HC Deb 06 July 1971 vol 820 cc1214-37
Mr. James Allason (Hemel Hempstead)

I beg to move, Amendment No. 1, in page 3, line 8, after 'values', insert: 'of the cost of conversion'.

Clause 2 subjects gas fuel to the equivalent rate of fuel tax as is charged on petrol. The first motor gas station outside London has been established at Hemel Hempstead. This is a very interesting process. It is necessary to have a car converted and then the motorist can use petrol or can switch over to gas fuel. The great merit is that the gas fuel is very much cheaper than petrol and a considerable number of my constituents have already converted to the system. The disadvantage is that there is a cost of about £120, depending on the vehicle, for conversion. The effect of the Amendment is to take account of this conversion cost.

If no account is taken then no one in their right senses would ever pay out £120 to burn fuel which costs the same as petrol. The result will be that investment in these gas stations will be lost and there will be no development of a useful alternative fuel, which ought to be encouraged. There is the possibility of using North Sea gas thus avoiding the importation of petroleum products.

The second argument in favour of this system has to do with pollution. There is no smoke, sulphur or lead emitted from this gas. There may be some carbon monoxide; opinion is divided on that. But it is a great improvement on petrol or diesel. Another reason why the fuel should be encouraged is purely from the point of view of diversification. We cannot tell what the future holds. Why should we go on using petrol or that disgusting fuel, diesel?

In Committee the argument of the Minister of Stale was that it may be that in future all vehicles will have to absorb the costs of anti-pollution measures and that these converted vehicles were absorbing the cost a little earlier. We must recognise that this is a dual-purpose vehicle using petrol or gas and as the petrol engine of the future is improved from a pollution viewpoint the cost of that will be additional to the cost of any conversion. That argument therefore falls to the ground. This does not deal with the position of those who have converted. If the spirit of this Amendment is not accepted, it will not only be grossly unfair to a growing industry but also appallingly unfair on those who have already spent this considerable sum.

8.15 p.m.

Mr. David Marquand (Ashfield)

The hon. Member for Hemel Hempstead (Mr. Allason) pointed out that one of the advantages of liquefied petroleum gas was its anti-pollution qualities as compared with other fuels. It is to that aspect of the case, which took up a good deal of time in Committee, that I should like to address my remarks. It seemed to us on this side of the House, and also, I think, to many on the other side, that the replies we received from the Minister of State in Committee were unsatisfactory. We have tabled an Amendment rather broader in scope than the Amendment moved by the hon. Member for Hemel Hempstead, which has not been selected. I warmly support the hon. Gentleman's Amendment.

It is fashionable nowadays to pay lip service to the need to counteract pollution of the environment and the atmosphere. But lip service is not enough. It is becoming increasingly clearer, that the problems of pollution can be dealt with only by positive and deliberate Government action. Among the forms of action which can be taken to combat pollution, one of the most important items must be deliberate fiscal discrimination. Because of that, we were so distressed by the attitude which the Minister of State expounded in Committee. If the taxation system is to be used deliberately to further the cause of anti-pollution there must be times when considerations of revenue and even considerations of equity, as between one taxpayer and another, or between one taxable product and another will be over-ridden by other considerations.

In Committee the Government gave little sign that they recognised this. On the contrary, they gave the clear impression that the consideration uppermost in their minds in putting this Clause into the Finance Bill was a revenue consideration. They saw a chunk of revenue escaping from their grasp and they wanted to make sure that it did not slip away. In discussions between Customs and Excise and representatives of the trade, which took place at the beginning of May, the Customs and Excise representatives began by saying that the main reason for including Clause 2 in the Finance Bill was a consideration of revenue and fiscal equity. The Minister of State made the same point.

It is true that in the debates in Committee the Minister also said that he did not feel that liquefied petroleum gas possessed the advantages claimed for it in anti-pollution terms. In particular, the Minister argued three points. He said that petrol engines could be converted at a cost which worked out lower than the cost of a liquefied petroleum gas conversion, and that when they were converted in a way that would prevent them from emitting toxic fumes, they would be better than liquefied petroleum gas engines. Secondly he said that L.P.G. has no advantage over diesel from the pollution point of view.

Thirdly, he used an argument which seemed to many of us the oddest of all the arguments, that if we were to encourage the use of L.P.G. on the roads by giving fiscal discrimination in its favour we would prohibit its use by industry and this would militate against the cause of preventing pollution, since the use of L.P.G. by industry ought to be encouraged. He said that what we should be concerned with was not just pollution on the roads but pollution as a whole, and that if we worried too much about pollution on the roads and not worried enough about pollution as a whole, we would be making pollution as a whole worse. I must say that I personally, on due reflection, find the arguments which were put forward by the Minister of State unconvincing.

Customs and Excise itself recognised when it discussed the whole matter with the representatives of the trade that there is no immediate prospect of large-scale conversion of petrol engines in the way that it implied was possible. The point about diesel has been answered quite satisfactorily by representatives of the trade who say that although it is true that diesel engines do not emit so many toxic fumes, they do emit smoke and this can be very damaging indeed to health.

Surely the argument that if we encourage the use of L.P.G. on the roads we shall somehow prevent its use in industry seems implausible indeed, because I gather from representatives of the trade themselves that L.P.G. does not compete with pollutant fuels used in industry. This is what representatives of the trade themselves say. So, if they are correct in that statement, that is an irrelevant argument. In any case, even if it were the case that L.P.G. competed with pollutant fuels in industry, it does not seem clear to me why we should be less concerned with pollution on the roads than with this rather nebulous concept of pollution as a whole. Pollution on the roads is a very important part of pollution as a whole and a very dangerous, damaging part of it. So I do not find the argument which the Minister of State used in Committee at all convincing.

