HGV Road User Levy Bill

Public Bill Committee, 6 December 2012.

Sandra Osborne (Labour, Ayr, Carrick and Cumnock)

Before we begin, it may be useful to Members who are new to Public Bill Committees if I explain how the proceedings work. The selection list for today’s sitting is available in the room. This shows the amendments selected for debate. Amendments grouped together are generally on the same or a similar issue. The Member who tabled the amendment makes an opening speech and proposes the amendment. Any other Member can then speak on the amendments in the group. Once all Members—including the Minister, if appropriate—have spoken, I will call the Member moving the amendment again. It would be useful if they indicated whether they wish to withdraw it or to seek a Division. The same applies to any other amendments in the group. Amendments are voted on in the order they come in the Bill, although they may have been debated in an earlier group. I hope that provides some clarity for the proceedings.

Clause 1 - Charge to hgv road user levy

Stephen Hammond (Conservative, Wimbledon)

It is good to see you in the Chair this morning, Mrs Osborne. I am looking forward to piloting this Bill through the Committee stage. Clause 1 is relatively simple. Operators of UK-registered heavy goods vehicles currently pay charges or tolls in most European countries to use the road network in those areas. However, at the moment foreign-registered HGVs are not charged to use the UK road network. The Bill seeks to redress that imbalance by introducing a levy for all HGVs weighing 12 tonnes or over for using all public roads in the United Kingdom. This charge will apply to both UK and foreign-registered vehicles.

The levy is time based and will vary according to vehicle type and weight and number of axles, and will range from £85 per year for the smallest HGV up to £1,000 a year for the largest. This provision seeks to ensure that the charging scale is linked to the amount of vehicle excise duty that each vehicle pays, and to the amount of wear on the infrastructure that the HGV is likely to cause. The effect of the clause is to make all HGVs pay to use the roads in the UK.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

It is a pleasure to see you in the Chair, Mrs Osborne. I hope that you and your colleague Mr Amess will enjoy our proceedings; I am sure that we will. We had a relatively non-partisan beginning to the Bill—from the Ways and Means debate, through Second Reading and the evidence sessions on Tuesday. The only mildly discordant note was sounded by the hon. Member for South Staffordshire, who perhaps was a little critical of the former Labour Government for not introducing this measure. I fully understand that, and I know it was not meant in any way maliciously. It is a fair criticism and we acknowledge that by commending the coalition for introducing the Bill, which we clearly support. I want to reflect that in this opening debate.

I have one question for the Minister, regarding the word “any”. It is good that the Bill has been introduced, and both parties have been promising to address this issue for some time. I know from speaking to some of the witnesses after Tuesday’s sittings that they are pleased that the Bill has been introduced and that we are going to give it an expeditious passage. Mr Hookham from the Freight Transport Association was very kind when I spoke to him. He reminded me of the argument we had with the European Commission over cabotage in 2007 and how we stoutly defended the interests of the British road haulage industry against what the Commission was trying to do. He said that sadly, he expected the Commission to try to do the same thing again next year. I know the Minister and his officials will be gearing up to put up the same stout defence to protect the industry again this time.

The only question I want to ask, which was raised on Tuesday afternoon, concerns passenger service vehicles and coaches. The clause, which frames the Bill by stating that there will be a levy for foreign vehicles, refers to “any heavy goods vehicle”. Will the Minister confirm that the law clearly differentiates between that and PSVs and coaches, and that PSVs and coaches will not be captured by the provision? I referred to that on Tuesday, but I would be grateful if he reconfirmed it.

Stephen Hammond (Conservative, Wimbledon)

Although I have been urged to consider passenger service vehicles, some of which clearly weigh more than 12 tonnes, I am happy to confirm that the scope of the Bill is exactly what it says it is—heavy goods vehicles are vehicles that carry goods—so passenger service vehicles do not qualify. My hon. Friend the Member for North West Leicestershire has urged me to consider PSVs in respect of the Bill and, as I told him in the evidence session, that may be something for the future. The scope of the Bill is clear: passenger service vehicles are not covered by the scheme.

Clause 2 - Meaning of “heavy goods vehicle”

Stephen Hammond (Conservative, Wimbledon)

The clause goes to the essence of the question asked by the hon. Member for Poplar and Limehouse. Its purpose is exactly to clarify and define a definition of a heavy goods vehicle. For the purposes of the levy, a heavy goods vehicle is any vehicle weighing 12,000 kg or more, or any motor car as defined by section 185 of the Road Traffic Act 1988 that is liable for vehicle excise duty in accordance with part 6, on vehicles used for exceptional loads, or part 8, on goods vehicles, of schedule 1 to the Vehicle Excise and Registration Act 1994. To cover non-UK registered heavy goods vehicles, the definition also covers those vehicles that would have been charged vehicle excise duty but for an exemption based on their being in the UK only temporarily.

The clause provides the Secretary of State with the power to amend, by order, the weight at which the levy applies. The order has to be made by a statutory instrument that must be agreed by the House of Commons under the affirmative resolution procedure.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I rise to seek clarification from the Minister on some of the language in clause 2. He described the clause quite simply, and it looks straightforward. However, on Tuesday, we particularly discussed the Irish border, and the implications for business. Subsection (1)(b) states that the duty

“would be so charged but for an exemption granted on the basis that the vehicle is only temporarily in the United Kingdom.”

That prompts the question whether this clause is the one that the Minister referred to on Tuesday, when he said that vehicles temporarily in the UK from the Irish Republic would be exempted. Subsection (3) states:

“The Secretary of State may by order amend subsection (1) by substituting a different number of kilograms for the number for the time being specified there.”

I am not sure that the language is entirely clear. Does the “different number” relate to the kilograms or the time specified?

The Minister reassured us that any changes to the weight limit would be by statutory instrument, with consultation, a debate in the House and a vote. However, the fact that the Secretary of State may vary the weight limit by order—that process can be simple and relatively quick—could create uncertainty about which vehicles to buy for businesses purchasing fleets for the medium to long term. Only last year, the Government said they would consider licensing longer and heavier vehicles, so weight ratios might fluctuate. I seek assurance from the Minister about the temporary exemptions under subsection (1)(b) and the differentials the Secretary of State may order, so that we can have greater certainty.

Julie Hilling (Labour, Bolton West)

I have some further questions for the Minister following Tuesday’s evidence sessions. A 12-tonne weight limit has not previously been recognised for other purposes in the UK, and the concern is that introducing it may lead to some confusion. During the evidence sessions, the view was expressed that it was not necessary to reduce the weight limit beyond that, and I should be interested to hear the Minister’s view.

Is the Minister concerned that some operators might then use other means to reduce the weight of their vehicles? When cattle transport was placed under the HGV category some years ago, some companies reduced the weight of their vehicles so they could be driven on an ordinary licence, rather than an HGV licence. Is there a risk that companies might use other means to slip their vehicles under the net, so they are not captured by the 12-tonne threshold?

Stephen Hammond (Conservative, Wimbledon)

The hon. Lady questioned the point of the 12,000 kg limit several times during the evidence sessions. One of the key points that emerged from those debates was that the vast majority of foreign vehicles that come to the UK are over 12,000 kg; indeed, most are 40,000 kg vehicles.

We are limited by EU law as to which vehicles can be covered by the charging scheme for goods vehicles: it can be vehicles of 12,000 kg and over, or 3,500 kg and over. The 12,000 kg limit is now largely recognised in respect of foreign vehicles, and a number of people told us that that limit is now well recognised in the UK, although I accept that not all vehicles have that. My concern about moving to 3,500 kg and over is that we would catch many relatively small UK vehicles but few extra foreign vehicles. As the Bill’s purpose is to ensure balance for UK vehicles, the 12,000 kg limit was chosen because it is the minimum weight at which most companies would choose to send vehicles over to the UK.

I turn to the hon. Lady’s second point and the one made by the hon. Member for Poplar and Limehouse: why the Secretary of State has the power to amend the weight limit. They will both remember that during the evidence sessions, the hon. Member for Linlithgow and East Falkirk discussed the possibility of there being unscrupulous foreign operators. There is just the chance that one or two might try to produce a vehicle that is just under the limit and therefore not caught by the levy. Although that scenario is highly unlikely, it is important that the Secretary of State have the power to review the weight threshold.

In response to the earlier question from the hon. Member for Poplar and Limehouse, I can confirm that the “number” referred to in subsection (3) is the weight. I take his point about giving such a power to the Secretary of State; none the less, the protection exists that it would have to be passed by a Standing Order of this House and confirmed by affirmative resolution. He referred to the period when he was in government and I was in opposition, and he will probably remember that it is usual for Opposition spokespeople to suggest that Secretaries of State should not be given too much power by order. I hope he will accept my reassurance that the requirement for any order under subsection (3) to go through the affirmative procedure and be debated in the House of Commons means that a protection exists.

