§ 6.—(1) Where a car is made available to an employee for part only of the relevant year, the cash equivalent derived from Table A, B or C after any reduction or increase provided for by paragraphs (2) to (5) above shall be reduced by 10 per cent if the car has been fitted throughout that part of the year with an exhaust emission reduction device, or by 5 per cent if the car has been fitted with such a device for more than one half of, but not for the whole of, that part of the year.
§ (2) Where a car is made available to an employee for the whole of the relevant year, the cash equivalent arrived at 714 above (that is to say, after any reduction or increase provided for by paragraphs (2) to (5) above) shall be reduced by 10 per cent if the car was fitted with an exhaust emission reduction device at the end of that year and for the greater part of that year, or by 5 per cent if the car was fitted with such a device at the end to that year but not for the greater part of that year.
§ (3) For the purposes of this schedule an "exhaust emission device" means
- (i) a catalytic converter or
- (ii) any other device of a similar nature which the Treasury may from time to time prescribe".
§ 2. This section shall have effect for the year of assessment 1990–91 and later years of assessment.'.5.30 pm
New clause 1 seeks to place a duty on the Chancellor of the Exchequer each year when publishing the Finance Bill to publish also an environmental assessment of the impact that its provisions will have on our environment.
We hear much these days about how green the present Government seek to appear. The Prime Minister has now made five major speeches on environmental issues. Much to the astonishment of the environmental world, she has been awarded a good conduct prize for her actions in relation to the environment. However, when we look at what the Government actually do rather than what they say, we see that their record on the environment does not, I fear, bear much examination.
The contrast with what is happening elsewhere in the world could hardly be greater. Many of the countries of the developed world are now realising the importance of environmental issues and the fact that, as a planet, we need to cope with the consequences of the industrial and economic policies that we pursue. That realisation is finding its expression not only in statements from Governments around the world, but also in their actions. At the end of June, when President Bush launched "Enterprise for the Americas", which is a new partnership for trade, investment and growth, he said:One measure of prosperity—and the most important long-term investment any nation can make—is environmental well-being. As part of our Enterprise for the Americas Initiative, we will take action to strengthen environmental policies in the hemisphere.He then laid out a detailed agenda for action on, for example, debt for nature swaps for the countries of Latin America. We pressed that issue on the Government in Committee. President Bush also referred to a whole range of trading issues and to the impact that trading patterns can have on the environment of the developing world.
If we consider environmental taxation policy and what is happening elsewhere in Europe, we discover that, in Italy in 1989, a special tax was imposed on non-biodegradable plastic bags, which was to be paid by manufacturers and importers. At 100 lira per bag, the tax is five times more than the cost of manufacturing the receptacle. In Norway, a charge has been imposed on non-returnable beverage and food containers since 1987. In Sweden, there is a high charge on batteries containing mercury or cadmium, amounting to 3.22 ecu per kilogramme of batteries sold. In Germany and the Netherlands, cars are divided into three categories, according to their air pollution characteristics. The cleaner the car, the higher the tax advantage for the car purchaser.
Many other examples could be given. It is clear that Governments elsewhere—Governments everywhere—and of all political complexions, are waking up to the need to 715 ensure that environmental considerations are taken into account in their economic policies, and especially their taxation policies.
Here in Britain, before the Chancellor's Budget, the Labour party proposed a series of proposals for green taxes which the Chancellor could have adopted as part of this year's Budget. We were told in advance that it was likely to be a Budget for savings and, to a limited extent—in fact, it was to a very limited extent—a Budget for the environment. Well, it was not. The Chancellor announced only two minor measures to benefit the environment. The first was a minor adjustment to the differential between leaded and unleaded petrol, making a further difference of less than 1p. The second item was a small increase in the tax to be paid for having the benefit of a company car. Subsequently, it must be admitted that in Committee the Government came forward with a further measure on mileage allowances.
However, there have been no other proposals, in the Budget, in the Finance Bill, or in the 30 or 40 pages that the Government added to the Finance Bill in Committee, which could be said to have any environmentally beneficial effect in terms of adjustments to the taxation system.