I am not trying at this point to commit myself firmly and 100 per cent. to the view of the representatives of the manufacturers. That would clearly be a mistake. I am not a technical expert. Very few of us in this House are technically competent to judge between the arguments which are put forward by the manufacturers and the arguments which are put forward by the Government. I suspect that the Minister of State himself is not competent to judge on the technical argument; he simply has to accept the advice which is given to him. What I do say is that the technical arguments which were put forward by the Minister of State in Committee are clearly not proven. They may be right, but they are not proven, and in the absence of solid and incontrovertible proof I see no reason whatever why the Minister of State should not accept the Amendment moved by his hon. Friend.

The Amendment is an extremely moderate, modest little Amendment. It does not force any rate at all upon the Government. All it says is that among the relevant considerations which the Bill already says must be taken into account should be included the cost of conversion. That is all the Amendment does. It does not pin the Government down to any precise figure. If the Government were able to accept this Amendment they would go a long way to alleviating the anxieties which were created by their attitude in Committee, and they would show that they are at any rate prepared to take seriously the representations which have been made to them and that they are prepared to look again at the technical arguments. If they are, finally, convinced that L.P.G. does have advantages which have been claimed for it and that their technical and scientific advice has not been entirely accurate they will be able to change their mind when they bring in the order which the Clause empowers them to bring in.

I hope very much indeed that the Minister of State will find it possible to accept the Amendment. I can see no reason whatever why he should not do so, except complete Treasury obscurantism of the most unfortunate kind.

Mr. Tam Dalyell (West Lothian)

As my hon. Friend the Member for Ashfield (Mr. Marquand) said, there is a certain difficulty, in that none of us has that scientific expertise to pass an absolute judgment. On the other hand, some of us have gone to a great deal of trouble on this issue and I for my part would like to say that I have heard not only scientific arguments from scientists working for a particular firm but reasonably objective external advice, and that the burden of that objective, external advice is on the side of the industrial scientists and not on that of the Treasury scientists—or that the advice given to the Treasury could be more accurate, as my hon. Friend the Member for Heywood and Royton (Mr. Barnett) says.

I wish briefly to refer to some of the particular points which the Minister of State made and comment on them hoping for an answer. First, the Minister of State said that cost of the L.P.G. engine is higher than that of the equivalent petrol engine which if adapted would have a lower level of toxic emissions than an engine converted to L.P.G. This apparently is the advice also given to Customs and Excise, and Mr. Harbour, the principal executive officer of the Customs and Excise Department, said: Petrol engines could be fitted with an exhaust purifier to bring them to the same level as those of L.P.G. Later, Customs said that it had not meant to imply that emission control devices for fitting to existing vehicles were readily available but was looking to the reasonably near future rather than the immediate present and at the problem in this wider context. Discussion with the A.A., the Motor Industry Research Association, and Ford Emission Laboratories reveals no knowledge of emission control devices available now or expected in the reasonably near future. My first question, therefore, is what is meant by "the reasonably near future"?

8.30 p.m.

The Minister of State said that he did not agree that it would reduce pollution, especially when we take pollution as a whole. Pollution as a whole is not so significant as that in specific areas where people are exposed continuously. A congested cross-roads in Warwick, for example, showed four times greater hydrocarbon and 4½ times greater lead concentration than average, the lead concentration being three times the upper safe limit in California, which in turn is double that in the Soviet Union. What is meant by "pollution as a whole", and why does not the hon. Gentleman agree?

The Minister of State then said that quite a lot of this gas, were it not used for road vehicles, would be used in industry substituting for more toxic forms of fuel. The fact is that, because of the high cost of storage and distribution, L.P.G. does not compete with the low-grade fuels which are the prime sources of pollution. L.P.G. competes mainly with indigenous natural gas. In any event, nowhere does it achieve the same improvement in emission as in a spark ignition engine. That is a view that I have gone to some trouble to check, and I should like the Treasury's advice to tell us whether in its opinion it is wrong and, if so, why.

The Minister said that he understood that North Sea gas was not readily usable as a method of motor propulsion and was not so used, though conceivably it could be used in that way. There are a number of vehicles outside the United Kingdom running on liquid or compressed natural gas. However, development of natural gas vehicles will not come about in the United Kingdom if the financial incentive for the operator is removed by tax.

Mr. Higgins

Perhaps I might seek to clarify one point. There is some dis tinction between North Sea natural gas for this purpose and natural gas from elsewhere. Does the hon. Gentleman know of any case where a gas the same as North Sea gas is being used in a car?

Mr. Dalyell

What comes into account is possible imports of natural gas from South-East Asia. That may become a probability within a few years. It is certainly one possible discussion.

Mr. Higgins

It was used largely in the balance of payments context. Again I ask the hon. Gentleman whether he knows of any case where a gas the same as natural gas from the North Sea is used in a car?

Mr. Dalyell

I stick to the possibility that some firms are talking in terms of the economic reality and possibility of bringing gas from much further afield—[Interruption] Does the hon. Gentleman wish to interrupt again? We can argue on fact like this. Apparently he does not.

The hon. Gentleman said that the Government were seeking equity between one fuel and another. I understand that this reference to electrically operated vehicles highlights a precedent covered during our discussions in Committee. If there is a different interpretation, I wish to know what the Minister of State meant.

The hon. Gentleman said that electrical vehicles are entirely different in the sense that the degree of pollution is not debatable and that they operate on a very small scale. Power stations are a major pollution problem, and the use of electricity in vehicles merely shifts the point at which the emission takes place. There are said to be 30,000 electrical vehicles in operation and, by imposing a special vehicle tax to cover all road vehicles on non-taxed fuel, the Treasury would go some way towards the objective of equity, still leaving incentive for high mileage vehicles to use low pollution fuel. Limited supplies of L.P.G. and adjustment of the vehicle tax level will regulate any loss of revenue to a level commensurate with the improved environment.