With regard to the hon. Gentleman’s point about clause 2(1)(b), the temporary exemption referred to is conferred by the Motor Vehicles (International Circulation) Act 1952 and the Motor Vehicles (International Circulation) Order 1975, which allow some foreign vehicles and foreign restricted vehicles to use UK roads on a temporary basis for up to six months without necessarily qualifying for UK registration. That is why that provision is in the Bill.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I sense that the Minister is about to conclude, but I want to press one point a little further: does that provision therefore cover or frame the Irish solution, referred to on Tuesday, for those roads that cross the border and for those vehicles that are not necessarily coming into the UK to work, but are on UK land simply because of the historical construction of a road? It sounds as though the measure dates back to way before that and covers a different animal altogether.

Stephen Hammond (Conservative, Wimbledon)

It could or could not cover the vehicles the hon. Gentleman refers to. The intent was to encompass things that were prior to that date. I will come on to the Northern Ireland situation, as it is covered later in the Bill. I suspect we will probably get through that during our third sitting.

Andrew Bridgen (Conservative, North West Leicestershire)

I would like to point out that the 12,000 kg weight that we are talking about is the laden weight, or what would normally be referred to as the gross vehicle weight, including the cargo. I put it to the Committee that it would be highly unlikely that a foreign operator would downgrade to below 12,000 kg, because they would be affecting the payload they can carry, which is their earning capacity. Given the price of fuel, even on the continent, it would be uncommercial to do such a thing.

Stephen Hammond (Conservative, Wimbledon)

I am grateful to my hon. Friend for his expertise. We will all remember the fact that he put on the record his interest and his entry in the register; I am sure he would have wanted to make that point first today. He has made that point clearer.

Julie Hilling (Labour, Bolton West)

Before the Minister concludes, I have a further question around any confusion among UK operators, who may not normally use that definition of 12 tonnes. Are there any administrative difficulties that may arise for UK operators from that determinant?

Stephen Hammond (Conservative, Wimbledon)

I can tell the hon. Lady that that issue did not arise during the consultation, and the evidence we heard during our previous sittings indicated that there was little confusion for UK operators. This is a well-recognised definition for foreign lorries, and it will also encompass the UK definition. I am reasonably reassured—as much as I could possibly be—that this is an acceptable classification.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

The Minister said that, later in our consideration of the Bill, he will deal with the questions raised on Tuesday about cross-border transports in Ireland. When is he likely to arrive at that point? I am not quite clear as to which clause addresses that issue.

Stephen Hammond (Conservative, Wimbledon)

The next one.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

Very good.

Stephen Hammond (Conservative, Wimbledon)

With that, I ask the Committee to support the clause standing part of the Bill.

Clause 3 - Roads to which this Act applies

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I beg to move amendment 1, in clause 3, page 2, line 19, leave out subsection (2).

I am grateful to the Minister for reminding me that this is my next contribution on the question of the Irish border. The issue was first referred to in the Ways and Means debate on 23 October, which starts in column 861 of volume 551 of the Official Report. In column 884, the Minister gave a couple of examples of the exemptions for specified roads. I will return to that in a moment if I may.

Amendment 1 is probing. It allows us to explore the in-depth meaning of subsection (2)(a) and (b). Paragraph (a) states

“that this Act does not apply to specified roads, or roads of a specified description,”

and paragraph (b) states

“that this Act applies only to specified roads, or roads of a specified description.”

That is one of those belt-and-braces situations referred to on Tuesday by the hon. Member for North West Leicestershire. Surely just paragraph (a) or paragraph (b) would have been sufficient, because the levy should apply to all British roads and we should therefore need only exemptions. However, the Bill states that there will be exemptions and that there will be specified roads. I am not sure why both measures are necessary when one or t’other would be adequate.

In the Ways and Means debate, at column 884, the Minister referred to toll roads, and he has just mentioned the questions that were raised on Tuesday about logistics companies that operate across the Irish border and the implications for toll roads in the Republic. He also referred to the Government’s discussions with Dublin, and a question was asked—I think by one of his colleagues —about the Northern Ireland Executive’s role in those discussions and how far they have gone.

Amendment 1 is probing and refers to the Secretary the State’s discretion, which is obviously powerful and seems to cover every eventuality. Our proposal asks why both measures are necessary and gives the Minister the opportunity to say a little more about what will happen in Ireland.

Stephen Hammond (Conservative, Wimbledon)

I thank the hon. Gentleman for tabling his amendment and I am grateful for his stating that it is probing.

Clause 3 refers to the roads to which the Act will apply. The amendment would remove the subsection that gives the Secretary of State the power, by order, to exclude particular roads. That order must be made by way of a statutory instrument that must be agreed by the House of Commons through affirmative resolution. The power has been included to help to ensure that the legislation can be adapted to fit with other legislation that may arise in future. I would like to illustrate two areas where retaining the legislation in its current form will be beneficial.

First, having the clause written in such a way ensures that we can overcome any issues that there may be with all the devolved Administrations. Under the terms of the Eurovignette, HGVs cannot be charged twice for using the same road, with exemptions for tunnels, estuarial crossings and congestion-charging schemes. The Welsh Government in particular were concerned that a HGV road user levy might prevent them from introducing any other road user charges for HGVs over 12 tonnes. I have given Welsh Ministers the reassurance that the Bill does not seek to encroach on their powers and that, should they wish to introduce any tolls or road charges in future, we would use the powers in subsection (2) to assist them. That might also be needed if there were powers to put tolls on new road capacity in England, such as a significantly enhanced A14. It might therefore become important and necessary to use the powers here to exempt people from double charging. That is the legislation’s purpose.

Secondly, on Tuesday, we discussed in considerable depth the roads that criss-cross the border between Northern Ireland and the Republic of Ireland, on which the hon. Member for Airdrie and Shotts questioned me in detail. Again, retaining the power as written would enable us to exempt those roads if that should prove necessary. Some people use those smaller criss-crossing roads to make that journey several times a day, and we are in discussions with the Irish Government to identify where the exclusion of a small but specific number of roads would be appropriate.

To be clear about our intentions: where we wish to exclude roads that, for example, cross the border several times, that will be done through a statutory instrument that would need to be agreed by the House of Commons through an affirmative resolution. These are the powers that will enable us to do that.

Maintaining the integrity of the clause is important as it supports the devolution arrangements in place between the relevant Governments. The clause gives us the option to make changing the extent of the scheme relatively easy. That cannot be done without the formal approval of the House.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

On an additional point of clarification, the Minister referred to the enhanced A14 with a view to possible tolling. The Government are clearly saying that they will consider enhanced roads and new roads for toll charging. Is he saying, therefore, that to avoid double charging a statutory instrument will have to be passed each time we build a new road or an enhanced road to exempt it, or is there a collective exemption for new roads and enhanced roads, although the House would have to examine each and every one individually?

Stephen Hammond (Conservative, Wimbledon)

Were we to reach agreement with the Irish Government, for instance, on a number of exemptions, we might take those collectively. The clear intent and purpose of the clause, thereby significantly limiting the power, is that, for each and every scheme that proposes new tolling—either for a new piece of road or for a substantially upgraded piece of road—the Government will have to come to the House of Commons and table a statutory instrument.

Julie Hilling (Labour, Bolton West)

I am slightly confused by what the Minister is saying. We already have the M6 toll, for instance, so how will the clause work? If a vehicle chooses to use the M6 toll, does it not pay the charge for that day, or not pay the toll?

Stephen Hammond (Conservative, Wimbledon)

I will also take an intervention from the hon. Member for Cardiff South and Penarth.

Stephen Doughty (Labour, Cardiff South and Penarth)

Further to that point, will the Minister not have to introduce an exemption immediately for the M6 toll road, given that it already exists, to comply with the directive?

Stephen Hammond (Conservative, Wimbledon)

We are considering the road network as it exists for the bulk of the charging purposes. If someone chooses to use the M6 toll road as it exists, they cannot, under the Eurovignette, be charged twice. Had the M6 toll road been within the scope of the Eurovignette, we would have had a problem. However, the M6 toll road is exempt from the Eurovignette as it is regarded as a congestion-charging scheme, not a toll scheme, under the technical description. That is an interesting point, but it is not relevant to the clause. The road, therefore, is already exempt.

Andrew Bingham (Conservative, High Peak)

I am grappling with this as well. A heavy goods vehicle from abroad will have to get to the M6 toll road, unless it drops down from a helicopter, so it will be charged anyway.

Stephen Hammond (Conservative, Wimbledon)

I am sure that we could perambulate around this interesting discussion for a long time. Unfortunately, the discussion is irrelevant, because such a vehicle will be on UK roads, so it will be charged. Had the M6 been within the scope of the Eurovignette, there would be an issue; as it is not, that vehicle can travel on the M6 and pay what is not a toll but a congestion charge, as I have already explained. It is therefore perfectly acceptable for us to charge the levy and the M6 congestion charge. Under legislative definitions, the M6 is not a toll road but a congestion charge road, so we are compliant with EU legislation. With those reassurances, I hope that the hon. Member for Poplar and Limehouse will withdraw his amendment.

