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CM interview: Treasury minister Danny Alexander – the full transcript

  • 28 March 2013
  • By Laura Hailstone

As part of the special edition of Commercial Motor this week (28 March), guest-edited by FairFuelUK founder Peter Carroll, CM was granted an interview with chief secretary to the Treasury, Danny Alexander, the day after the Chancellor revealed the Budget

Interview date: Thursday 21 March 2013
Location: HM Treasury,
Time: 11.15-11.25am

Commercial Motor (CM): Are you aware of how much of an issue fuel duty is for the licensed road transport operators in the UK?

Danny Alexander (DA): I’m very aware of it. I’ve had haulage operators in my own constituency raise this issue with me. I know that if you’ve got a modest fleet of vehicles it can be tens of thousands of pounds, £50,000 even, of cost to your company over the course of a year depending on how big you are. The price of fuel and the tax element of that is a hugely important issue.

I’ve got one company [in my constituency] – don’t know if they’re readers of yours – who are a parcels delivery company and they operate across the highlands. They’ve got a fleet of vans, and this is, alongside the cost of their staff, their biggest business cost. These are the companies and vehicles that are getting products and goods to people across the whole of the country. They are the arteries or the blood of our economy.

CM: From January alone this year we have reported on about three or four haulage companies going bust every week because of the high cost of fuel…

DA: I know a lot of companies are operating on very tight margins, and that’s one of the reasons why I’ve been such a strong advocate within government of the measures we’ve taken on fuel. Obviously I represent constituents in the Highlands of Scotland so I’m very aware of the impact high fuel prices have on people and on businesses. In my constituency people drive long distances and fuel prices are actually higher on average than in the rest of the country and there are very few public transport alternatives, so it affects everybody.

We inherited this fuel duty escalator from our predecessors. As a result of the decisions we took yesterday [in the Budget], we will have kept fuel duty flat for three years, and we took it down by a penny at one stage. So I hope that sends a message that we understand and care about the impact this has on our economy.

CM: FairFuelUK (FFUK) has commissioned two reports, the most recent being the one by the National Institute of Economic Social Research (NIESR) which showed that cutting fuel duty would stimulate growth in the economy and create jobs. While yesterday’s freeze on fuel duty is very welcome, what evidence does the Treasury need to see, before you would consider cutting fuel duty?

DA: There are two things to say. Firstly, we’ve engaged in a very productive discussion with FFUK; looking at their report, they’ve come in here and met with Treasury officials and myself and talked about it, and we’ll be having more such meetings. I think there are some assumptions in the NIESR report that the Treasury considers to be pretty questionable; I don’t necessarily buy the analysis to be honest. But we’ll continue to debate and discuss that with them.

CM: Ok, but it is based on a world-recognised robust financial modelling….

DA: Yes it is and there are some important bits of evidence in that report, but if we’re going to get to the bottom of this we need to make sure it’s done based on the best analysis we can do. And that’s why I’ve opened the door of the Treasury to the FFUK campaign to have this discussion and debate, because I really want to understand what the truth of it is.

But the second point is a much more straight forward one. As a country we have big economic problems, big financial problems. We’ve come together as a coalition government to fix the country’s financial problems. That means that every tax cut or every bit of extra spending has to be paid for. It has to be paid for with tax rises or spending cuts elsewhere. I think the decisions we’ve made have got the balance right. There are lots of people in different parts of our economy saying ‘why don’t you cut this tax or that tax’, and I understand completely why people argue that, but what they don’t necessarily say is what other tax should go up to pay for it. It is a balancing act.

CM: Would the Treasury look more favourably on cutting fuel duty when the economy is in a more stable position?

DA: I would have to consider those arguments as and when the time arises. Our priority has been to cut income tax for working people, which by the way is a benefit to people in your industry as well as everywhere else. I hope the employment allowance we announced yesterday, which is a national insurance break for businesses, will make a difference to businesses in this sector as well. But the priority has been to put more money into peoples’ pockets, so the income tax cuts, the freeze of fuel duty all help to do that. I think that’s the right priority, but in terms of what further tax cuts we may make, I can’t comment on that now really.

CM: How has the Treasury’s view of the road transport industry changed over the course of the FFUK campaign?

DA: I think the FFUK campaign has helped to open up a lot of contact. We’ve had a lot of emails and letters from people who are part of the campaign, which is very valuable because it brings in evidence. I actually think from a Treasury minister point of view, both myself and George Osborne have been very conscious throughout our time in government of these issues. I know about my constituents’ concerns and George has similar experiences in his part of the country. And it’s been good to be able to make sure that the Treasury machine hears those arguments as well.

But I have to say the FFUK campaign has been one of the most consistently effective campaigns in terms of lobbying and getting the message across of any campaign I’ve dealt with.

CM: There’s a school of thought that says that essential users of UK roads should pay a lower duty, such as trucks, in the same way that buses do for example. This would help level the playing field with foreign hauliers and ease the whole burden of duty. If it was proven that giving an essential user rebate to licensed UK hauliers would boost the economy, is that something you would be open to looking at?

DA: I’ll always listen to representations that are made but I’m certainly not going to commit to anything. Not least because I think that actually what we don’t need is to make our tax system more complicated. We need to make our tax system simpler. During Labour’s time in office the tax code tripled in size and lots of well intentioned reliefs and so on [were introduced], but it does make the tax system much more complicated to operate. That’s something I would worry about in that context. But yesterday we did again freeze VED for HGVs for example. The [HGV Road User] Levy comes in next year and that is designed to level the playing field between UK and foreign hauliers…

CM: It goes some way to levelling it but not the full way…

DA: I think it does and I know it’s been welcomed by the industry and I’m grateful for the support we’ve had for that. But I think that’s the right mix – not looking at ever more complicated tax reliefs …of course, if people put ideas to us we’ll look at them but that is one thing that would worry me.

DA’s press secretary: Last two questions now….

CM: A big problem aside from fuel duty at the moment for our readers is the huge number of pre-pack administrations that have been taking place in our sector. It seems to be used as a vehicle for failing businesses to just wipe off a lot of debt and start again. Would you support a change in legislation that would prevent existing owners of a business from reacquiring their own failed business and starting again?

DA: I appreciate the sensitivities of this issue, and in a sense the rules are there to try and enable people to get back on their feet and get started again. There’s a consultation going on at the moment looking at these rules and I would urge people who have ideas or worries or concerns about it to respond to the consultation and we will listen very carefully to what people have to say.

CM: You’re arguably the most powerful politician Commercial Motor has interviewed in the last two decades; what would you like to say to our readers?

DA: Oh really? Well, thank you for the work that you do to keep our economy moving. Your readers and this sector is one of the most important for making our economy work efficiently and effectively.

CM: Have you ever visited a road transport operation?

DA: Yes I have. I mentioned the one in my constituency, AJG Parcels. Adrian Gray who runs it is someone I talk to quite regularly. I’ve visited other haulage companies in my constituency as well but I’m always open to invitations!

CM: We can certainly set something up with any of our readers so just let us know…

DA: That’s very kind of you. Thank you. And it was good to meet you.

CM: Thank you for your time minister.


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