Then the Minister of State said that the tax on the vehicle would raise considerable administrative problems whereas the tax on fuel was comparatively simple and not likely to lead to any vast increase in costs. That may be true for the Customs and Excise authorities, but the industry will be faced with the heavy cost of duplicate storage systems and, in many cases, duplicate storage tanks. The nature of L.P.G. makes tanks between three and five times more expensive than those used for derv or petrol, and it is almost certain that, taxed at thermal parity, L.P.G. would disappear as a road fuel because costs are prohibitive.

The Minister of State said that the powers to examine road vehicles are not significantly different from the powers that exist already with regard to derv. One significant point is that gas oil, the untaxed alternative to derv, is marked with a dye to distinguish it from the taxed fuel. It is not possible to mark untaxed L.P.G. because it is a gas under normal conditions, Inspectors, therefore, would not be able to detect whether the tax had been paid. It is not simply that we have been urged by one company to speak on its behalf. I have taken some trouble over the matter through the contacts available to any economist who writes for a weekly scientific magazine. The almost unanimous opinion is that the L.P.G. case is good, and it is in good faith and with sincerity that we put it forward tonight.

Sir Brandon Rhys-Williams (Kensington, South)

I support my hon. Friend the Member for Hemel Hempstead (Mr. Allason) on the Amendment. We went over the ground in Committee and it is not necessary to argue again what I said then, except that my views have not changed.

If there is a potential loss of revenue, the right way to deal with it is by a tax being placed on the vehicle, as is the Continental practice, rather than on the gas. I hope that the Minister of State will signify his acceptance of the Amendment. If not, we must conclude that it is the Treasury's intention to eliminate the use of L.P.G. in road vehicles. I submit that that would be a grave error.

The technical questions have been gone over competently by the hon. Member for West Lothian (Mr. Dalyell). I understand that there is no exhaust purifier on the market, or contemplated, which will reduce lead emission from petrol engines to the level when L.P.G. is used. I fancy that the same applies to sulphur and possibly to smoke. No doubt we are awaiting the final answer of some authority which will be regarded as impeccable on this subject.

I take exception to the wording of the Clause as it stands. It seems to give too much latitude to the Treasury and takes away power from this House in an unacceptable way. The mandarins of Great George Street and their heyducks must not ask the House to give them carte blanche about taxation. Therefore, I hope that this extremely moderate insertion will be allowed so that the rather opaque significance of this paragraph will be made clear.

Mr. Higgins

My hon. Friend the Member for Hemel Hempstead (Mr. Allason) has moved a specific Amendment to the Clause. I shall seek to reply to the points he has raised and also to the more general points which have been raised on both sides of the House.

The substantial effect of the Amendment would be to load on to the Exchequer the cost of converting vehicles to run on gas, which I understand is normally about £130 to £150. No precise estimate of the cost can be made, because it depends on how the cost of conversion was assessed in terms of unit quantities of fuel, which would be a difficult and complicated calculation to make.

Mr. Marquand rose——

Mr. Higgins

If we assume that a quarter of a million vehicles, for example, were to be converted, which I think is the likely maximum number, that they cost on average £140 per conversion, and that the engines last on average five years. the cost, though small at first, would probably build up to a maximum of about £7 million a year.

Mr. Marquand

I rose to ask the Minister of State to look at the Amendment again. Surely it does not say that the full cost of conversion would have to be borne by the Exchequer. It says that the cost of conversion would be one of the relevant considerations in deciding the rate of duty. I do not know what was in the mind of the hon. Member for Hemel Hempstead, but as I read the Amendment it did not lay down a precise figure. It merely stated that this was a factor to be taken into account.

Mr. Higgins

I may have misunderstood my hon. Friend in thinking that he wanted to have taken into account 100 per cent. I have taken it to be that. It is possible that he had in mind a more flexible suggestion.

Mr. Allason

I had in mind 100 per cent. over the life of the vehicle, which is a considerable number of years.

Mr. Higgins

If we were to do that we would have to relate the cost to the unit of fuel consumed, and this would be a complicated matter. I have sought to give an indication of what, on various arbitrary assumptions, it seemed the cost was likely to be, but I accept what my hon. Friend says if he wishes to interpret his Amendment in a particular way.

There is one point that I ought to take up. My hon. Friend laid stress on the fact that some of his constituents had converted vehicles to use L.P.G. In that context, I think it is important to appreciate that there was quite a lot of speculation in the Press at the time when these conversions took place—which I think has been mainly over the last year—to the effect that it was likely to be necessary to place a duty upon them to protect the Revenue, and therefore those who have converted have done so knowing that that was likely to be the case.

Mr. Allason

When I opened the first L.P.G. station outside London in June of last year, there were a number of vehicles there waiting to be filled. It means, therefore, that conversions had taken place more than 12 months ago.

Mr. Higgins

That may be so, but the number has increased only recently, and I think it was generally known in the trade Press that if the number began to accelerate it would be necessary for the Revenue to be protected. The crucial point, which I made in Committee, is that it seemed to us right to legislate now rather than wait until a number of further conversions had taken place on which the expenditure would prove abortive in the light of the change in the duty. It seemed right to take action now, rather than allow the situation and a degree of uncertainty to persist.

Mr. Michael McNair-Wilson (Walthamstow East)

Is it the Government's intention to dissuade people from converting to L.P.G.? That, surely, will be the effect of the tax?

Mr. Higgins

The position has been made clear. It is that we feel that there should be fiscal equity between the two types of fuel.

Many arguments have been advanced about pollution, and I should like to take those up. I recognise the considerable expertise in this matter of the hon. Member for West Lothian (Mr. Dalyell). He has put forward the case in his usual modest way, but we recognise that he has made a considerable study of the subject. I did not, in Committee, undertake to make a massive review of the subject, but I have in the interval gone into it as deeply as I could because I recognised that hon. Members on both sides felt that there was a degree of uncertainty about the situation, and I thought it my duty to do that. I hope, therefore, that the House will bear with me for a few moments while I go in some detail into the points that have been raised, and I hope that the hon. Member for Ashfield (Mr. Marquand) will not regard this as complete Treasury obscurantism of the most unfortunate kind. I think that, on reflection, he will feel that that is a little high.