In contrast, the proposals put forward by the Opposition before the Budget would have provided a ready agenda that would have enabled the Government to take positive steps in the right direction. We proposed, for example, that we should consider reducing or even altogether removing VAT on particularly environmentally friendly products or processes, such as recycled materials or energy-efficient appliances.
§ Mr. Campbell-Savours
Does my hon. Friend agree that another advantage of that approach to securing higher environmental standards is that producers are given a choice? A producer can decide to produce a product that he can produce more cheaply, but on which he pays a higher level of tax, or he can produce another product on which he might pay a lower level of tax. Does my hon. Friend agree that that approach will, through taxation, build into the mind of every industrialist the consideration that, if he wishes to reduce his tax liability, he must ever be seeking new technological processes that secure higher environmental standards?
My hon. Friend is absolutely right. Using the taxation system to promote good environmental behaviour offers not only the producer but the consumer a choice. That means that producers will be encouraged—there will be an incentive—to look for alternative products that are less damaging to the environment.
As well as some carrots in terms of reductions in VAT, we also proposed some sticks with increases in VAT on, for example, items of non-biodegradable or non-recyclable packaging or on products with an excessive or unnecessary amount of packaging. We also proposed to increase VAT on CFCs, although, of course, we should like CFCs rapidly to be prohibited altogether. We proposed a review of corporation tax allowances, with additional allowances for anti-pollution or conservation investment, together with a provision to make non-allowable expenditure on items that create pollution. Therefore, if a company used or created pollutants such as CFCs, it would not be able to offset their costs against corporation tax.
We suggested that, instead of levying vehicle excise duty at a flat rate regardless of engine capacity, it should be 716 graded so that owners of small cars would pay less duty and owners of larger cars would incur more duty than at present. We proposed also a substantial additional difference between the price of leaded and unleaded petrol. The tax incentive to use unleaded since 1988 has been a success story, because its use has increased from single percentage figures to more than 30 per cent. of all petrol sold in this country. As my hon. Friend the Member for Workington (Mr. Campbell-Savours) said, that clearly shows that using the tax system to alter environmental behaviour can be most successful. However, its effect on unleaded petrol usage appears to have reached a plateau, so we suggested a further boost to try to ensure that the graph continues to climb.
We suggested also incentives for the fitting of catalytic converters, including zero rating for the purposes of VAT and a concession on the level of car tax where a converter is fitted to a new car. New clause 4, which is linked with new clause 1 for the purposes of this debate, advances a further measure to encourage the use of catalytic converters, in the form of an incentive to the users of company cars to persuade their employers to ensure that their cars are fitted with catalytic converters, by setting the tax levied on the user at a lower level.
§ Mr. William O'Brien (Normanton)
I recently asked the Secretary of State for Transport when it will be compulsory to fit catalytic converters to new cars. I am advised that, because of EEC legislation, the Government do not intend to make the fitting of converters compulsory until 1993. Would it not be in everyone's interest for the Government to speed up the legislation and to make the fitting of converters compulsory, rather than leave that to market forces?
My hon. Friend rightly identifies the problem of the three-year time scale before the fitting of catalytic converters is made mandatory. Converters are extremely helpful in removing or reducing exhaust emissions of carbon monoxide, nitrogen dioxide and hydrocarbons. They do not tackle the carbon dioxide problem, but are valuable in a number of other respects. The tax incentives proposed in new clause 4 will ensure much more widespread fitting of catalytic converters over the next two or three years—even before the mandatory provision comes into effect.
We also proposed before the Budget a series of measures relating to company car taxation, to encourage the Government to raise the scale rates at which benefit is assessed, in line with the principles set by the former Chancellor of the Exchequer in his 1988 Budget, when he pointed out that taxation on the benefit of a company car was substantially less than the value of the benefit received. In both his 1988 and 1989 Budgets, the former Chancellor began the process of raising that rate, but the progress that he made has not been advanced to the degree that it should by the present Chancellor in this year's Budget and Finance Bill.
Those specific proposals for improvements to the tax system would have shifted environmental behaviour in a responsible direction, but none of them was taken to heart by the Chancellor or the Government. New clause 1 seeks to highlight the paucity of the Government's action in relation to the environment in this year's Finance Bill. It 717 suggests that, when the Government decide upon taxation changes each year, they ought to report to the House what will be the environmental impact of those changes.
