to me a number of the sentiments expressed by the hon. Lady.

David Taylor : Does the hon. Gentleman agree that my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), who linked the nation's congestion problems to the propensity of its travellers to buy 2 million shiny cars a year, is not necessarily correct? Germany has even more cars per head, I would guess, than Hillingdon, but they drive significantly fewer kilometres than we do. That is the problem. We are not trying to discourage the virtues of the car, the numbers bought or the freedom and flexibility that they give. We are trying to give sensible alternatives, are we not?

Mr. Hurd : I thank the hon. Gentleman for that intervention. I do not know the data for Germany, but I am happy to take that at face value. I suspect that the problem may be linked in part to public perceptions of the quality of public transport as an alternative to the motor car in this country. The point that I was trying to make is that the issue is of great concern to my constituents, who have to endure highly congested roads and, at the same time, complain to me regularly about the cost of motoring. They are well aware that they pay the second highest petrol costs in Europe and that the Government have taken more money from them in successive years through vehicle excise duty and fuel duties. I think that it was about £28 billion in 2004-05, up some £7 billion since 1997.

My second point of interest relates to tackling one of the great causes of our reducing competitiveness as an economy: the cost of congestion. A few days ago, I went to listen to Sir Digby Jones talk in this place. He expressed his deep-rooted frustration at the failure of successive Governments to get a grip on upgrading the country's infrastructure and on the cost of congestion in particular, which his organisation puts at some £20 billion. More simply, he made the point that, if we cannot get our people and goods to market and work in time, how on earth can we compete with the economies in Asia and the emerging giants?

A third point of interest is the environmental aspect. It is clear to anyone who takes an interest in the climate change challenge that the transport sector and the growing emissions from it are arguably the biggest cause of concern.

I, like my right hon. Friend the Member for North-West Hampshire (Sir George Young), who has left his place, welcome the Government's initiative. I recognise that the Secretary of State for Transport is indulging in bold politics, which is not something with which he is traditionally associated. However, I want to register two concerns. First, if we are to have a public debate the Government should be much clearer about why we are doing this. I distrust a long list of benefits for any big idea. The debate on ID cards is a good example: when the priorities shift and the reasons for doing something get longer, the credibility of the case tends to fail.

The public instinctively will ask whether the plans are about raising more revenue to invest in transport in other areas. I take at face value the Government's assurance that their intention is to work on a revenue-neutral basis. However, the public will need convincing, because of the sentiments I expressed earlier. Is it about a fairer system to charge the motorist? That seems the really interesting area. My right hon. Friend talked about the effect on rural motorists in particular. The question is, is it worth the money? The report makes it clear that the Government's feasibility study estimates that the start-up cost will be between £14 billion and £60 billion-that is a disturbingly wide range-with ongoing costs of about £5 billion for a national scheme. The Government will have to send us very strong signals to convince us that it is worth that much to introduce a fairer system for charging motorists.

Mrs. Dunwoody : I am grateful for the hon. Gentleman's kind words. However, he might like to know that, through Customs and Excise, the Government have already spent £31 million on preparation for the lorry road user scheme, which has now been abandoned.

Mr. Hurd : I thank the hon. Lady for that intervention, which was extremely helpful in reinforcing my point that the Government must make a case for value for money if the prime purpose of the scheme is to introduce a fairer system under which to charge motorists.

The hon. Lady made some extraordinarily relevant remarks about the impact of a national road-pricing scheme on low-income drivers. The report is clear on the Committee's concerns about that. I hope that everybody would agree that it is highly undesirable-if I might create some mood music-to create a situation in which the roads are for the rich only. That would be wholly unwelcome.

Is the reduction of congestion the main reason for introducing the scheme? Do we need a national system? It is worth considering the alternative of targeting hot spots with a pricing mechanism and, particularly, introducing road pricing on new capacity where that is practicable. Congestion is not a problem across the whole network, as my right hon. Friend the Member for North-West Hampshire eloquently pointed out. Do we need a national system, given the huge costs involved?

We need a solution now, not in 10 to 15 years, which the Government have made clear is the time when we can reasonably expect a national scheme to be introduced. In its understandable excitement about pursuing this huge project, the Department risks losing sight of the need for two things. The first is new roads. I am not talking about blanket coverage, but the Government acknowledge that they need to reboot their road-building programme to invest in selective new road capacity. The second is supporting soft measures. That, too, is clear in the report, and is suggested strongly in research that I have seen that suggests that, where soft measures have been introduced by imaginative local authorities, they have made a real impact. I am concerned that, as innovation funding flows into the system that is clearly earmarked for initiatives relating to road pricing, local authorities that have prioritised soft measures will believe that they need not bother applying those.

My other concern about whether the measure will help to reduce congestion is: if it is to be revenue-neutral, will it make an impact if introduced on a national basis? My perception is that even the material petrol price increases that have occurred in the past year have not affected behaviour. British motorists still take their cars to the petrol pump and fill them up. I have not noticed a significant change in behaviour. That might be linked to my earlier point about the public's lack of faith in the public transport alternatives.

