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Labour's war on motorists starves our roads of investment

Speaking to the Retail Motor Industry Federation at the Intercontinental Hotel in London this evening, the Shadow Secretary of State for Environment and Transport, Tim Yeo MP said:

"Not all our difficulties in 21st century Britain are down to government, but, alas, many of them are.

For the past seven years, the Labour Government has been conducting a war on the motorist. The declaration of war was made by John Prescott, whose enjoyment of his two Jaguar motor cars was matched only by his determination that no-one else should drive on Britain's roads.

Under Labour, Britain's road building programme has ground to a halt. Not a single inch of new road has been added to the UK's motorway system. And although John Prescott's much vaunted Ten Year Plan announced in 2000 that road congestion was to be cut, in practice it has got worse.

According to the same Plan the maintenance backlog on local roads was to be eliminated, in practice that target has been dropped. The result is our roads are more congested than ever before; so congested, indeed, that we seem less like the world's fourth-largest economy and more like the most inept banana republic.

And it isn't as though we're not paying for improvements. After seven years of the war on the motorist, the burden of taxation borne by your industry and its customers has never been higher.

Labour has starved our roads of investment, urging us to stay at home and use the internet, or to improve our physical fitness by riding bicycles.

The Nanny State may provide us with an after-dinner source of amusement, but it is no way to run an advanced, competitive economy. An efficient road transport system is vital to our national prosperity and well-being. It enables goods and services to flow. It liberates individuals and families.

On the roads we travel and the vehicles we drive, we are entitled to the best. The Government's failure to provide this puts Britain at a huge commercial disadvantage against our European competitors and deprives our families of one of their basic freedoms, freedom of movement.

Since I took on my present role three months ago, I have been examining Britain's road-building programme closely. My conclusion is that there is no reason whatever why the next Conservative government should not take our road network forward again.

We can get Britain moving with an imaginative partnership between the public and private sectors. The Midland Expressway, planned under the Conservatives, is an excellent example of how such partnerships can work. Over 10 million vehicles have now used it. In August, it carried 55,000 cars a day, one of them mine.

But this is the sort of initiative Labour has refused to build on. Philosophically, they believe that all of our national infrastructure should be state-owned. They have frightened off private-sector investors from doing business with them, because the private sector has no confidence in Labour's long-term intentions.

This Government has bloated the public sector, while squeezing jobs and investment in the productive part of the economy. It has destroyed the pensions of millions of people, taking more than £35 billion from the corporate pension sector. It sees the world of business as a milk cow to be exploited at every turn.

Under Labour, it's not enough to collect the taxes. Business is also forced to comply with an increasing burden of regulation, some from Brussels, some gilt-plated by bureaucrats in Whitehall, some imposed unilaterally by Gordon Brown's Treasury, and much of it with little or no benefit to the UK economy or consumer. I know for example that car dealers now fall within the ambit of the FSA if they want to sell insurance as part of a consumer credit package.

The Conservative approach is different. We have already identified a host of areas where we can turn back the tide of regulation. And the James Committee, set up by Michael Howard, has already published concrete proposals for reducing waste and over-manning in the public sector.

My aim, in the fields of transport and the environment, is to build on these proposals. To do this, I have two main priorities.

First, I want to see an infrastructure, an environment and a tax regime for motorists, which will enable business, industry and individuals not only to prosper, but to enjoy a cleaner, safer Britain.

Secondly, I want to encourage a fair balance between the interests of manufacturers, retailers and consumers, - a balance that can only be achieved if Government understands that its job is to provide vision and strategy, and not micro-management.

We will be firmly on the side of the responsible motorist and all those businesses who meet that motorist's needs. But I make no bones about being a strongly committed environmentalist too. The trick will be to harness the new technology, as the industry has already started to do to cut pollution without inhibiting people's freedom to use their cars.

I'm an optimist about this. I believe we can pull it off. The prize will be a big one. Those industries and those companies which adapt to the new and more environmentally demanding standards which will gradually be set will reap a big commercial advantage at home and abroad. And I warmly commend the steps which the industry has already taken in this direction.