Stephen Doughty (Labour, Cardiff South and Penarth)

Will the Minister briefly explain more about his discussions with Welsh Ministers and how such devolution would work in practice? For example, for heavy goods traffic coming from Ireland only to a Welsh destination and then returning, would he, if the Welsh Government introduced charges, make an exemption to prevent double counting? Is that how it would work?

Stephen Hammond (Conservative, Wimbledon)

Discussions with the Welsh Government have been clear. Initially, they were looking at whether they needed a legislative consent motion but, as the Bill relates to taxation, they have accepted that that is not necessary. The Scottish and Northern Irish Administrations have also confirmed that they are not seeking LCMs.

The discussions with the Welsh Administration were about whether they would at some stage want to toll part of the M4. If someone drove on that part of the M4 and then entered an area of the UK subject to the levy, we would need agreement with them about how an exemption worked. The discussions were specifically about that, rather than anything else.

Jim Shannon (DUP, Strangford)

I want to ask a couple of questions that are relevant to Northern Ireland, and I am sure that the Minister can cite some correspondence and examples to give us confirmation and reassurance.

I represent Strangford in Northern Ireland, and many freight trade users from my constituency travel across the border several times each day. The Minister has referred to that, and some questions have already been asked. I think he said that there have been discussions with the Scottish Parliament and the Northern Ireland Assembly, and with the relevant regional Administrations. I am keen to hear feedback from those discussions, because things change very quickly in Northern Ireland and, indeed, in the world. What has been the input of the Northern Ireland Assembly, since we are the only part of the United Kingdom of Great Britain and Northern Ireland that has a direct land border with the Republic?

It has been confirmed that there will be a new bridge across the narrow waters close to Warrenpoint, which will link the Republic of Ireland and Northern Ireland. The indications are that it will be a toll bridge, and the funds raised from that will go to the Republic of Ireland, not Northern Ireland, because the Republic will pay for it. We will therefore get that transport link without cost to Northern Ireland. I am keen to find out what discussions the Minister has had with the Northern Ireland Assembly on that and its potential. It may be a few years away, but that is part of the changing environment.

Will the Minister reassure freight transport users in Northern Ireland—particularly in my constituency, but across the whole of Northern Ireland? We need lorries to take our produce to the Republic and elsewhere, and it is important that we all have a level playing field. Will he also give us some assurance that freight transport users will not be financially disadvantaged in any way?

The Minister has indicated that a legislative change could be made. Will he give us some idea of how long it would take for such a legislative change to come through and be effective? It is good to have legislation in place, but it is also good to have the ability to respond quickly. If there are loopholes which disadvantage the FTA and its members in Northern Ireland I seek advance warning of that. Will there be direct discussions with the Northern Ireland Assembly to ensure that any legislative changes are ones that it and the FTA are happy with?

Stephen Hammond (Conservative, Wimbledon)

We went through almost all of those questions quite extensively at the evidence session on Tuesday. To be clear, there are already tolls on several motorways in the Republic of Ireland. It seems completely reasonable, therefore, to have a form of road-user charging in Northern Ireland. Indeed, hauliers from the hon. Gentleman’s constituency are completely disadvantaged at the moment. I am sure they will be jumping for joy because the Bill corrects that disadvantage. A haulier from Strangford doing a return trip to somewhere in the Republic currently pays more in tolls than a haulier coming from the Republic would pay for a day’s levy in Northern Ireland. At least by putting this levy in place we are starting to redress the balance.

The discussions with the Irish Government have been clear. They have suggested that the whole of Northern Ireland be exempt from this levy on the basis that the Irish Government already put some money into the roads in Northern Ireland. The counter to that is that Irish lorries using those roads are causing considerable wear and tear so we have rejected that suggestion. It seems to be a perfectly good and sensible resolution that we introduce the levy in Northern Ireland. We are, as I said previously, looking at—

Jim Shannon (DUP, Strangford)

Will the Minister give way?

Stephen Hammond (Conservative, Wimbledon)

Let me make a few more points. I accept that there are some additional complications with the border, which is different from other parts of the UK. None the less, those issues are not insurmountable. We are in continuing discussions with the Irish Government, principally about possible exemptions for a small number of roads that may criss-cross the border. Clearly we will make sure that we get the Irish Government’s agreement to those exemptions prior to proceeding.

Jim Shannon (DUP, Strangford)

Just to clarify the point: the FTA in Northern Ireland is happy with the changes proposed. My questions were for clarification and to get some assurances so that I can go back to the people who have come to me.

Stephen Hammond (Conservative, Wimbledon)

I am happy that the hon. Gentleman will be able to go back to his constituency and prepare to give his hauliers good news.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

It is not quite the same as government.

Stephen Hammond (Conservative, Wimbledon)

Well, I clearly cannot hope that as I am convinced that the right Government is in place. I am sure that he wants to go back to his hauliers and communicate the good news that this Bill brings them and tell them about the ongoing discussions on some minor exemptions. I hope that the hon. Member for Poplar and Limehouse will withdraw his amendment.

Pamela Nash (Labour, Airdrie and Shotts)

I am still not clear about the purpose of the exemptions for some of the cross-border roads between the Republic of Ireland and Northern Ireland. The Minister said earlier that it would be to protect some of the local users who would use those roads several times a day. Would it not be better to find a way to give those users an exemption rather than the roads to prevent international hauliers using those roads to avoid paying the levy?

Stephen Hammond (Conservative, Wimbledon)

We rehearsed this argument again at the evidence session. It is possible that some hauliers will choose to use a very rural road, but clearly it would be much better, as the scope of the Bill allows, to exempt the roads. There are a number of good reasons for doing that. I hope that the hon. Lady will continue to seek that exemption.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I thank the Minister for his answers. He was generous in giving way to interventions and responding to individual comments. My hon. Friend the Member for Airdrie and Shotts pressed the question of the situation in Ireland on Tuesday. We are reassured by what the Minister said. We do not want to press this to a vote. If I understood him correctly, congestion charges are exempt. The M6 is a congestion charge, not a toll charge. I have not been up the M6 but I thought I remembered it being branded as a toll road with toll charges. The Government might have some re-signage to do to ensure that a litigious foreign logistics company cannot take a picture of the sign and argue that it says it is a toll road, not a congestion road, even though we know that is what it was built for and that is what it does. There may be a small point there that the Highways Agency will look at in the years ahead. On the basis of the reassurances that the Minister has given, I beg to ask leave to withdraw the amendment.

Stephen Hammond (Conservative, Wimbledon)

We have rehearsed many of the arguments. I am grateful to the hon. Gentleman for withdrawing the amendment. The intricacies and idiosyncrasies of European definition never cease to amaze many of us. Should that haulier choose to do that I will refer him to the Commissioner in Brussels who I am sure will be delighted to explain to him in detail why it is a congestion charging road and not a toll road.

None the less the clause is clear in what it does. It is the extent of the roads to which the Bill applies. It is the circumstances and method on which specific roads might be excluded. The Act is applicable to all public roads in England, Wales, Scotland and Northern Ireland. The Secretary of State may exclude some specific roads by order. As I said, the order needs to be in the form of a statutory instrument. It must be agreed by affirmative resolution. I hope that the Committee will agree that the clause should stand part of the Bill.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I have one question for the Minister. I apologise if this was covered on Tuesday. Many of our contributions today are probing and seeking clarification. As I have said before, and as the Minister has outlined on a number of occasions, there is cross-party support for the Bill. We are just dotting i’s and crossing t’s here. I may have drifted off on Tuesday at one point, Mrs Osborne, reflecting on West Ham United’s great win against Chelsea on Saturday. It was still very fresh in my memory at that point. A question was circulated to members of the Committee, which I am sure the Minister will have seen and which I do not remember being asked. It was a matter of curiosity for me. Question 6 reads:

“Clause 3(4) defines a public road as a ‘road that is repairable at public expense’ Do you understand this to differ in any practical way from the term ‘highway maintainable at public expense’, which is used in the Highways Act 1980?”

Obviously there are two different definitions and I wanted to give the Minister the opportunity to put on the record that there is no conflict between those two definitions.

Stephen Hammond (Conservative, Wimbledon)

I am grateful to the hon. Gentleman for raising that point. I am staggered that he could have drifted off during my evidence session. But it is, of course, a possibility. There is a small, technical but significant difference between the two definitions. The use of “highways” would mean that we might include within the scope of the Bill footpaths, bridle paths and other things. A “road” is a more specific definition and that was the reason for using that rather than “highways.

Clause 4 - Liability for levy

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I beg to move amendment 2, in clause 4, page 2, line 36, leave out paragraph (b).

The clause goes very much to the heart of the Bill and our discussion on Tuesday. In real terms it is associated with clause 11, which we come to later. Amendment 2 is a probing amendment. It goes back to the discussion, which the Minister referred to, with my hon. Friend the Member for Linlithgow and East Falkirk and others on the Opposition Benches in respect of who will be ultimately liable, and who is likely to be held responsible in terms of the levy.

Subsection (1)(b) states that

“any person—by whom the vehicle is kept is also liable.”