That duty would exist whether or not the Government actually did anything in environmental terms, and it would provide a powerful incentive for the Chancellor to sit down and think carefully when drawing up his Budget—in respect of not only the fiscal stance that he intended to take or the amount that he wanted to raise, but the environmental consequences of his actions. The requirement placed on him to think through the environmental issues would be a powerful tool in the hands of those of us who are concerned about our environment.
§ Mr. Jim Cousins (Newcastle upon Tyne, Central)
Is my hon. Friend aware that the Confederation of British Industry has produced a helpful information booklet for its members on how to conduct environmental audits, not only for the purposes of company accounts but for presenting information about company activities more usefully and constructively? Is that not a good example of the leadership that should come from the Government rather than from the CBI?
I am always delighted to hear that leadership is coming from the CBI. Not only in respect of the environment but in relation to interest rates, levels of investment and other issues, the CBI is increasingly demonstrating the kind of leadership that the Government are lacking. We suggest that the Government should be required to undertake an environmental audit each year in relation to their Budget and Finance Bill proposals.
§ Mr. Nigel Forman (Carshalton and Wallington)
Can the hon. Gentleman say who would advise the Chancellor of the Exchequer each year on the technical aspects of any environmental assessment in respect of any individual clause in the Finance Bill?
I do not see any problem in the Chancellor, together with his advisers, sitting down to make a presentation of a sensibly argued case about the likely environmental consequences of particular measures. Doubtless he would also call upon the assistance of his right hon. Friend the Secretary of State for the Environment and his advisers. In order to be helpful in this matter, we have set out in the new clause a series of items that could be looked at each year by the Chancellor in relation to particular items of taxation.
At present, each year the Chancellor presents us with a Red Book in which he must set out the financial consequences of each of the measures he proposes and their cost. Why is it such an outrageous idea that the Chancellor should present us with a green book as well that sets out the consequences for our planet of his proposals?
It is too often forgotten by politicians that the environment does not simply refer to specially labelled separate issues that stand apart from the so-called main stream of politics. The environment and environmental concerns should run through all Government policy and everything that the Government are about. Nowhere is that more true than in relation to the economy and taxation. The interaction between the economy and the environment will grow rather than diminish in importance. 718 We believe that our new clause offers a way in which to highlight those issues to ensure that that interaction is properly scrutinised.
Taxation measures that change environmental behaviour through financial incentive are no substitute for the range of statutory and administrative measures that are also needed to protect our environment. Ultimately, it is regulation on polluting activity, integrated transport policies and energy conservation measures that will secure improvements in our environment in which we can all share.
However, taxation has its part to play as it can help to make a start to change behaviour. That is why we made a series of proposals before the Budget. That is why we urge on the Government a proper mix of financial incentives and regulation in relation to the environment. That is why we urge the Government to act in an environmentally responsible manner—they should settle their taxation policies so that people also act in that manner. Our new clause goes a considerable way to start that process, and it will ensure that, in future, the Chancellor will take more notice of the environment than, sadly, he has this year.
§ Mr. Gow
I enjoyed the speech of the hon. Member for Islington, South and Finsbury (Mr. Smith) and I understand and respect the motives that prompted him to table his new clause. Certainly the six signatories to the new clause are among the most agreeable Members of the House. It is possible, however, even for agreeable people to be mistaken. I do not know which among that sextet will claim to be the draftsman of the new clause, because the drafting is strange indeed.
Subsection 2(b) refers to "any body of water", which is a breathtaking description of the water around us. Who could have dreamt up such a phrase? There are six paragraphs to that subsection, four apply to the United Kingdom only and two apply worldwide. Who was the environmental genius who managed to distinguish between those paragraphs that apply to all mankind and those that should apply to the United Kingdom only?
The hon. Member for Islington, South and Finsbury proposed some further discriminatory taxation designed to protect the environment, but I wonder whether the hon. Gentleman is able to assure the House that all his proposals are such that they would not require the consent of folk in Brussels who were described in such picturesque and in some ways extremely attractive language by my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley)? I fear that my right hon. Friend's Budget proposals are now constrained more and more by the need to obtain permission from unelected and unaccountable Commissioners in Brussels. I shall give way to the hon. Gentleman if he can give us an assurance that none of his proposals requires the consent of the folk in Brussels.