L.P.G. is the only fuel affected by the new proposal. The hon. Member for West Lothian referred to natural gas. It is conceivable that there could be imports of this gas which would be appropriate for the kind of uses about which we have been talking, but the information that I have been able to obtain is that this does not apply to North Sea natural gas. I think the jargon is that one is dry, and the other is wet, and that the kind in the North Sea is of the kind that would not be used in motor vehicles.

Mr. Robert Sheldon (Ashton-under-Lyne)

I apologise for not being here for the first part of the Minister's speech. Will he confirm that if it proved practicable to use North Sea gas he would have no objection to its being used in this way?

Mr. Higgins

That is a completely hypothetical question. One would have to look at it in the context of the time, because many other considerations would have to be borne in mind.

The L.P.G. about which we are talking is not manufactured for its own sake but arises in the course of refining hydrocarbon oils into petrol, and supplies will always be limited to some extent. The pricing policies of the oil companies in relation to what is essentially a byproduct are likely to be influenced considerably by the availability of outlets.

Against this background, the environmental or pollution arguments are distorted if attention is focused on road traffic pollution alone to the exclusion of pollution in the rest of the environment. L.P.G. is, of course, a less convenient fuel than derv or petrol: it is less conveniently transported and stored, the vehicles which use it have less mileage range and the engines require special adaptants. Its use is still limited on the roads and has come about largely because of the accidental freedom from hydrocarbon oil duty.

If we look at it—as we should: these things are not divisible—on broad environmental grounds, this diversion from other possible uses is by no means desirable, because L.P.G. has a real advantage as a non-pollutant over some other fuels—notably coal and fuel oil. Its more obvious use as a general industrial fuel is particularly important; it eliminates the discharge of sulphur dioxide, of smoke, grit, dust and soot. So there is considerable scope for it to reduce pollution generally.

Hon. Members may have seen a number of half page advertisements in the national Press recently which pointed out that L.P.G. is making a vital contribution to nearly every kind of industry and which stress that not the least of its advantages is that it has a negligible sulphur content and that it makes a major contribution to reducing air pollution. The advertisements, which are remarkable in making no reference to its use as a road fuel, stress this point and say, for example, that the Coalville Brick Company has successfully solved a heavy smoke emission problem by converting to this kind of gas.

So the point which the hon. Member for Ashfield made—that it is not a gas which is used in substitution for these other fuels, which are very heavy pollutants—taken in connection with the supply situation, seems to me, as it did in Committee, to make a reasonable argument that one needs to look at pollu- tion as a whole and not just the particular question of traffic pollution.

But I will now turn to that narrower question of traffic pollution. It is true that L.P.G. engines compare favourably with ordinary uncontrolled petrol engines in emissions of carbon monoxide. I have gone into this subject in considerable detail, and our own view is that the figures which my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) quoted in Committee are greatly exaggerated. I am not saying that it is not possible to achieve the results he gave, but so far as we can establish, it depends on the condition of the engine and so on and more appropriate results—I have the technical details here—tend to produce a rather different conclusion.

They suggest that the L.P.G. is no better than a controlled petrol engine under most working conditions and that diesel engines are remarkably superior to them all, so far as this kind of pollution is concerned—not necessarily smoke, of course.

Sir B. Rhys Williams

Would my hon. Friend give the House—this is a matter of considerable interest—the elements that he is speaking of in the toxic emission? Are they lead, sulphur or what?

Mr. Higgins

I think I made it clear that I was talking in this context of carbon monoxide. I will turn to some of the other points in a moment or two.

We should therefore compare L.P.G. first of all with petrol engines. The point which should be made is that devices can be fitted to petrol engines to reduce their toxic emission to levels which are generally accepted in Europe as reasonable standards on a basis which is broadly comparable to L.P.G. engines. If they are fitted during manufacture, the extra cost of this kind of change ranges, I understand, from £1 to £8 for a popular model, which is only a fraction of the cost of £130 or so which would apply in the case of L.P.G. engines.

Having gone into the matter further, I agree that such devices are not readily or cheaply available for fitting to existing uncontrolled petrol engines. However, we already have a number of popular makes of car which conform to European standards. I will not list the various makes now. These are being supplied to the home market. They are being introduced at the rate of about one million cars a year, and the House will appreciate that this is a substantially greater number than the total number would likely to be resulting from conversions to L.P.G.

Although it is true that conversions are necessary on new cars in relation to the total problem, it is clear that once this is compared with controlled petrol engines, the situation is not such that one would feel that some discrimination is necessary between the two types of fuel.

If one looks at this in relation to the question of diesel engines, one sees that L.P.G. has some advantage from the smoke and noise point of view, but I understand that L.P.G. engines are inferior from the point of view of toxic emissions. It is in this sphere, rather than in the field of petrol engines, that we are more likely to see the introduction of L.P.G., and this has been borne out by the kind of vehicle which has already been converted.

I come to the general question of pollution. As for Government action, my right hon. Friend the Secretary of State for the Environment has made it clear that he is deeply concerned over this problem. The House will be aware that he has recently made a regulation to prevent the emission of fumes from the crankcases of new cars. He has also published a draft regulation to prevent smoke emission from new diesel engines, and he is further considering emissions appropriate to this country. I stress the phrase "appropriate to this country" because the hon. Member for West Lothian (Mr. Dalyell) made considerable reference to standards in other countries.

We must, of course, remember that it is important to consider climatic conditions. For example, the conditions which one finds in the middle of a traffic jam on a throughway in Los Angeles are considerably different from the conditions found in Britain. The hon. Member for West Lothian will no doubt agree that the standards appropriate there are not necessarily those appropriate here.