My hon. Friend pursued that question by drawing on an imaginary—even mythical—vehicle that had entered the country, evaded the automatic number plate recognition cameras, evaded the Vehicle and Operator Services Agency, evaded the enforcement authorities on exit and was then brought back in by the same company but with a different driver. In those circumstances, the fact that there was an outstanding levy charge against the vehicle for its previous visit may then rebound upon the company’s new driver, who may be entirely unaware that the vehicle had not paid the levy charge for its previous entry.

Andrew Bridgen (Conservative, North West Leicestershire)

I hear the shadow Minister’s argument, but does he not see an analogy to an incoming Government picking up the previous Government’s debts, then having to repay a deficit that was not their fault?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I am sure that there is. Part of the discussion on Tuesday was about a serial offender who had managed to evade capture but, because they used a different vehicle each time, they were able to arrive and drive on UK roads without facing penalty, whereas a British haulier who was a serial traffic regulation offender would find that some sanctions would be applicable against them because they operate within the UK.

We are asking a straightforward question on clauses 4 and 11 about the person who is liable. The Bill says that “any person” is liable, but in the instance I described, it may be that a secondary driver of a vehicle would be held accountable even though they are just an employee, while the company should be well aware that it has not paid the levy.

The Minister was reassuring in the answers that he gave to my hon. Friend the Member for Linlithgow and East Falkirk in terms of the extreme unlikelihood of that happening, but as we have the opportunity to look at the aspects of the clause, we felt it appropriate to get the Minister to put those reassurances on the record.

Stephen Hammond (Conservative, Wimbledon)

I thank the hon. Gentleman for tabling his amendment. He refers to the liability for the levy. As I understand it, he seeks to remove subsection (1)(b), which makes the person by whom the vehicle is kept, who is potentially the driver, also liable for the levy along with the person in whose name the vehicle is registered—the registered keeper.

The subsection at present makes both parties liable to pay the levy and applies the same principle that is used for vehicle excise duty in section 1 of the Vehicle Excise and Registration Act 1994, which is important because the levy is to be paid in conjunction with vehicle excise duty. In practice, therefore, in most instances, the registered keeper for UK HGVs will pay the levy, since the registered keeper usually pays the vehicle excise duty and the levy will be payable at the same time in a single payment. Having the driver jointly liable, however, gives us more options when it comes to enforcement.

When a non-compliant vehicle is stopped at the roadside, if VOSA cannot obtain a satisfactory UK address for the registered keeper, it may choose to enforce against the driver. It is worth noting that subsection (2)(b) applies the same principle to foreign HGVs, making the person by whom the vehicle is kept jointly liable to pay a levy alongside the holder of the Community licence. The amendment does not cover that. It is important that the enforcement agency has the flexibility to take action against the most appropriate person in the circumstances. In that regard, we will have parity of approach to UK and foreign vehicles.

Michael Connarty (Labour, Linlithgow and East Falkirk)

I have read the clause, and I am quite confused. Clause 4(1)(b) states that

“any person (not within paragraph (a)) by whom the vehicle is kept is also liable”

but clause 11 refers to what happens if

“a person uses a heavy goods vehicle on a road”.

I had assumed that a person who uses a vehicle would be the driver, but the Minister now seems to be saying that the person who keeps the vehicle is considered to be the driver. Which is it?

Stephen Hammond (Conservative, Wimbledon)

I am saying that there is a difference between the vehicle being kept and the registered keeper. That point is clear. In clause 11, where we use the word “uses”, that also refers to the driver. It is clear, therefore, that clause 4 is about ensuring that we have parity of approach to UK and foreign vehicles. The amendment would remove the driver’s liability to pay, it would make payment of the levy more difficult to enforce and it would make enforcement procedures different for UK and foreign vehicles.

Michael Connarty (Labour, Linlithgow and East Falkirk)

I must press the point, because I am still not clear. Clause 4(1)(b) and (2)(b) both state that the person by whom the vehicle is kept is liable, but clause 11 states:

“If a person uses a heavy goods vehicle”.

When would a person using a vehicle not be the person who keeps it, or are they both the same? If so, why do we have two different terms for that? If we are saying that the person who keeps the vehicle is assumed to be the driver, are we sure that that is always the case? I know that there is some expertise in ownership and use of vehicles on the Government side of the Committee; I presume there must be officials in the Minister’s Department who can clarify whether the

“person…by whom the vehicle is kept”

must be the driver, or whether the user is the driver but not the person who keeps the vehicle. It is a very confused use of two different terms.

Stephen Hammond (Conservative, Wimbledon)

It is clear that in clause 4(1)(b),

“by whom the vehicle is kept”

refers to the driver, along with the person in whose name the vehicle is registered—that is the registered keeper. In terms of the usage of the vehicle, that clearly is the driver as well. I am not sure what the hon. Gentleman is pressing. Does he want to try to make his point again?

Michael Connarty (Labour, Linlithgow and East Falkirk)

I am thinking, for example, of the situation in any major Tesco or Asda depot—I have both in my constituency—where there are many vehicles that are clearly not Tesco vehicles; they are owned by contractors or subcontractors. I believe that in one of the subcontractors, Monarch, the driver is often the contracted person. The vehicle they drive could be anybody’s; it could even belong to the company of one of the gentlemen who gave evidence to the Committee, who would be the registered licensees. Presumably, the driver simply drives the vehicle and Tesco is the vehicle’s keeper, because Tesco seems to have such vehicles permanently in its compounds.

Stephen Hammond (Conservative, Wimbledon)

But that is also clear. I think the hon. Gentleman is referring to the person in whose name the vehicle is registered, and that is the registered keeper. That is surely the point he is making, is it not? Dare I say it, by introducing that question he has confused the issue further? The driver could be liable. The liability to pay the levy would also be on the person to whom the vehicle is registered and that is the registered keeper. That is the point we are concerned about. As I have said before, the key thing is to make both parties liable to pay the levy—to apply the principle to both UK and foreign lorries, and to ensure that the provision is capable of being enforced. [ Interruption. ] I sense the hon. Gentleman is about to rise again.

Michael Connarty (Labour, Linlithgow and East Falkirk)

I think I need to because I am asking the Minister for clarification and he is asking me for clarification, and that is very odd and circuitous. I do not think this is clear at all. If members of the Committee just want to get behind the Minister and let him get a Bill through that is confusing, then do so. Do not then look for people in the industry and enforcement organisations to be able to apply it correctly.

If someone pays HGV duty under subsections (1)(a) or (2)(a), fine, we know who that is. Under the relevant clause, the person who drives the vehicle, the user, is clearly defined as the user—that is, the person in the cab making it move when it is stopped or when it goes through a port—and we understand that. But who is the keeper? I am not sure that the Minister has clarified that point. He is assuming it is the driver, but it may not be. Who is the keeper?

Stephen Hammond (Conservative, Wimbledon)

I was simply seeking clarification because I think we got lost in the hon. Gentleman’s constituency—in Tesco and other places. It is clear there would be someone to whom the vehicle was the registered, and that would be registered keeper. Therefore, they would be liable. I was just testing that that was what he was asking about. The offence is “using” or being the “user” of the vehicle if they have not paid the levy. The levy is therefore liable on both the driver, as I have said, and the registered keeper. They are jointly liable. Does that help the hon. Gentleman?

Michael Connarty (Labour, Linlithgow and East Falkirk)

I am going to press the point, because I think the record will show what the Minister said—unless he behaves as they do in the strange Parliament in Scotland, where the First Minister is allowed to alter what is said on the record without telling anyone. I do not think that happens with Hansard here. The record will show that the Minister said in his first speech that the driver was the keeper. Is that the case? Is the keeper the driver in all cases? If so, then say so. People will then know there is no difference between a keeper and a user, because a user is also a driver.

Stephen Hammond (Conservative, Wimbledon)

The person by whom the vehicle is kept is the driver, along with the person in whose name the vehicle is registered, and that is the registered keeper. The offence is actually using an unregistered vehicle, and the enforcement of that offence can be against either the driver or the registered keeper. Does that clarify the position?

Michael Connarty (Labour, Linlithgow and East Falkirk)

Different people?

Stephen Hammond (Conservative, Wimbledon)

They can be and are expected to be different people. There are very few instances where, as we discussed previously, there are owner-operators. I apologise if the hon. Gentleman thought that I had sought to draw the two together. I think that on Second Reading, my right hon. Friend the Secretary of State made the point about the driver and, in my closing remarks, I put on record what he had meant to say. I am being clear that the liability to pay the levy is on the registered keeper. That is the key point.

Julie Hilling (Labour, Bolton West)

I thank the Minister for giving way yet again. I am now further confused, in truth. When we were taking evidence, we talked about the fact that three people could be involved: the person who owns the vehicle; the person renting it from the owner; and the driver, who could be a third, different person. Witnesses told us on Tuesday about an arrangement that is often in place whereby the company operating the vehicle does not own it. Could liability under the clause cover three groups of people or only two? I do not want to confuse matters further, but I would appreciate the Minister’s clearing up my confusion.