§ Mr. Chris Smith
Of course a number of the VAT proposals require consent across the European Community—not necessarily the consent of the bureaucrats in Brussels, but the consent of the member state Governments. However, the action on catalytic converters could be taken tomorrow, as I understand that agreement already exists on that. One or two of the VAT items would require the consent of the other member states, but some of the other EC countries have already taken steps in that direction.
§ Mr. Gow
The hon. Gentleman confirms my worst fears: increasingly the taxation proposals that affect the British people require the consent and approval not only of Parliament, but of unelected, unaccountable folk in Brussels.
My hon. Friend the Member for Carshalton and Wallington (Mr. Forman), formerly Parliamentary Private Secretary to the former Chancellor of the Exchequer, asked who would fashion the environmental assessment, given that that assessment must be presented to the House by the Chancellor. Mercifully, my hon. Friend the Economic Secretary to the Treasury, himself an expert in all matters environmental, is to reply to this debate.
Let us go through the Treasury Ministers to find to which of them will be assigned the task of preparing the environmental assessment. Let us first consider my right hon. Friend the Chancellor of the Exchequer. We cannot heap further burdens upon him because he will be too busy in the coming weeks and months having discussions with German Ministers who have studied with close interest the article in The Spectator.
We then come to my right hon. Friend the Chief Secretary to the Treasury. We are told that in the coming weeks he will be engaged in the important matter—certainly I hope that he will be so engaged—of trying to restrain some of my right hon., and even hon., Friends, presently Ministers in the Administration, from spending more money than they should. Happily I note that my hon. Friend the Minister of State for Defence Procurement has hastened into the Chamber for this debate. He takes a keen interest in environmental matters and he alone of all Ministers will be assisting my right hon. Friend the Chief Secretary. He will do his duty by seeking to diminish spending while some of my other right hon. Friends will be seeking to increase it. We cannot heap an extra burden upon my right hon. Friend the Chief Secretary, especially in the coming important months before the spending plans for 1991–92 are fashioned.
We have excluded the Chancellor and the Chief Secretary. Who is the next on the list? My right hon. and noble Friend the Paymaster General who, it may be said, as an hereditary earl, is well qualified to prepare the economic assessment. But he also has other duties. He has to try to placate noble Lords in another place—
§ Mr. Gow
No, not on the Finance Bill. The hon. Gentleman, to whom I shall give way, does not seem to have read his own new clause, which provides that the Chancellor shall lay before the House, no later than 14 days after the Finance Bill has been laid before the House, the environmental assessment—that is a proposal in the new clause. The question my hon. Friend the Member for Carshalton and Wallington asked the House and I am trying to answer is, who will prepare the assessment. My hon. Friend did not answer that question, nor did the hon. Member for Islington, South and Finsbury, and so it falls upon me to try to answer it.
The list has now come down to my right hon. and noble Friend the Paymaster General. We have not always had a Member of another place as a Treasury Minister. The first Treasury Minister in another place, under the premiership of my right hon. Friend the Prime Minister, was my noble 720 Friend Lord Cockfield, who went on to Brussels. He is one of the folk of whom I am speaking. Perhaps he could be called back from retirement to assist with the preparation of the environmental assessment. Lord Cockfield was sent to Brussels to challenge the Commission, but when he got there he facilitated the Commission's task in seeking to impose its will on the 12 member states of the Community. To whom do we come next?
§ Mr. Simon Hughes (Southwark and Bermondsey)
Perhaps Lord Cockfield changed his line from one of attack to facilitation because he was persuaded by the merit of the argument.
§ Mr. Gow
Yes—that is why I shall not give way again to the solitary representative of the Liberal party. That party once represented Eastbourne, but once only, and we shall not give way to the Liberal party again.
I am pleased to welcome to our proceedings my hon. Friend the Member for Aldershot (Mr. Critchley), who is an expert in these as in other matters, and to whom I shall give way presently.
