---

Road Users (Taxes and Charges)

I will happily deal with that subject in a moment, because the elements are linked. The traditional policy of Conservative Governments, and to some extent of the current Government, has been to use scarce public money to build our way out of congestion. That is an attempt to wash away the waves on the beach: it simply will not work, as evidenced by the increasing congestion throughout the country. Therefore, we must find a different way to deal with congestion. Charging in a sophisticated way for the road network is a good way of tackling congestion. It is interesting to note that business organisations, including the CBI and the British Chambers of Commerce, support the idea of road pricing if it is introduced in a way that is fair to the motorist. That is what I am suggesting. In return for the introduction of road pricing on motorways and dual carriageways, I suggest that the fair, equitable response for the motorist would first be to abolish VED, which is a tax on the ownership of vehicles and therefore unjustified, and secondly to reduce fuel duty. There would be no net take from the motorist in the scheme that I propose, but the motorist would be encouraged first to make a modal shift to rail, because by and large, the motorway and trunk road network will parallel the rail network—not exactly, but there is a close fit. Secondly, motorists would be encouraged to shift from dirtier to cleaner vehicles, because they could save money by doing so. Thirdly and most importantly—this is a concern to rural Members and, although there are none in the Chamber now, to the Scottish Nationalists—such a scheme would be rural-proofed, because those in remote rural areas where there are no motorways or dual carriageways simply would not pay, but they would benefit from the abolition of VED and the reduction in fuel duty. That would be an equitable policy. It would allow people to choose their mode of transport and the car they drive, and to save money if they wished. Interestingly, as I said, if such a scheme were revenue-neutral, it would be supported by business organisations. I believe that a British Chambers of Commerce report due out shortly will reaffirm that. As the hon. Member for Liverpool, Riverside will be aware, Sir Rod Eddington told the Transport Committee in 2009 that road pricing was, for him, "an economic no-brainer." In answer to the hon. Member for Scarborough and Whitby (Mr. Goodwill), the Conservative spokesman, he said that he thought road pricing could reduce new road building by 80 per cent., so there are other advantages of such a scheme for the public purse. I stress that that is not the only policy that the Liberal Democrats wish to introduce to benefit the motorist. I was taken by the references in the Committee's report to the proposals in the Netherlands, which are similar to mine, although they are made on a slightly different basis. The Government response on the question of road pricing has been vacillating. They have said that they do not want to say very much about the matter for the time being—no doubt until they get past the election—and they are like a rabbit caught in the headlights. They did start a research programme and demonstration project in February 2009, and in their response to the Committee they say that they are working to further their understanding of the scheme. It would be helpful if the Minister could say exactly what progress has been made by the demonstration project, what issues have been raised, and when they expect to make a more detailed response to the Committee and to Members. It is very important to use taxes and charges not simply to raise money for the public purse for good causes such as schools and hospitals—although they must be used for that, too—but to achieve environmental ends. I do not believe that the present arrangements for VED, tax and ownership, with a fuel duty that discriminates against rural areas, achieve those ends. A road pricing scheme could achieve those ends, and I encourage the Government and others to move in that direction.