Stephen Hammond (Conservative, Wimbledon)

What I sought to do in the evidence session, and will happily do now and in the stand part debate, is stress that the registered owner and the registered operator of the vehicle can be liable to pay the levy, and, as the hon. Lady rightly said, the driver can be liable to pay the levy. So there are three people, and they could be three distinct people, but they might not necessarily be. That is clear in subsection (1)(a), which refers to the registered owner, and subsection (1)(b), which refers to the registered keeper.

On clarifying the position regarding foreign and UK vehicles, subsections (2)(a) and (2)(b) replicate such provisions. Subsection (3) provides that, where two or more people are liable to pay the levy—in other words, where three different categories are involved—they are jointly and severally liable. I hope that provides clarity for Opposition members of the Committee.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I am reassured by the Minister’s detailed explanation of why our amendment would be not only unnecessary but unhelpful. I am grateful to him for his generosity in not labouring the point about my drafting error. The amendment should have referred to subsection (2)(b), not (1)(b), because we are discussing European drivers, not UK drivers. Notwithstanding the dreadful drafting, we have had an interesting debate. I apologise if I did not fully answer the question of the hon. Member for North West Leicestershire but, on the basis of the Minister’s comments, I beg to ask leave to withdraw the amendment.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I beg to move amendment 3, in clause 4, page 3, line 6, at end add ‘, or as soon as the vehicle is roadworthy’.

I am not entirely sure whether this issue was discussed in the Ways and Means debate. However, subsection (4)(b) states:

“if a person recovers the vehicle, the exemption ceases at the start of the day of the recovery”,

in circumstances

“Where a vehicle is stolen from a person liable for levy in respect of it”.

Most of us will have friends, family or business colleagues who have experienced their vehicle being stolen and then damaged during the course of that crime, or perhaps even experienced that ourselves. Under the Bill, if a haulier managed to recover the stolen vehicle and discovered that it was damaged and then had to have it repaired, which could take considerable time, or if they had to write it off, they would be expected to pay the levy until the vehicle was withdrawn from the DVLA’s database. It seems terribly unfair to hauliers who experience such a crime to then be expected to pay for the vehicle while it is sitting in a workshop being repaired. Our amendment would deal with such circumstances.

Andrew Bridgen (Conservative, North West Leicestershire)

I put it to the hon. Gentleman that it would be unlikely for a foreign-registered vehicle to be on the DVLA’s register at all.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

Forgive me—I was using the DVLA as an example. As I understand it, a vehicle is not deregistered in the UK until someone tells the DVLA it has been destroyed or seeks an exemption because it is garaged and they are therefore not liable for the VED. The amendment is designed to probe the question of the fairness of somebody having to pay the levy for a vehicle that is unroadworthy through no fault of their own. We want to make sure that people do not get penalised twice for being the victim of a crime—for something that is completely outside their control.

Stephen Hammond (Conservative, Wimbledon)

I congratulate the hon. Gentleman on his amendment, which gave pause for considerable thought. He is right to allude to a possible unfairness.

The amendment would be to clause 4, which, as I have said, sets out when a person is or is not liable to pay the levy. The clause sets out that a person is not liable for the levy if their vehicle is stolen, sold or destroyed. Subsection (4)(b) states that if a person recovers a vehicle that has been stolen, the exemption from the liability to pay the levy

“ceases at the start of the day of recovery”.

The amendment would add the phrase

“or as soon as the vehicle is roadworthy”.

Two sets of circumstances are relevant here, and I hope to reassure the hon. Gentleman that in each, his amendment is unnecessary.

Subsection (4) relates mainly to foreign vehicles, since subsection (7)(b) provides that subsections (4) to (6) do not apply to UK-registered vehicles. In the case of a UK-registered vehicle, its owner would apply for a statutory off-road notice and then a rebate. That is covered clearly: for UK vehicles that are stolen, the owner applies for a rebate of VED and the levy under clause 7.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

The question of the rebate element was raised on Tuesday in the context of the new structure of payments by UK hauliers. They will be able to claim a rebate on the VED, because if they surrender the vehicle’s tax disc they will get their money back. However, a question was raised about the environmental element and whether owners would get a rebate for that as well. I point out now that we intend to raise that issue when we reach clause 7.

Stephen Hammond (Conservative, Wimbledon)

I am grateful to the hon. Gentleman for early sight of his thought processes and some of the issues we will discuss under clause 7. None the less, I think he will accept that UK vehicles are already covered by the process for application for rebate under clause 7. There is a well-defined process.

The amendment is also unnecessary because if a foreign vehicle were stolen and then recovered in the UK in an unroadworthy condition, it could not be on the road; it would need to remain off the road until it was roadworthy, so no levy would be due. When a vehicle is reclaimed and driven on the road, there is liability for the levy; but there is no liability if it is reclaimed but not driven on the road, because it is in an unroadworthy condition. The Bill as drafted already achieves that aim.

Andrew Bridgen (Conservative, North West Leicestershire)

Surely there is some confusion here. If a foreign vehicle arrives in the UK with the levy paid for two days, is stolen on day one and recovered on day two, has to spend five days in a workshop before it is roadworthy and is only then able to return to port, if there is no mechanism for its owner to tell VOSA that his vehicle has been off the road and in a workshop, it will be assumed that the vehicle has been on the road for seven days, yet he will have paid only two days’ levy.

Stephen Hammond (Conservative, Wimbledon)

But of course, such a person would make that application when he applies for the rebate. He will make the point that his vehicle has been off the road for that period of time, and that is the point at which that argument can be tested. He will not be liable for the days when the vehicle has not been on the road, in the particular circumstance that my hon. Friend describes: he will be liable only for the two days, not seven. He would then make an application under the rebate system.

I hope I have reassured the Committee in the case of both UK and foreign vehicles. After a lot of contemplation yesterday, I think that the current drafting correctly covers the circumstances that merit the exemption. With those reassurances, I hope the hon. Member for Poplar and Limehouse will withdraw the amendment.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I am grateful to the Minister for that clarification. As he is confident that clause 7’s arrangements for a rebate already cover the contingency that I identified as being potentially unfair, and as his explanation is being written into the record, I am happy to beg to ask leave to withdraw the amendment.

Julie Hilling (Labour, Bolton West)

I shall not detain the Committee long, but it seems to me that our debate on who is liable for the levy showed that there is still a lack of clarity over that. As so often happens in Public Bill Committees, the flaws in Bills become apparent only when we have the debate and when it is too late to table an amendment to a clause. Will the Minister consider tabling an appropriate amendment as the Bill progresses? As we have teased out, there are potentially three people involved in the ownership, keeping and driving of a vehicle. The clause does not make it apparent who is liable.

When we were taking evidence on Tuesday, we all expressed concern that we did not want drivers penalised for things that were not of their making, as drivers as employees often are given a vehicle to drive on a certain day, and they do not necessarily know whether levies have been paid, so there needs to be clarity as to whether the clause affects all three people.

Marcus Jones (Conservative, Nuneaton)

The hon. Lady talks about the driver’s responsibilities. Is it not the driver’s responsibility, even if the lorry does not belong to that driver, to ensure that they have sufficient insurance to be on the road? On that basis, if the driver is caught without insurance, they are personally liable. Does that not involve the same principle as the situation we are discussing? The driver, the company or the company that owns the vehicle, if that is not the company that the driver works for, are jointly and severally liable.

Julie Hilling (Labour, Bolton West)

I thank the hon. Gentleman for that intervention, because he raises an interesting point. He is absolutely right that the driver of a vehicle that is not insured is liable if he is driving without insurance. It is interesting, though, that we are introducing a new obligation on companies to look at this in a different way. The driver would see that the vehicle had vehicle excise duty noted on its windscreen, so he or she would therefore believe that that vehicle was being used correctly. I do not want to make a huge point about this, and I certainly would not argue that we should vote against the clause, but it needs tightening up because it is not clear.

Pamela Nash (Labour, Airdrie and Shotts)

Is not our concern not that the driver would ultimately be responsible, but that the driver might be held responsible for a previous driver’s crime of not paying the levy?

Julie Hilling (Labour, Bolton West)

My hon. Friend raises an important point. I will not detain the Committee any longer, but this needs further clarification. We all accept that we are potentially talking about three different organisations within the ownership and the driving of a vehicle. The clause needs to be tightened up as it makes progress. I would not call for a vote against the clause, but I ask the Minister to look at it again to see whether it could be tightened up.

Stephen Hammond (Conservative, Wimbledon)

First, may I say to the hon. Member for Airdrie and Shotts that we will come to that discussion when we consider clause 11, which is about the liability for the offence, as opposed to liability for the levy? I dare say that we will go over some of that again. I hope that I can reassure her, as I tried to do earlier.