Mr. Dalyell

Did I understand the hon. Gentleman correctly? Did he say that the Treasury advice to him is that the toxic emissions from diesel engines are less bad than the toxic emissions from L.P.G. engines? Is that his argument, or have I misunderstood him?

Mr. Higgins

I set the position out quite clearly. Our advice is that although L.P.G. engines have some advantage over diesel engines—from the point of view of smoke, smell and noise—they are inferior from the point of view of toxic emissions.

Sir B. Rhys Williams

Is my hon. Friend aware that apart from carbon monoxide, lead and sulphur emissions must be taken into account?

Mr. Higgins

The original point I made was about carbon monoxide. The question of lead raises some difficult questions, but I think the House would feel that this is a matter which should be pursued with the Secretary of State for the Environment because it is a particular problem which I am sure he will wish to consider as part of the whole range of questions at which he is looking relating to this subject. It would be wrong of me at this stage to go into the details of the point now.

However, I come to a matter which is within my province, and that is the question of the Revenue considerations. We have not made the point that there is some tremendous loss of revenue now, simply because the number of conversions is probably not more than about 1,000 vehicles. The crucial point, however, is that without any legislation of this kind there might be created a situation in which the number of conversions could increase very rapidly, so that the revenue loss would correspondingly rise speedily.

I would have thought that it was common ground between the two sides that if this situation were likely to develop it is right that we should legislate early rather than late in the light of the situation which my hon. Friend the Member for Hemel Hempstead mentioned in relation to those who are converting from one kind of fuel to another.

That being so, it is right that one should attempt some quantification, because if the use of L.P.G. should expand significantly and represent from 1 per cent. to 1–6 per cent. of total fuel consumption, or about £19 million a year, it would represent a Revenue loss of from £13 million to £21 million. Even if it grew to an enormous extent, the 10 per cent. envisaged by my hon. Friend the Member for Kensington, South in Committee it would, if untaxed, represent a Revenue loss of about £130 million—a very considerable Revenue cost. As I have sought to indicate, neither the scale nor the change in the degree of pollution is one that the Government feel they should accept.

I have sought to give the House as long and as full an explanation as I can: I have an enormous file behind me here. I assure the House that I have gone into the subject very fully. It is a highly complex subject, but I thought it right that I should do so. But, taking the picture overall, and the pollution and Revenue arguments together, I think it right that the House should accept the Clause, and that it would be wrong, for the reasons I have given, to accept the Amendment.

Mr. Marquand

With the permission of the House, Mr. Speaker, I must say that, despite the charm of the Minister of State and the thoroughness with which he went into the scientific arguments, it seems to us on this side that he did not deal with the central point at issue, which is whether or not there should be deliberate discrimination by the Revenue in favour of anti-pollutant devices. He made it clear both at the beginning and at the end of his speech that his chief concern is protection of the Revenue rather than prevention of pollution. Because of that, I hope that my hon. Friends will vote for the Amendment.

Mr. Crouch

I apologise to my hon. Friend the Minister of State and to the House for not being here when the Amendment was moved, but I could not be in two places at once. As some hon. Members know, I have been extremely interested in the problem of pollution emitted from road vehicles. I listened with great interest to what my hon. Friend said and I have read what he said in Committee, but I think that he has confused the two types of emission—that from industrial plant and that from vehicles.

The emission of pollution from road vehicles is low level, close to the ground, and does not escape easily, while that from industry escapes from a high chimney and is quickly blown away. Therefore, the use of very low pollutant exhaust gas—L.P G.—makes a significant contribution to the reduction of pollution. I do not say that the contribution is massive—the quantities are not sufficient for that—but the contribution to the reduction of low level emission in areas of high density traffic is significant.

My hon. Friend has obviously done a great deal of homework on the subject since he dealt with it in Committee, and I listened with interest to his technical explanation. I felt that he may have paid more attention to fiscal equity than to what his right hon. Friend the Secretary of State for the Environment might think on the matter. I have listened to my right hon. Friend and some of his Ministers telling us of the need to take every step, however small, gradually to eliminate pollution. Any action by the Treasury which hinders a step forward in the reduction of pollution—in this case, pollution in city centres where there is a concentration of population, and not just industrial centres where the population may be more limited—is to be regretted. It is a pity that the Treasury should at this time itself take a step which is not completely in line with the intentions of the Secretary of State for the Environment.

9.0 p.m.

I appreciate that my hon. Friend has made a considerable study of the matter and is now speaking with much knowledge of the various constituents of the various types of exhaust gases which may be produced by various types of road fuel, but I have felt for a long time that L.P.G. offered us an opportunity to make a contribution in certain areas towards reducing pollution, and we are concerned today about pollution in all its forms—industrial pollution, liquid pollution of our rivers, and, above all, atmospheric pollution in all its forms, and what worries us most is atmospheric pollution from everyday traffic, both domestic and industrial.

I do not think that L.P.G. could be used by domestic traffic. There would have to be tens of thousands, if not hundreds of thousands, of filling stations throughout the country. L.P.G. is not available in such quantity, but it is available for those who use traffic and who drive only in city centres—for example, fleets of taxis, municipal vehicles of all sorts, buses and ambulances, and perhaps British Railways vehicles delivering in the city centres, and perhaps Post Office vehicles.

I should not say these things if this type of road fuel were not already being used by such operators in the centres of some of the world's major cities for the very reasons which I am advancing, that it produces a lower pollution factor. But do not let us kid ourselves—these users did not reach that conclusion out of the goodness and generosity of their hearts, but because of some fiscal stimulus in the United States and in Holland, some encouragement to take a step in line with their equivalent of the Secretary of State for the Environment.

Mr. Dalyell

Would the hon. Gentleman tell the Government that there are hon. Members on both sides of the House—for this is not basically a party matter—who beg the Government to use fiscal policy as an instrument in the anti-pollution drive which is what we want? It is the establishment of the principle for which we are all fighting this evening.