I was just coming to the fourth of the Treasury Ministers—who is he? He is my right hon. Friend the former Financial Secretary. My hon. Friends have been falling over one another in paying tribute to my—is he now my right hon. Friend—[Interruption.] There is disagreement among Treasury Ministers about whether he is right hon. or honourable. My hon. Friends have been falling over themselves in congratulating my right hon. Friend, the former Financial Secretary, on his appointment as Secretary of State for Trade and Industry. I do not join them. I deplore the appointment of my right hon. Friend as Secretary of State for Trade and Industry. The House will not misunderstand me when I say that I deplore it because I deplore the departure of my right hon. Friend the Member for Cirencester and Tewkesbury. I give good wishes to my right hon. Friend the Secretary of State for Trade and Industry and congratulate him, but I deplore his arrival for that reason, and that reason only.
Can my right hon. Friend the former Financial Secretary be engaged in the environmental assessment? How can he when he is about to go off to the Department of Trade and Industry which, according to some people, is one of the greatest pollutants of the environment?
§ Mr. Campbell-Savours
May I help the hon. Gentleman and put it to him that all the work will have been done before the Budget statement has been made, so he does not have to worry himself about such matters? The Chancellor will have the statement in his pocket when he stands at the Dispatch Box because it will have been produced as part of an assessment made prior to the introduction of measures in the Budget. [Interruption.]
§ Madam Deputy Speaker (Miss Betty Boothroyd)
Or perhaps make them more pertinent to the new clause.
§ Mr. Gow
Even if I am not willing to accept the rebuke from my hon. Friend the Lord Commissioner, I shall, of course, accept the rebuke from you, Madam Deputy Speaker.
I have been going through the Treasury team, and one Minister remains—the Economic Secretary, who is today, as usual, wearing a green tie and who is to reply to this debate.
The new clause is unnecessary. The Treasury, in conjunction with the Department of the Environment, already takes proper account of all the relevant environmental matters. I have no wish to heap further burdens on Ministers, particularly Treasury Ministers. Therefore, when my hon. Friend replies, I hope that he will say that an environmental assessment is surplus to requirement.
§ Mr. Campbell-Savours
The new clause is one of the most important new clauses that we are debating this evening because, while the hon. Member for Eastbourne (Mr. Gow) spent much of his speech humouring the House, he was, in effect, referring to what I perceive to be very much Labour's policy as it will be at the next general election. Built into the new clause is a proposition that is electorally saleable, certainly administratively practical and environmentally popular. It is the way to go in future, and I suspect that the hon. Member for Eastbourne, if he were more candid with the House this evening, would have found much in the amendment with which he could agree.
I shall deal with one part of the new clause and produce an example of how, if such matters were not considered when tax policy was framed, things could simply go wrong, damage could be done to the environment, and local authorities could spend lots of money repairing damage and preventing potential damage to the environment. If new clauses such as this already formed part of the existing law, one case would never have arisen—the sale of the Westminster cemeteries in London.
My example is relevant to the new clause because three of Westminster city council's municipal cemeteries were sold, two of which had been owned by the council for more than 100 years. Graveyards at Hanwell in west London and Finchley and Mill Hill in north London were sold for 15p, together with millions of pounds worth of land and buildings. The relatives of those buried in the cemeteries were not informed.
The sale of the cemeteries involved two factors. First, the land involved was raped in that it was not properly maintained. Historically the area had been well kept, well maintained and, I understand, well walked by people in the immediate vicinity. Those pathways and walkways were destroyed because of the nature of tax law in Britain.
Tonight I shall show how those issues interact and how in the absence of a proper tax framework—I shall explain how the law did not cover those matters in the way in which they would be covered by new clause 1—those who wished to pillage land and to speculate were able to destroy a beautiful area of London which had been immensely popular for a century.
I shall refer to how clauses 65, 66 and 67, on dual resident companies, and clauses 89 and 90, on income and corporation tax returns, would interact with positive tax legislation in the event that an environmental assessment were made of the Chancellor's proposals for tax legislation. I shall demonstrate how the Government lack 722 the will and the way to tackle the problem, thereby giving rise to new clause 1, by reference to the sale of the cemeteries in Westminster.