I have taken careful note of what the hon. Member for Bolton West said and I will reflect on it. The Bill makes both the registered owner and the operator liable to pay the levy. Under subsection (1)(a) it is the owner who is liable, and in subsection (1)(b) the operator of the vehicle, because the clause provides that any person keeping the vehicle is liable. That is where we got into that discussion. For foreign-registered vehicles, the Community licence holder is liable by virtue of subsection (2)(a), and the person keeping the vehicle under subsection (2)(b). Subsection (3) provides that where two or more people are liable to pay the levy they are jointly and severally liable. We have made that point. None the less, I will reflect on the hon. Lady’s comments.

The clause sets out who is liable to pay the levy in respect of both UK and non-UK-registered HGVs. It makes the point about joint and several liability, and sets out the circumstances under which a person may not be liable to pay the levy. As we explained, those are when vehicles are stolen, sold or disposed of. In those circumstances, a keeper is no longer liable to pay the levy from the date of the sale or disposal, so if a vehicle is used on a UK road after that date they will not be liable for the levy.

We have rehearsed, with the help of the amendment, some circumstances around what will happen if a vehicle is stolen from a registered keeper and subsequently used on a road. The keeper will be exempt from paying the levy from the date of the theft. If the vehicle is recovered, the keeper will again become liable for paying the levy. As I explained when we were discussing the amendment, if it were un-roadworthy for the UK, the keeper could apply for a SORN. A foreign-registered owner would not be liable for the levy if a vehicle had been stolen until they were able to make that vehicle roadworthy again. They could then apply for the rebate.

Perhaps the only thing I did not specify, which I should have specified earlier, is that the definition of a Community licence is provided in the Bill. It is defined as

“a licence issued under regulation (EC) No. 1072/2099 of the European Parliament and of the Council dated 21 October 2009 on common rules for access to the international road haulage market.”

I wanted to ensure that that definition was written into the record of debates in Committee, so it was clear what is meant. With those few remarks, I trust that the Committee agrees that the clause should stand part of the Bill.

Clause 5 - Payment of levy for UK heavy goods vehicles

Stephen Hammond (Conservative, Wimbledon)

The clause relates to UK-registered heavy vehicles only, and refers only to payment of the levy. For clarification, it does not refer to enforcement of the levy, nor the payment of fines.

The clause states that the levy for UK-registered vehicles must be paid for the period the vehicle is required to pay VED, and UK-registered vehicles must have their VED and the new levy paid for periods of either six months or one year.

The levy must be paid at the appropriate rate for the type of vehicle, as set out in table 1, schedule 1, which states the rates payable by vehicle weight band. The levy for one year is shown in the column headed “Yearly rate” in table 1, schedule 1, with stated rates varying between £85 for band A vehicles and £1,000 for band G vehicles. The levy for six months is shown in the column labelled “Half-yearly rate” in table 1, schedule 1, with stated rates being between £51 for band A vehicles and £600 for band G vehicles.

The appropriate weight depends on the band that the vehicle is in, as specified by paragraphs 2 to 4 of schedule 1 and the following tables: table 2 refers to rigid goods vehicles weighing between 11,999 kg and 44,000 kg; table 3 relates to rigid goods vehicles with a trailer over 4,000 kg where the revenue weight of the vehicle is between 11,999 kg and 44,000 kg, and those vehicles may have 2, 3 or 4 axles; table 4 relates to tractive units with two axles, again weighing between 11,999 kg and 44,000 kg.

This is a technical clause. With those remarks, I hope that its purpose and intent are clear. I have referred to and explained the appropriate tables in schedule 1, and I hope the Committee agrees that the clause should stand part of the Bill.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

The Minister has clearly outlined the significance and the details of the clause. On Tuesday, at column 36, I asked Messrs Parmar, Hookham and Semple about reduced pollution certificates, and I raise that issue here because of the impact that those certificates might have, or ought to have, on the levy charge. A moment ago, I flagged up to the Minister the fact that we will return to this point under the rebate dimension in clause 7, because when one surrenders a vehicle tax disc, one gets a rebate for the time not used. Creating a split responsibility—part for vehicle tax, part for levy charge—to overcome the difficulties of European regulation and to comply with the Eurovignette to ensure that we can introduce those charges means that there are two distinct elements that road hauliers are expected to pay.

During the Ways and Means debate and the debate on Second Reading, we asked whether the introduction of the charge—the Minister laid out the detail on the technical elements of the payment when speaking to clause 5—will have a negative impact on those companies that do what they are being encouraged: buy greener vehicles for the sake of our health and of the environment, and to ensure that we can tackle climate change through some of those mitigation measures.

It was clear from some of the evidence taken on Tuesday that hauliers are concerned that the introduction of the charge and the way it has been constructed might have an impact on their purchasing procedures, as that might negatively affect greener vehicles by making them less attractive for companies to purchase.

In Tuesday afternoon’s sitting, I asked the Minister whether he had had time to pause for thought and consider the evidence, and in his usual intelligent way he said:

“I have listened carefully to some of the issues about cost, particularly relating to reduced pollution certificates. I know the response from the Department and I will be going back to look at it.”––[Official Report, HGV Road User Levy Public Bill Committee, 4 December 2012; c. 48, Q112.]

In ministerial code, that means, “I know what I have in my brief and I am sure it is okay, but I am going double-check and talk to officials in the Department to see whether the evidence gives us real cause for concern, and whether the payment of the charges will make greener vehicles less attractive.” It may be too early, because we are talking about only 48 hours, which is relatively short notice on such a technical question, but my reason for speaking is simply to ask whether he has had the opportunity to reflect with his officials on the evidence we received on Tuesday and whether he might share any such reflections with the Committee.

Stephen Hammond (Conservative, Wimbledon)

As the hon. Gentleman rightly suggested, we will discuss the matter at greater length under clause 7. Of course, he knows ministerial-speak better than me, because I have had only a short time to try to adapt to it. However, in the short period between the evidence session and today, I have had initial discussions with officials about the concerns that he mentioned. Dare I say it, but those concerns were raised principally by one gentleman rather than by all the witnesses. None the less, they are significant and we shall no doubt want to discuss them in greater detail.

Suffice it to say that, after some probing, I am convinced that the future of vehicles with reduced pollution certificates is becoming increasingly clear, and I hope that we can reassure the gentleman who gave evidence, and the hon. Gentleman. Such vehicles will be paid a grant, rather than having discounted VED, and I entirely anticipate that that grant will be of the same value as the current discount. Vehicles that receive the grant, as with those that receive the discount, will therefore pay no more, for the most part, when the charging is introduced because the level of the grant will be set against the level of the discount.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I am reassured by the Minister’s comments that the new grant system will deal adequately with the matter, and I look forward to further discussion when we come to rebates, but will he clarify the terms of the grants and when the new procedure will be introduced?

Stephen Hammond (Conservative, Wimbledon)

I will give the hon. Gentleman greater clarity on that point when we discuss it. I anticipate that the grant will come alongside the introduction of the levy—therefore, the two will be co-terminus—but I will check that that is the case before we debate clause 7.

Clause 6 - Payment of levy for non-UK heavy goods vehicles

Stephen Hammond (Conservative, Wimbledon)

It is good to see you in the Chair this afternoon, Mr Amess. I hope you will enjoy the proceedings as much as we have.

Clause 6 runs parallel to clause 5: clause 5 relates to UK-registered vehicles, and clause 6 relates to non-UK registered vehicles. Clause 6 states that the levy for non-UK registered vehicles must be paid for the period that the vehicle

“is used or kept on a road to which this Act applies.”

Non-UK registered vehicles must have the levy paid for a year, or any shorter period chosen by the person paying the levy. In practice, they could pay the levy daily, weekly, monthly, six-monthly or annually. The levy must be paid at the appropriate rate for the type of vehicle as set out in table 1 of schedule 1, which states that the rates are payable by vehicle weight band. The levy for one year is shown in the column headed “Yearly rate”. The stated rate for band A vehicles is £85; for band G vehicles it is £1,000. The levy for the half-yearly rate is between £51 for a band A vehicle and £600 for a band G vehicle.

The levy for a one-month period is shown in the column marked “monthly rate”. The rates vary from £8.50 for a band A vehicle and £100 for a band G vehicle. The levy for one week is shown in the column headed “weekly rate”. That shows £4.25 for a band A vehicle and £50 for a band G vehicle. The levy for one day is shown in the column labelled “daily rate”. It is £1.70 for band A and £10 for band G.

The appropriate band is determined by vehicle type, revenue weight and number of axles as specified by paragraphs 2 to 4 of schedule 1. I am clear that the daily, weekly and monthly levy rates we have set all comply with relevant EU law. The Eurovignette directive states that the daily rate can be no more than 2% of the annual rate and no more than €12. The weekly rate can be no more than 5% of the annual rate and the monthly rate no more than 10%.

To clear up a point that has been at issue previously, non-UK vehicles should pay the levy prior to their arrival in the UK. They can pay via the website or over the telephone.

Andrew Bridgen (Conservative, North West Leicestershire)

Can the Minister explain what will happen if there is a currency fluctuation between the pound and the euro?