Mr. Crouch

I hesitate to make any more appeals to the Government, because they have been very generous so far in responding to an appeal which I was just one of about 25 in making to them, and I could not expect two winners in a day, but I agree with the hon. Gentleman that it would be very encouraging to all of us—and this goes across all party barriers—if the Treasury could think again and could get into line with the Secretary of State for the Environment and make its own contribution towards a reduction of pollution, be it ever so small.

The lead can come only from the Treasury. We know that my hon. Friend is steeped in L.P.G. and what comes out, and we appreciate that he has learned about the problem. He has leaned over to understand what we are arguing about, but he has not gone far enough for me and I hope that he will make some emission from Treasury Bench which will encourage us all.

Mr. Allason

My hon. Friend the Minister of State said that his chief concern was loss to the revenue. I must admit that my chief concern is justice for my constituents. I frankly admit that when they decided to convert they were con- cerned not with that aspect of pollution, but with the possibility of using a cheaper fuel. I disagree with my hon. Friend the Member for Canterbury (Mr. Crouch) who said that it is suitable only for taxis. I was proposing to have my next car converted to use this fuel as an alternative so that I could either use a very cheap fuel, which I could obtain in my constituency or use petrol when L.P.G. was not available. It seemed a very reasonable process to go through.

Mr. Crouch

I did not mean to convey that it was only suitable for municipal vehicles. I have seen domestic vehicles converted, a Ford Cortina, for example, with a dashboard switch for changing from L.P.G. to petrol. I did not wish to mislead the House.

Mr. Allason

I am grateful to my hon. Friend. However, my hon. Friend the Minister of State had admitted that he intends to create a disincentive to L.P.G. By insisting on fiscal equity and an exact equivalent tax, it is clear that he is prepared to see this whole business put out of action. This is quite intolerable. His idea of fiscal equity has something a little wrong about it. When we tax, we tax according to the ability to pay. We do net necessarily tax everybody equally. With income tax, we recognise that some cannot afford to pay as much as others. Clearly, when £120 to £150 has been spent on converting a vehicle, as I might have converted mine, the owner cannot then afford to pay quite so much in tax as he could if he had not undertaken that heavy conversion. My hon. Friend the Minister of State has admitted that he wants to see this whole thing abolished.

Mr. Higgins

I did not say that. I said that I thought that the two fuels should be treated on an equitable basis.

Mr. Allason

If my hon. Friend would use my interpretation of "equity", he would accept the Amendment. As he said that he will not accept the Amendment, he must mean that he intends to charge according to the calorific value of the fuel, whether petrol or L.P.G. This can only mean that the whole operation goes out of business. Not only is there the cost of conversion for the car but there is also the great expense to garages, mentioned by the hon. Member for West Lothian (Mr. Dalyell).

Undoubtedly my hon. Friend the Minister of State is throttling this enterprise. He may consider that fair enough, but what about those who have already converted? It surely cannot be fair to them, a year after they have converted their vehicles in perfectly good faith, to say, "I have now changed the rules of the game, so your cost of £120 to £150 is completely abortive." Surely that is grossly unfair. I cannot believe that my hon. Friend intends to do this.

If my hon. Friend cannot accept the Amendment, I hope that he will at least be able to refund the costs of those who have carried out this conversion at very considerable expense, the small people who cannot afford this sort of expenditure.

Mr. Robert Cooke

I hope that the Treasury will think very carefully before turning down the suggestions of my hon. Friends. Surely it must be to the benefit of the community to encourage the use of any fuel which causes less pollution than the fuels now in use. We have heard of people trying to get the steam engine reintroduced so as to save the filthy atmospheric pollution caused by the petrol-burning internal combustion engine. It has been suggested that electromotive power is the answer.

Hon. Members may well regard both those alternatives with some scepticism, but the Government should be doing something to discourage pollution. If this development will help to reduce the problem of pollution, the Government should not hinder it. The Treasury has

an idea that all things must be equal, but I cannot believe that the Department of the Environment will view with favour any attitude in government which will not encourage the use of non-polluting or less-pollutiong fuels. I therefore hope that my hon. Friend the Minister of State will give this matter very careful consideration.

Mr. Michael McNair-Wilson

Because of the tax on L.P.G. about 1,000 vehicles will be paying revenue. Therefore, the Treasury will not get a substantial sum from the tax. My hon. Friend the Minister of State said that the two fuels must be treated on an equitable basis. He also referred to the production soon of a pollution-free or near pollution-free petrol engine. This is what we must all hope will arrive in the near future.

Until such an engine is on the market, the Government should not tax a form of fuel which materially reduces pollution, as several hon. Members saw for themselves when a taxi was brought to the House to demonstrate this fuel. It is a matter of waiting for only one or two years, but in that period we should not stifle a fuel which, even if only in the smallest degree, reduces pollution in the street, which is a form of pollution about which we should all be concerned if we care for the well-being of pedestrians in urban centres.

Question put, That the Amendment be made:—

The House divided: Ayes 187, Noes 211.