It was a callous act. Lady Porter, the leader of Westminster city council, sold the graveyards for 15p. In some cultures, people fight to defend the graves of their ancestors and the immediate environment that surrounds those graves. In this case, some beautiful cemeteries were desecrated as a result of tax law and the absence of any provision such as new clause 1. Lady Porter was happy to sell off hundreds of graves—I am told perhaps thousands—for less than the price of a pint of beer. Those 90 acres of land used to be looked after with respect; they were a fitting memorial and a place for contemplation. Now they are a wilderness because of tax law. The grass and briars grow waist high and the graves that once were tended with care are now choked with thorns and abused by vandals. The hon. Member for Eastbourne nods in agreement; I am sure that he feels as strongly as I do about this matter.
It is environmental blight on an immense scale. The land, the graves and the memory of the dead are now no more than another counter in a commercial game of poker between the cynical policies of Westminster city council and the financial interests of the owners of the cemeteries. The mischievous, wealthy landowners who have profited by buying and selling graves have used misrepresentation to achieve those profits and offshore, foreign resident companies to preserve their anonymity and to avoid paying tax. Had new clause 1 been on the statute book, the framing of law governing investments overseas would have provided sufficient protection to ensure that the transactions in respect of Westminster city council's cemetery privatisations would never have occurred.
Despite a so-called in-depth investigation by the district auditor, and despite the supposed investigations of the police fraud squad, the dealers who have blighted the land and insulted our memories continue to live anonymous, well-heeled lives in big houses in St. John's Wood or the Thames valley. They are able to do so because they carry out their transactions through shadow companies based in the Channel islands, Cyprus, Panama or Liberia.
§ 6.15 pmn>
§ Madam Deputy Speaker
Order. I am sure that the hon. Gentleman is a sufficiently clever parliamentarian to relate what he has to say to the clause. I have listened to him very carefully, but he has strayed some way from it. I should be obliged if he would relate his remarks to the new clause, and then he would remain in order.
§ Mr. Campbell-Savours
I understand your ruling, Madam Deputy Speaker, and I am sure that you realise that I considered these matters before I came into the Chamber today.
One section of the new clause deals with land use in the United Kingdom, and I am referring to land use to show that unless environmental impact assessments are carried out on tax law relating to land use in the United Kingdom, inevitably stories such as that relating to Westminster cemeteries will recur. By relating that story, I am illustrating where the tax changes should take place in compliance with new clause 1.
The district auditor and the police are unable and unwilling to discover who those people are. They are even unable and unwilling to chase up the tax which should be paid on the multi-million pound gains made by those 723 wealthy malefactors. I shall reveal for the first time in public who are some of the people behind the dealings and how they have successfully blackmailed Westminster into dropping its policy—
§ Madam Deputy Speaker
Order. I have given the hon. Gentleman quite a lot of leeway, but he is rather taking advantage of the clause and of the present debate. He should relate more directly what he has to say to the clause. I understand his great concern, but I hope that he will now speak to the clause before us.
§ Mr. Campbell-Savours
I am speaking specifically to the queston of land use in the United Kingdom and the need for an environmental impact assessment to be made by the Chancellor when devising tax policy that affects land use in the United Kingdom. The only way in which I can argue the need for that is by producing an example of where the law has been deficient and showing its consequences. That is what Parliament is about. One cannot simply set one's proposition; one has to explain the basis on which one wishes to argue a case for reframing the law. I should have thought that I was in order, but I bow to your judgment, Madam Deputy Speaker.
§ Mr. Gow
Perhaps I can help the hon. Gentleman. He may know that Westminster city council now accepts, and leading counsel has advised, that the sale of the cemeteries by the city council was unlawful. In my judgment, the consequence of that is that in law the cemeteries are still owned by the city council.
§ Mr. Campbell-Savours
I should like to think that that is the case, but I understand that that is not accepted by the developers and that Westminster city council is already negotiating a compromise which may well be at a substantial cost after all the environmental damage that has taken place.
In my view, local authorities should not be able to act in that way. If a provision such as new clause 1 already existed in legislation and there had been an environmental impact assessment of any tax policy changes that the Government were introducing, we should not be in the position that we are in today.