Stephen Hammond (Conservative, Wimbledon)

I can indeed, and I will come back to that point in a moment. I was halfway through explaining how the levy could be paid. We intend that it should be paid prior to arrival in the UK. We intend to allow card payments via the website or, as I said, over the telephone. It will also be possible to pay on the ferry on the way over, and of course, as I stated previously, on arrival in the UK by stopping at the port, going on to the website or making a telephone payment.

My hon. Friend the Member for North West Leicestershire asked about currency fluctuations. At the moment, there is an issue regarding the maximum level set by the Eurovignette. The rate is rounded up and adjusted annually for inflation. If the prevailing annual exchange rate changes, some adjustment will need to be made to the rate. However, I do not anticipate that happening at the moment.

As for the matter to which my hon. Friend probably wished he had drawn attention, for states not using the euro, there is also some leeway for fluctuations. However, if there are currency fluctuations, an annual rate will be set under the Eurovignette, and we shall ensure that our charges are compliant with that.

Stephen Doughty (Labour, Cardiff South and Penarth)

The Minister mentioned paying on the ferry. Can payments also be made on the Eurotunnel services or at the terminals at either end of the channel tunnel?

Stephen Hammond (Conservative, Wimbledon)

Yes, if there is connectivity through the tunnel. People could go on to the website via a device suitable for use in the tunnel, and they would be perfectly at liberty to stop at either end and pay. Such circumstances are covered.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I want to refer back to Tuesday’s discussion about payment and enforcement and whether automatic number plate recognition cameras would be adequate. There was a strong body of opinion among those hauliers who were in favour of a visible disc demonstrating that the vehicle levy had paid. The disagreement between the hauliers was surprising, given that ANPR cameras have proved successful in policing and enforcing the congestion charge in London.

When introduced, the ANPR technology was greeted with a degree of scepticism but has proved to be very effective and efficient. It gives the public confidence that no one can avoid paying the congestion charge—other than those who are trying to beat it through criminal means. I was somewhat surprised that the some of the professional hauliers who gave evidence on Tuesday remained sceptical about the effectiveness of ANPR cameras, to the extent that a disc in the cab was promoted by some of the larger as well as the smaller operators.

This issue demonstrates the degree of unfairness felt within the industry about being taken advantage of by European competitors. Hauliers want to ensure that payment of the levy is clearly visible, and that the harshest enforcement measures are available. For their satisfaction and peace of mind, not that of the authorities, the Government, the police or VOSA, if they see a foreign vehicle—given that they do not have the technology to identify whether the ANPR cameras have picked up a transgressor—they want to be sure that it has paid. I can understand that, given how unfairly such people feel they have been treated by Governments for many years.

The success, efficiency and effectiveness of the congestion charge in London, policed and enforced as it is by ANPR cameras, reassures us that such a mechanism is the appropriate way to police the system and make sure that foreign hauliers cannot beat it. Perhaps the Minister can give us even greater reassurance, because I imagine the most likely place to be able to identify such vehicles is at the point of arrival. It was said on Tuesday that, because the ports are in constrained circumstances and such vehicles try to get away as quickly as possible, they might not all be captured, so the VOSA sites outside the ports could catch them. Because the vehicles are coming off in lanes from ships or, as my hon. Friend the Member for Cardiff South and Penarth said, from Eurostar, that is the time when the majority are likely to be identified and captured. If the Minister gave us that reassurance, I am sure it could be communicated back to the logistics industry, whose members clearly still have some reservations about ANPR cameras.

Stephen Hammond (Conservative, Wimbledon)

Like the hon. Gentleman, I was intrigued to hear the need for paper certification being discussed on Tuesday. Interestingly, it was raised by a limited number of witnesses, and particularly by the gentleman representing DHL, which has a fleet on the continent. I thought that significant, for a number of reasons.

When the Eurovignette was initially introduced in Europe, drivers had to show it, but since 2008 a number of countries that have signed up for it have accepted that paper recognition—the disc in the windscreen—is not appropriate as it is not a very effective method of enforcement. Although it may show some people that payment has been made, from the enforcement agencies’ point of view it does not necessarily eliminate the possibility of fraud or the ability to change the disc. The gentleman from DHL said on Tuesday that there are different coloured discs for each day, but it is possible to put a disc of the correct colour for each day back in the windscreen.

Like the hon. Gentleman, I am not convinced that putting a piece of paper in the windscreen would achieve what the Bill seeks to achieve. I am not even convinced that it would reassure UK hauliers. Many of them, as he rightly points out, will have experience of systems such as that for the London congestion charge and will therefore know that they are effective.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

The Freight Transport Association briefing, which I picked up only at lunch time—it was not there when I checked my e-mails at 7 o’clock this morning—says:

“Evidence of payment should be held centrally with the option for a printed version to be downloaded as required.”

For drivers of foreign vehicles, the ability to download a receipt—they would not have to download it—would give them peace of mind. If challenged, they would have the reassurance not only of the enforcement agencies’ ANPR system, but a piece of paper making it clear they had paid.

Stephen Hammond (Conservative, Wimbledon)

Indeed they would, but as the FTA statement that the hon. Gentleman referred to makes clear, the key point is that the record that they have paid will be held at the central database. If a foreign lorry is parked outside West Ham’s ground to deliver the afternoon’s supply of beef burgers for when West Ham ritually beat another side, it is all very well for me or the hon. Gentleman to wander up to that vehicle and challenge its owner, driver or keeper; but it is for VOSA to ensure that the vehicle has paid, not us. An owner or driver can chose to download the receipt and show it, if he wishes. [ Interruption. ] However, as inspiration has just reminded me and as I said earlier, the information will be on the database, and that is the key point.

The other point, which we have discussed—a number of representatives from the logistics industry recognised it as an issue on Tuesday—is the administrative cost, albeit relatively slight, of some form of physical recognition, which would be incumbent upon foreign hauliers in excess of the levy. There are therefore two issues with physical recognition: the sheer propensity for fraud, and the administrative costs.

The hon. Gentleman is, of course, right, and I ought to give him some reassurance about the automatic number plate recognition system. He mentioned the system in London, which we all know works well. He will also have borne in mind the evidence from the two VOSA officials. They intend to ensure that there are cameras operating not only at ports around the country, but at sites such as their major centre at Ashford, which will catch a number of people coming through key UK entry points. There is also the ability to have cameras around the country’s strategic road network and for random stops. As importantly, VOSA made the point that a number of cameras will be focused on the out-lanes as well as the in-lanes at ports to catch people leaving. A quite widespread use of enforcement mechanisms is in place.

Julie Hilling (Labour, Bolton West)

Are there cameras at all the ports of entry? I am thinking about some of the smaller ports. If not, will they be in place in time for the legislation coming into force?

Stephen Hammond (Conservative, Wimbledon)

I cannot answer the hon. Lady with absolute certainty, but it would be my estimation that all the major ports of entry will have those cameras. I would be surprised if every single port, of which there are a huge number and diversity, had those cameras—I am not sure that that is even technically possible—but let us assume there was a small port on the south coast through which a foreign vehicle entered. Almost inevitably, to get to its distribution depot or its delivery, it would be forced to go on the strategic road network and almost certainly it would be caught. However, I am happy to clarify, perhaps on Report or on Third Reading, her exact point. I hope she will accept my reassurance that all the major ports where the vast majority of lorries enter will be covered by VOSA enforcement cameras.

Michael Connarty (Labour, Linlithgow and East Falkirk)

The evidence we got was quite reassuring. I am trying to work out the stage-by-stage logic. If a vehicle arrives at a port of entry, clearly the number plate will be recognised. The driver may or may not have pre-purchased, or purchased in port or on the ship, the necessary levy for the number of days he thinks he will be in the country. If he has not, is there any intention that the vehicle will be stopped at the point of leaving if he has been recognised as entering the port, but not having paid the levy by that time? Will we rely on something further up the road to stop such drivers? I would be much reassured if that happened in an access check at an exit point, and that they could not leave because they had not paid their levy.

Stephen Hammond (Conservative, Wimbledon)

It is my understanding that the whole point of having cameras at exit points—

Michael Connarty (Labour, Linlithgow and East Falkirk)

Forgive me, I may have misled the Minister. I am talking about entering the port—say, a ship coming into Dover—and being recognised as coming on to UK soil, but when a vehicle leaves that port to go on to the roads, will the system be good enough and swift enough to say, “This vehicle is about the leave the port of entry and drive on to the British roads without having paid the levy.”? Or will we have to rely on something further up the road to catch them?

Stephen Hammond (Conservative, Wimbledon)

I have spoken to VOSA about that, and I hope that the VOSA evidence to the Committee was clear about it. VOSA absolutely intends to talk to ferry operators. As someone comes off the boat and comes into the UK, they will be identified at the port and stopped. There are some instances where the volume coming through might mean that they cannot be caught, which is why VOSA has made the point that, certainly for the biggest ports, they will have major stopping points a few yards further down. So absolutely, the intention is that there will be the toughest enforcement possible.

Clause 7 - Rebate of levy

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I beg to move amendment 4, in clause 7, page 5, line 19, leave out subsection (5).