Division No. 409.] AYES [9.12 p.m.
Albu, Austen Cohen, Stanley Eadie, Alex
Allaun, Frank (Salford, E.) Concannon, J. D. Edwards, Robert (Bilston)
Archer, Peter (Rowley Regis) Corbet, Mrs. Freda Ellis, Tom
Ashton, Joe Crawshaw, Richard Evans, Fred
Atkinson, Norman Crosland, Rt. Hn. Anthony Fernyhough, Rt. Hn. E.
Bagier, Gordon A. T. Cunningham, G. (Islington, S. W.) Fisher, Mrs. Doris (B'ham, Lady wood)
Barnes, Michael Cunningham, Dr. J. A (Whitehaven) Fletcher, Ted (Darlington)
Barnett, Joel Dalyell, Tarn Foot, Michael
Beaney, Alan Davidson, Arthur Galpern, Sir Myer
Benn, Rt. Hn. Anthony Wedgwood Davies, Denzil (Llanelly) Gilbert, Dr. John
Bennett, James (Glasgow, Bridgeton) Davies, S. 0. (Merthyr Tydvil) Golding, John
Blenkinsop, Arthur Davies, Clinton (Hackney, C.) Gordon Walker, Rt. Hn. P. C.
Boardman, H. (Leigh) Davis, Terry (Bromsgrove) Grant, George (Morpeth)
Booth, Albert Deakins, Eric Grant, John D. (Islington, E.)
Boyden, James (Bishop Auckland) de Freitas, Rt. Hon. Sir Geoffrey Griffiths, Eddie (Brightside)
Bradley, Tom Dell, Rt. Hn. Edmund Griffiths, Will (Exchange)
Brown, Hugh D. (G'gow, Provan) Dempsey, James Hamilton, James (Bothwell)
Brown, Ronald (Shoreditch & F'bury) Doig, Peter Hamilton, William (Fife, W.)
Buchan, Norman Dormand, J. D. Hannan, William (G'gow, Maryhill)
Buchanan, Richard (G'gow, Sp'bum) Douglas, Dick (Stirlingshire, E.) Hardy, Peter
Campbell, I. (Dunbartonshire, W.) Douglas-Mann, Bruce Harrison, Walter (Wakefield)
Castle, Rt. Hn. Barbara Duffy, A. E. P. Heffer, Eric S.
Clark, David (Colne Valley) Dunn, James A. Hooson, Emlyn
Cocks, Michael (Bristol, S.) Dunnett, Jack Houghton, Rt. Hn. Douglas
Howell, Denis (Small Heath) Marquand, David Sheldon, Robert (Ashton-under-Lyne)
Hughes, Rt. Hn. Cledwyn (Anglesey) Marsden, F. Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Hughes, Robert (Aberdeen, N.) Meacher, Michael Silkin, Rt. Hn. John (Deptford)
Hughes, Roy (Newport) Mendelson, John Silkin, Hn. S. C. (Dulwich)
Hunter, Adam Millan, Bruce Silverman, Julius
Jenkins, Hugh (Putney) Miller, Dr. M. S. Skinner, Dennis
Jenkins, Rt. Hn. Roy (Stechford) Milne, Edward (Blyth) Small, William
John, Brynmor Mitchell, R. C. (S'hampton, Itchen) Spearing, Nigel
Johnson, Carol (Lewisham, S.) Morgan, Elystan (Cardiganshire) Spriggs, Leslie
Johnson, James (K'ston-on-Hull, W.) Morris, Alfred (Wythenshawe) Stallard, A, W.
Johnson, Walter (Derby, S.) Morris, Rt. Hn. John (Aberavon) Stewart, Donald (Western Isles)
Jones, Barry (Flint, E.) Moyle, Roland Stoddart, David (Swindon)
Jones, Dan (Burnley) Murray, Ronald King Strang, Gavin
Jones, T. Alec (Rhondda, W.) O'Halloran, Michael Swain, Thomas
Kaufman, Gerald O'Malley, Brian Taverne, Dick
Kerr, Russell Oram, Bert Thomas, Jeffrey (Abertillery)
Lambie, David Orme, Stanley Thomson, Rt. Hn. C. (Dundee, E.)
Latham, Arthur Owen, Dr. David (Plymouth, Sutton) Tinn, James
Lawson, George Palmer, Arthur Torney, Tom
Leadbitter, Ted Parry, Robert (Liverpool, Exchange) Tuck, Raphael
Leonard, Dick Pavitt, Laurie Urwin, T. W.
Lestor, Miss Joan Peart, Rt. Hn. Fred Varley, Eric G.
Lewis, Arthur (W. Ham, N.) Pendry, Tom Walker, Harold (Doncaster)
Lomas, Kenneth Pentland, Norman Wallace, George
Lyon, Alexander W. (York) Perry, Ernest G. Weitzman, David
Lyons, Edward (Bradford, E.) Price, J. T. (Westhoughton) Wellbeloved, James
Mahon, Dr. J. Dickson Price, William (Rugby) White, James (Glasgow, Pollok)
McBride, Neil Probert, Arthur Whitlock, William
McCann, John Rankin, John Willey, Rt. Hn. Frederick
McCartney, Hugh Reed, D. (Sedgefield) Williams, Alan (Swansea, W.)
McGuire, Michael Rees, Merlyn (Leeds, S.) Williams, Mrs. Shirley (Hitchin)
Mackenzie, Gregor Rhodes, Geoffrey W ill aim, W. T. (Warrington)
Maclennan, Robert Rhys Williams, Sir Brandon Wilson, Rt. Hn. Harold (Huyton)
McMillan, Tom (Glasgow, C.) Roberts, Albert (Normanton) Wilson, William (Coventry, S.)
McNair-Wilson, Michael Robertson, John (Paisley) Woof, Robert
McNamara, J. Kevin Roderick, Caerwyn E.(Br'c'n&R'dnor)
Mahon, Simon (Bootle) Roper, John TELLERS FOR THE AYES
Mallalieu, E. L. (Brigg) Rose, Paul B. Mr. William Hamling and
Malalieu, J. P. W. (Huddersfield, E.) Ross, Rt. Hn. William (Kilmarnock) Mr. Donald Coleman.
Marks, Kenneth Sandelson, Neville
NOES
Adley, Robert Critchley, Julian Hannam, John (Exeter)