Our task will be to develop modern transportation systems that deliver not only shorter journey times, but greater safety, cleanliness, renewability, quietness and visual appeal. So we need a strategy that links infrastructure and industrial engineering with environmental gain.

High on the list of environmental challenges is the need to reduce carbon dioxide pollution, to meet the obligations of Kyoto and beyond. Government, industry, the universities and the UK Research Councils, all need to be brought together in a national effort. The development of new-generation, low-CO2 vehicles, first hybrid and then advanced, is an important priority.

I am sure that an imaginative tax regime, covering the VED charge, petrol prices and benefit-in-kind business-user taxation, can and should be an important incentive in stimulating the use of greener cars. I should be interested in your views on how the tax system can be used to encourage greener cars. Should, for example, we consider variable rates of VAT on new car prices as a way of stimulating demand for the least polluting vehicles? Since it's vital that there is no increase in the overall burden of taxation and especially on the poor old motorist those of us who want to help create a greener Britain will make sure that carrot features as much as if not more than stick.

To the members of the RMI Federation, I say that new technology has always been a powerful driver of sales, and I believe this will be an opportunity from which you can profit.

Last year, in the UK as a whole, nearly 2.6 million cars were sold, up by only 0.6% from 2002. Many of these sales were achieved at the price of increased discounts and price promotion, and in the face of competition from parallel imports.

It will be good for your members to move forward from this plateau, but only good for the nation, if we create greater capacity and greener vehicles.

It will be better for your members and for consumers, if we can continue to liberalise the market, giving retailers greater control over their gross margins and consumers greater information on pricing and specification.

In all these areas, I advocate government with a light touch. In my experience, the business community, in dialogue with government and consumer organisations, makes more progress through voluntary codes of practice, than Whitehall mandarins do through regulation.

Recently, I read with great interest the Report of the House of Commons Trade and Industry Committee into the UK Automotive Industry in 2004, published just two months ago. It sets out many of the issues currently facing your Federation and its members.

How effectively is the Supply of New Cars Order working?

Are the revisions to the block exemption rules achieving the desired result in opening up the market?

Is the application of bulk discounts being operated fairly in the marketplace?

The Report suggested that dealers, on average, have a margin of about 10% from the motor manufacturers, out of which, in practice, they might make 2 - 3%.

In a sector where operating margins are narrow, it is understandable that dealers should try to make up some margin through their charges for vehicle servicing. But the Consumers' Association argues that the price differential between repairs carried out in France or Germany is too high compared with those in the UK.

Are they right about this?

How effectively is the Government's CarWise scheme working?

Is the grant of Authorised Repairer status achieving what was intended?

Or, however worthy the intentions, are we faced with regulatory overkill?

As the House Committee Report says: "We fail to see … how specifying the type of carpet tiles required in [dealers'] reception areas can be judged to impact on the quality of servicing and repair that a garage offers."

All these questions underline the importance of the RMI Federation. And you, as members of the Federation and with your particular business experience, are among the best qualified to debate them.

That is why we need a strong voice of industry, both through your Federation and through other trade and industry bodies throughout the country. Indeed, one of my great regrets, in looking at the shape of British industry today, is that the voice of industry has been diminished by the Labour government.

Of course, Labour is skilled and seductive players in their pursuit of power. They are good at tempting leaders of industries with offers of discussions at the top table.

But in practice, this is a government with a traditional central planning agenda. Whitehall rules and its regional programme are driven by the Regional Development Agencies. The voice of business is diminished.

The next Conservative government will change this. We will listen to business and recreate our partnership in government. Together with the private sector, we will rebuild our infrastructure.

We are not ashamed to say that we will be the friend of the motorist and those who supply them. We will do this and, at the same time, meet the objectives we all want to achieve for a fairer, greener, more prosperous Britain.

I am honoured to have been invited to address you this evening and I wish you all every success in the coming year."

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