I ask the Government to take appropriate executive and legislative action to ensure that those people are made to answer for their actions. New clause 1 would prevent the activities of such people in future in so far as they blighted our environment. The graveyards which, as I have said, were beautiful, and which have been the subject of an environmental disaster, were sold on 30 April to a Mr. Clive Lewis, of Lewis and Tucker, in Hanover square.
§ Mr. Roger King (Birmingham, Northfield)
On a point of order, Madam Deputy Speaker. I have listened with great interest to the hon. Gentleman, but I find it difficult to identify the exact relationship between the problems with the graveyards of Westminster council and the new clause. Surely, according to the amendment, the Chancellor of the Exchequer is obliged to bring before the House the environmental implications of the Budget. The graveyards affair related to a local authority. It has no bearing on the environmental considerations of a Budget.
§ Madam Deputy Speaker
The hon. Gentleman makes a good point. I advise the hon. Member for Workington (Mr. Campbell-Savours) that to give an example is perfectly in order, but to pursue the example as he does in 724 such detail is an abuse because it shifts the purpose of the debate to a different subject. It is perfectly legitimate for the hon. Gentleman to give an example, as it is for any hon. Member, but he is pursuing that example to such an extent that he is shifting the subject of the debate from the new clause.
§ Mr. Campbell-Savours
I am tired of Conservative Members raising spurious points of order to prevent the truth from coming out every time that I come into the Chamber to say something that is controversial and causes concern among the general public and to set out the truth. The facts are simple.
§ Mr. Campbell-Savours
The hon. Gentleman wants me to be thrown out because I wish to explain matters—
§ Madam Deputy Speaker
Order. Let us keep it cool. The temperature is very hot outside, but let us keep it cool in here.
§ Madam Deputy Speaker
Order. I have explained to the hon. Gentleman that it is perfectly legitimate to give examples, but he should not pursue them to such an extent that he shifts the subject of the debate.
§ Mr. Campbell-Savours
I understand that, but I find it hard to accept that I am shifting the debate. The wordsland use in the United Kingdomare on the amendment paper. The new clause is about building into Budget calculations an environmental impact assessment and about the need to report 14 days later to Parliament on what is in the assessment. It refers specifically to land use.
In my 10 years in Parliament, perhaps on less controversial issues, I have heard hon. Members speak many times at great length, setting out by way of example the reason why they adopt a cause.
§ Madam Deputy Speaker
Order. I have allowed the hon. Gentleman to do that. He has set out his example. It is perfectly legitimate to do that. I ask him not to shift the subject of the debate, that is all.
§ Mr. Campbell-Savours
I use every debate, as any hon. Member does, to make my case. My argument is based on what happens in a particular case. If it had not been for interventions from the hon. Member for Birmingham, Northfield (Mr. King), I should have been well on in my case. As it is, I am still arguing defensively that I have a case and a right to raise it here in the House. If Parliament wants to shut out the truth, so be it, but the truth will come out.
The graveyards were sold on 30 April to Mr. Clive Lewis, of Lewis and Tucker, in Hanover square. His home is at 33 Carlton Hill, St. John's Wood. At this point I should say that there is another Clive Lewis, who runs a surveying company called Clive Lewis Associates. He is entirely unconnected with these events.
725 With the beautiful lands of the graveyards came 12 acres of even more beautiful land—building land—three gatehouses, a flat, £10,000-a-year rental from a crematorium, a car park and a nursery plot, together with a cheque from the council for £70,000. Those items were subsequently split up and bought and sold for millions of pounds through companies in various different tax havens. Most of the land is now in the hands of a company called Wisland Investments, which is based in Switzerland and registered in Panama.
§ Mr. Forman
On a point of order, Madam Deputy Speaker. I am an old friend and great admirer of the hon. Gentleman and I am very fond of him. He has his eccentric ways. Do you agree that his case is eminently an example of a matter which, if he wishes to go into it in great detail, he should raise on the Adjournment?