Archer, Jeffrey (Louth) Curran, Charles Hastings, Stephen
Atkins, Humphrey Davics, Rt. Hn. John (Knutsford) Havers, Michael
Awdry, Daniel d'Avigdor-Goldsmid, Maj-Gen. James Hawkins, Paul
Baker, Kenneth (St. Marylebone) Dean, Paul Hay, John
Baker, W. H. K. (Banff) Deedes, Rt. Hn. W. F. Heath, Rt. Hn. Edward
Barber, Rt Hn. Anthony du Cann, Rt. Hn. Edward Heseltine, Michael
Beamish, Col. Sir Tufton Dykes, Hugh Hicks, Robert
Benyon, W. Eden, Sir John Higgins, Terence L.
Biffen, John Edwards, Nicholas (Pembroke) Hiley, Joseph
Biggs-Davison, John Elliot, Capt. Walter (Carshalton) Hill, James (Southampton, Test)
Blaker, Peter Elliott, R. W. (N'c'tle-upon-Tyne, N.) Holland, Philip
Boardman, Tom (Leicester, S. W.) Eyre, Reginald Holt, Miss Mary
Boscawen, Robert Fair, John Hordem, Peter
Bossom, Sir Clive Fell, Anthony Hornby, Richard
Bowdn, Andrew Fenner, Mrs. Peggy Hornsby-Smith. Rt. Hn. DamePatricia
Boyd-Carpenter, Rt. Hn. John Finsberg, Geoffrey (Hampstead) Howell, David (Guild-ford)
Braine, Bernard Fisher, Nigel (Surbiton) Howell, Ralph (Norfolk, N.)
Bray, Ronald Fookes, Miss Janet Iremonger, T. L.
Brewis, John Fortescue, Tim James, David
Brinton, Sir Tatton Foster, Sir John Jenkin, Patrick (Woodford)
Brown, Sir Edward (Bath) Fowler, Norman Jessel. Toby
Buchanan-Smith, Alick (Angus, N&M) Fraser, Rt. Hn. Hugh (St' fford & Stone) Jopling, Michael
Bullus, Sir Eric Galbraith, Hn. T. G. Kellett-Bowman, Mrs. Elaine
Burden, F. A. Gardner, Edward Kershaw, Anthony
Butler, Adam (Bosworth) Gibson-Watt, David King, Evelyn (Dorset, S.)
Campbell, Rt. Hn. G.(Moray&Nairn) Kinsey, J. R.
Carlisle, Mark Gilmour, Sir John (Fife, E.) Kitson, Timothy
Carr, Rt. Hn. Robert Glyn, Dr. Alan Knox, David
Channon, Paul Goodhew, Victor Lane, David
Chapman, Sydney Gower, Raymond Legge-Bourke, Sir Harry
Chataway, Rt. Hn. Christopher Grant, Anthony (Harrow, C.) Le Marchant, Spencer
Chichester-Clark, R. Gray, Hamish Lewis, Kenneth (Rutland)
Clark, William (Surrey, E.) Green, Alan Longden, Gilbert
Clarke, Kenneth (Rushcliffe) Griffiths, Eldon (Bury St. Edmunds) Loveridge, John
Clegg, Walter Gummer, Selwyn Luce, R. N.
Cockeram, Eric Gurden, Harold MacArthur, Ian
Coombs, Derek Hall, Miss Joan (Keighley) McCrindle, R. A.
Cooper, A. E. Hall, John (Wycombe) Maclean, Sir Fitzroy
Cormack, Patrick Hall-Davis, A. G. F. McMaster, Stanley
Costain, A. P. Hamilton, Michael (Salisbury) Macmillan, Maurice (Farnham)
McNair-Wilson, Patrick (New Forest) Parkinson, Cecil (Enfield, W.) Stainton, Keith
Maginnds, John E. Percival, Ian Stanbrook, Ivor
Marten, Neil Pike, Miss Mervyn Stewart-Smith, D. G. (Belper)
Mather, Carol Pink, R. Bonner Stokes, John
Maude, Angus Pounder, Rafton Sutcliffe, John
Meyer, Sir Anthony Powell, Rt. Hn. J. Enoch Tapsell, Peter
Mills, Peter (Torrington) Price, David (Eastleigh) Taylor, Robert (Croydon, N. W.)
Mills, Stratton (Belfast, N.) Prior, Rt. Hn. J. M. L. Tebbit, Norman
Mitchell, Lt. -Col. C. (Aberdeenshire, W.) Pym, Rt. Hn. Francis Temple, John M.
Mitchell, David (Basingstoke) Quennll, Miss J. M. Thompson, Sir Richard (Croydon, S.)
Moate, Roger Raison, Timothy Trafford, Dr. Anthony
Molyncaux, James Rawlinson, Rt. Hn. Sir Peter Trew, Peter
Monks, Mrs. Connie Redmond, Robert Tugendhat, Christopher
Monro, Hector Reed, Laurance (Bolton, E.) Turton, Rt. Hn. Sir Robin
Montgomery, Fergus Rees, Peter (Dover) van Straubenzee, W. R.
More, Jasper Rees-Davies, W. R. Waddington, David
Morgan-Giles, Rear-Adm. Ridley, Hn. Nicholas Walden, Brian (B'rn'ham, All Saints)
Morrison, Charles (Devizes) Ridsdale, Julian Wall, Patrick
Mudd, David St. John-Stevas, Norman Walters, Dennis
Murton, Oscar Sandys, Rt. Hn. D. Ward, Dame Irene
Nabarro, Sir Gerald Scott, Nicholas Warren, Kenneth
Neave, Airey Scott-Hopkins, James Weatherill, Bernard
Noble, Rt. Hn. Michael Sharples, Richard Wells, John (Maidstone)
Normanton, Tom Shaw, Michael (Sc'b'gh & Whitby) Whitelaw, Rt. Hn. William
Nott, John Shelton, William (Clapham) Wilkinson, John
Onslow, Cranky Simeons, Charles Wolrige-Gordon, Patrick
Oppenheim, Mrs. Sally Skeet, T. H. H. Worsley, Marcus
Orr, Capt. L. P. S. Smith, Dudley (W'wick & L'mington)
Owen, Idris (Stockport, N.) Soref, Harold TELLERS FOR THE NOES
Page, Graham (Crosby) Spence, John Mr. Keith Speed and
Page, John (Harrow, W.) Sproat, lain Mr. Hugh Rossi.
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