I suppose that, as a courtesy to you, Mr Amess, as a fellow West Ham fan, I should point out that the Minister referred to West Ham United because, this morning, we mentioned West Ham’s victory against Chelsea on Saturday. I say that in case you were confused and thought that the Minister had suddenly converted to being an east Londoner like us. There you go.

Amendment 4 is probing. We raised a straightforward question a number of times during our consideration of the Bill and the Ways and Means resolution, specifically at column 863 of the Official Report on 23 October. Clause 7(5) says:

“The Secretary of State may specify conditions with which a person must comply before making an application for a rebate.”

First, the question obviously is, why does clause 7(5) say “may” rather than “shall”? Surely there would be an expectation that conditions would be laid down for the application of a rebate. Given the detail in the Bill about the potential of rebates in terms of criteria, length of time, validity and so on, I imagine that guidance must be available to those who would want to claim in the event that they conformed to some of those criteria. We would have thought that the Secretary of State would automatically lay down conditions, for the avoidance of any doubt. That is why we tabled the amendment.

Stephen Hammond (Conservative, Wimbledon)

I am grateful to the hon. Gentleman for tabling this probing amendment. I hope that I can offer him reassurance.

Clause 7 sets out the conditions for providing rebates. Subsection (5) provides the power for the Secretary of State to specify conditions with which a person must comply before making an application for a rebate. The amendment would remove that power.

It is important to retain subsection (5) for administrative purposes. It means that the Secretary of State—or, in this or some other cases, the Driver and Vehicle Licensing Agency, the supplier of the system for foreign operators—will be able to set conditions around making applications for rebates—for example, timing and how to submit claims. Without that power, it is possible that those sorts of operation may be adversely affected.

The Bill obviously gives indications of conditions that will need to be met to obtain the rebate, and they are specified in subsection (6). Although that subsection provides only some detail of the requirements—I accept that—we deliberately do not wish to prescribe the conditions too tightly, as there may be changes in the way that documentation is needed—for instance, to demonstrate when a vehicle was stolen or recovered, or evidence that it was stolen. Also, the way that evidence should be supplied may change over time. Therefore, overly prescriptive requirements could also be interpreted as being difficult to administer and potentially discriminatory in the future.

For UK operators, the rebate requirements are exactly the same as the rebate requirements for vehicle excise duty. The rebate requirements for foreign operators will have an impact on the procurement of the payment system for foreign operators. We will ensure that during that procurement process the requirements specified will always be reasonable and, where possible, similar to those that UK operators will have to comply with, and therefore not be overly bureaucratic for operators.

This subsection is about the administration of the rebate and it is not intended to give the Secretary of State significant powers over what qualifies for a rebate. In particular, the formula setting out the amount of the rebate, which is the most important thing for the operator, is in the Bill.

On the point about “may” rather than “shall”, the intention is to give the Secretary of State slightly greater discretion over the issues I talked about. I accept that “shall” could have been used, or could still be used, but “may” covers it. I trust that, with those reassurances, the hon. Gentleman will withdraw his amendment.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I am reassured by what the Minister has said. I beg to ask leave to withdraw the amendment.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I want to return briefly to rebates and the surrender of such. I seek further reassurance and consideration from the Minister in respect of the VED reductions for cleaner vehicles. The point was made that fleet hauliers might be deterred from purchasing cleaner vehicles because of the way the levy and VED will be put together. On the subject of rebates, I want reassurance that, given the surrender of VED is straightforward and everybody understands it, the surrender of the levy certificate will be equally straightforward, and hauliers will be able to reclaim what is no longer required because the vehicle is no longer in operation. Will the Minister comment on those aspects?

Michael Connarty (Labour, Linlithgow and East Falkirk)

I have been looking at a way to make things entirely equal between the UK and the foreign vehicle owner. I have some disappointment that the measure will not bring in such a huge amount of money that it would reduce the cost to the HGV levy payer in the UK. It would be wonderful if it did.

Constituents of mine have put farm vehicles in a park, thinking that they were off the road, but they have suddenly found themselves fined by VOSA for not going through the SORN process for that vehicle, even though it has no wheels, has become a receptacle for animals and in no way moves.

I am concerned about someone who has put an HGV vehicle off the road, under the description in clause 7(2)(c), having paid the full yearly HGV amount and possibly a levy. I wonder how they can get back as much money as possible, if they do SORN. If they have not paid more than one month—one month to claim back—they cannot claim anything back.

Presumably, a foreign vehicle in the same situation that has just been immobilised in some way would be in a better position. Such persons would not be coming into the UK so they would not buy a levy. They would be on a level playing field—they would not have any outlay to lose—whereas a UK HGV owner would have an outlay they could not recover unless they had more than a month to claim back. That seems slightly unfair and not to the advantage of the UK levy payer.

Stephen Hammond (Conservative, Wimbledon)

I am not sure that I entirely follow the hon. Gentleman. If I understand him correctly, his point is about the difference between a UK haulier whose HGV might laid up, but who might not able to claim because he had paid the whole levy but wanted to reclaim it after a month, and a foreign haulier who might not. Surely, is not the point—I think this is what the hon. Gentleman meant, although I might have misunderstood—that, if the foreign haulier had not brought his lorry to the UK, he would not be within—

Michael Connarty (Labour, Linlithgow and East Falkirk)

That is obvious, but the UK haulier would not be using it on the roads either, so they would have paid a levy for road use that they would not be able to use, so it is the same—why do they not get it all back?

Stephen Hammond (Conservative, Wimbledon)

There is a complex formula for calculating the levy, which means that—

Michael Connarty (Labour, Linlithgow and East Falkirk)

Tenths.

Stephen Hammond (Conservative, Wimbledon)

Yes. Potentially, if the levy were paid and a rebate of the levy were claimed within the first month of having paid it, the repayment of the levy might be somewhat larger. Also, rebates cannot be claimed for periods under a month, so there is no advantage to a foreign haulier in that regard. I think that that is what the hon. Gentleman is driving at.

Michael Connarty (Labour, Linlithgow and East Falkirk)

I am driving towards that, but why not twelfths? Why not less than twelfths? What is the problem? If the Minister has been told, or the calculation having been done, that if the administration is anything less than one twelfth it is more expensive than the money to be returned, I can see the logic, but it has not gone in that direction, because someone has chosen tenths.

If the levy is paid by an HGV user in the UK who thinks that they will be on the road, but then they are not on the road, they might lose up to one tenth of that claim. If all they needed to claim back was one twelfth, they would not get it back because it has to be one tenth; it has to be above one twelfth. That seems slightly unfair to the UK haulier. I am looking for something that is much more beneficial to the UK haulier, as well as putting an adequate imposition on a foreign haulier.

Why is the figure not twelfths? Why is it not one week? Is that an economic calculation or just a figure plucked out of the air?

Stephen Hammond (Conservative, Wimbledon)

I hope that I can help the hon. Gentleman. In all cases, the rebates are available for whole outstanding months of the levy remaining. The rebate calculation is such that for an annual levy it is different, because the charge for an annual levy is cheaper in the first place, as it costs the equivalent of 10 months. If we were to allow someone to try to claim after one month, they would, as I perhaps inadequately explained earlier, get a greater sum back. That is because the annual levy is a discounted amount, as opposed to others.

I apologise for my earlier explanation being inadequate. The clause provides for the rebate, and states who is entitled and in which cases.

Clause 8 - Exemptions and reductions

Stephen Hammond (Conservative, Wimbledon)

The clause exempts from payment of the levy certain rigid goods vehicles that pay VED at the basic goods vehicle rate and provides a power for the Secretary of State to make regulations that may exempt certain categories of HGV from paying the levy. I want to make it clear that the vehicles that are excluded from the levy by clause 8(1) are excluded because they are subject to paragraph 9(2) of schedule 1 of the Vehicle Excise and Registration Act 1994, with which I know all Committee members are terribly familiar, or will be by the end of consideration in Committee.

Those vehicles are showmen’s goods vehicles and islands goods vehicles—those restricted to doing their work on small islands—and vehicles loaded only in connection with a person learning to drive or taking a driving test.

Vehicles using a trade licence are exempted under section 11 of the 1994 Act. Essentially, that trade licence is used only when a vehicle is being transferred from the ownership of one person—the registered owner or keeper —to another. Therefore, it seems appropriate that they should be exempt from the levy.

I wanted to ensure that the Committee understood those exemptions.

Stephen Doughty (Labour, Cardiff South and Penarth)

The Minister will forgive my lack of familiarity with the 1994 Act and the details of the exemptions. Will he clarify whether HGVs used by our armed forces are included, particularly given the pressure on their budgets at the moment? I am thinking also of supply and logistics vehicles that transport heavy goods to and from bases.

Stephen Hammond (Conservative, Wimbledon)

Despite the hon. Gentleman’s unfamiliarity with that Act, he asks an interesting question to which I cannot give a definitive answer. I apologise, but I will write to the Committee to ensure that I answer that question fully. I hope he will take my assurance on that point.