Mr. Drew : I am sure that the hon. Gentleman knows what I am going to say. The problem is that, in real terms, the cost of motoring is lower now than it was when we came to power in 1997 and the price of cars is dramatically lower than that of going by train or bus or even, to some extent, buying a bike. We are not serious enough about encouraging-in the nicest possible way-people out of their cars.

Mr. Hurd : I know the analysis and I have seen the data. I cannot disprove the fact that the real cost of motoring has fallen-but it does not feel like it to the motorist. When trying to engage the motorist in the political debate on road pricing, we should recognise that he has had it up to here.

Sir George Young : My hon. Friend's speech is much better than the one that preceded it. I press him on whether the motorist is insensitive to variations in charges. The data from the congestion charge in London surely leads to the opposite conclusion to the one that he draws-namely, that motorists are sensitive to increasing costs and that they do adjust their behaviour. That is why there has been a substantial drop in the number of cars in central London during the hours of the congestion charge.

Mr. Hurd : I accept that the congestion charge has changed behaviour. Like my right hon. Friend, I support the charge, although I have criticisms about how it was implemented. I suspect that at the root of the apparent success in changing behaviour was the investment in public transport, and the level of public confidence in London's public transport alternatives. However, I am not sure that that plays out across the country. Although the pricing mechanism can work, my concern is that it will have to be set at a high level in order to make an impact. The congestion charge is expensive at £8, but it has to be at that sort of level in order to bite. What concerns me is the flip-side-what it will do for social inclusion and what its impact will be on low-income motorists.

Mr. Love : I take issue with the hon. Gentleman's earlier comments. I understand that the congestion charge of £5 led to a substantial reduction in traffic when it was introduced. More recently, concern was expressed that people were beginning to take to the roads again. One reason for increasing the charge to £8 charge was not merely to deal with the revenue deficit but to maintain the impetus in getting people out of their cars. The hon. Gentleman's most recent comment-that only if the economic cost to motorists was significant would they use their cars less-was valid.

Mr. Hurd : I thank the hon. Gentleman for reinforcing that point.

Another concern is about the benefits. The list of benefits cited include environmental ones. Again, I reiterate my point. Are we sure that those benefits can be delivered on a revenue-neutral basis, given what has been said about the psychology of the British motorist and his sensitivity to price? If the Government are serious about reducing transport emissions, they would be better advised to focus their energies and political capital on reducing the cost of green cars and green fuels, whose market share is pitiful. Green fuels have about 0.5 per cent. of the market, and if we are to get a grip on the hugely important agenda of reducing emissions, the future lies in technology, not in demand management. To advance the debate, the Government need to be much clearer about why it will make a difference.

Next, I echo the comments made by my right hon. Friend the Member for North-West Hampshire. Where is the momentum behind the public debate that has been called for? In a speech in June 2005, the Secretary of State said that we needed to answer three questions. First, what sort of system did we need, and what sort of benefits would it bring? Secondly, was the technology available, and could we construct an affordable scheme that would work? Thirdly, what practical steps did we need to take in the meantime? That sounds great, but it seems that the ball has been passed to local authorities. Are they picking it up?

Again, the Committee's report makes clear that guidance on local transport plans invited local authorities to contact the Department by January 2005 if they were interested in exploring a package of measures to tackle congestion. It reads:
"The Secretary of State told us that he had received a positive approach from local authorities."

Can the Minister be a little bit more specific about how many councils have expressed enthusiasm about that? Has the Department decided who will lead the pilots, particularly the inter-urban pilot, which the Committee's report identified as being critical to advancing the debate? My sense is that local authorities have real concerns about the lead they are getting from the Government.

The Minister of State, Department for Transport (Dr. Stephen Ladyman) : I will answer those questions now. Over 30 councils have expressed an interest and we will be making an announcement shortly about which ones we think are of the most interest.

Mr. Hurd : I am grateful to the Minister for that answer. After the rejection in the Edinburgh referendum, I was worried that there were concerns about the political risk attached to this agenda. Concern has been expressed about the lead being given by the Government on technology, which seems hugely important to this issue, particularly in the context of a phased approach where the Government wish to encourage local schemes, but with a view to that ultimately fitting into a national programme. The technology at play here is fundamental.

It has been put to me that not enough lead has been given by the Government on standardisation. The Committee's report is explicit on that:

"the Government should establish a national framework within which local authorities can design the finer detail of the scheme . . . The Secretary of State told us that he would seek to get some standardisation agreed in the near future:
'That is why I say that if we were going to go down this road, we would want to get that standardisation in at the start, otherwise it would make it extremely expensive.'"

Can the Minister respond to that apparent concern about the lead being given by the Government on the standardisation of technology? My over-riding concern is about the lack of strong leadership in this debate. I fear that momentum will be lost. An interesting idea has been introduced. A debate has been called, but I sense a lack of momentum and a potentially wasted opportunity.