§ Mr. Allen
I bow to my hon. Friend. Entertaining as the hon. Gentleman's speech was, many of us felt that it was wholly irrelevant to the debate. My hon. Friend the Member for Workington (Mr. Campbell-Savours) was speaking about people who have abused the tax system for gain. The relevance of that to the debate has been outlined. If there was an environmental impact assessment of tax proposals, such abuses could not arise. With the greatest respect to the Chair, the items that my hon. Friend has raised are absolutely and strictly in order and certainly—
§ Madam Deputy Speaker
Order. That is for the Chair to determine. I remind the hon. Member for Nottingham, North (Mr. Allen) that the hon. Member for Eastbourne (Mr. Gow) was also called to order.
§ Mr. Campbell-Savours
Most of the land is now in the hands of a company called Wisland Investments which is based in Switzerland and registered in Panama. The land is environmentally significant to London. It includes natural walkways and is on the edge of the green belt. The land is being environmentally damaged due to the absence of precisely the environmental impact assessment called for in the new clause.
In order to sound like a credible purchaser, Mr. Lewis initially misrepresented himself to the counsel of the agent of the Western Synagogue in west London. As Rabbi Rosen of the synagogue rightly said, and will confirm:No instruction was ever given to Mr. Lewis. Indeed, it would have been beyond the constitution of the Synagogue to have purchased the land.Mr. Lewis insinuated his way into the counsel's confidence by taking in vain the name of the church where his father was an officer. Mr. Lewis was soon the only buyer, and when he declared his interest in the scheme Lady Porter was too pig-headed and her officers too frightened to stop the sale from going through. Right from the beginning, it seems that it was Mr. Lewis's intention to asset strip. New companies were set up to buy the different pieces of land. 726 In particular, a company called Cemetery Assets was set up 13 days before the exchange of contracts to take over the graveyards. The graveyards cost hundreds of thousands of pounds to maintain, yet Cemetery Assets had capital of just a few pounds.
Much of the other valuable land went to a Cyprus company called Bestwood Property Limited. Again, that company took advantage of British law.
§ Madam Deputy Speaker
Order. The hon. Gentleman is taking great advantage of the Chair and the House. I ask him again to relate his comments directly to new clause 1. Otherwise, I shall have to invoke Standing Order No. 41, which requires me to stop any irrelevance that the hon. Gentleman utters. His comments during the past five or 10 minutes were irrelevant to new clause 1. I seriously ask him to relate his comments to the environmental assessment of land and not to do so with the detailed examples that he has used so far.
§ Mr. Campbell-Savours
I understand that in Sweden, where one of the beneficial owners and principal investors in Wisland is part resident, the matters that I bring before the House are commonplace. The cemeteries are now in the hands of a Panamanian company, Wisland Investments. For years, the company has sought to conceal its true owners. I can now reveal that one of the investors in the company is a Swede by the name of Bertil Rosquist of Orchard Dene, Riverdale, Bourne End, in Hertfordshire.
§ Madam Deputy Speaker
Order. I now ask the hon. Gentleman to discontinue his speech. It is totally irrelevant to the new clause.
§ Mr. Campbell-Savours
On a point of order, Madam Deputy Speaker. I have spoken in the House on many occasions in the past 10 years. It may be that you cannot see the connection, but I feel sure in my mind that there is patently a clear connection. It has been drawn to your attention by several of my hon. Friends. You may not be prepared to accept the connection, but there is one, and if, in this mother of Parliaments, we are to be prevented from arguing our case on the basis that Parliament never wishes to consider the real arguments that lay behind our decisions to amend legislation, it will be much the poorer. I can say only that, under pressure from Conservative Members, you have conceded, and I take strong exception—
§ Madam Deputy Speaker
Order. I take great exception to what the hon. Gentleman has just said. I have been extremely tolerant since he started his speech. I understand the passion with which he speaks about this matter. He has never been stopped by me. I am sorry to have to stop him now, but I have given him ample warning about speaking directly to the new clause. I ask him to resume his seat.
§ Mr. Campbell-Savours
I do not refuse to resume my seat, but, on a point of order, Madam Deputy Speaker, may we assume that, for the rest of this Finance Bill, the strictures as they have operated in relation to me tonight will operate for every other speech? If so, over the next two days some Labour Members should spend their time in the Chamber, and every time that, in our view, Conservative Members step out of line—that is what has happened 727 today; representations were made about me—we should object. If that is so, we shall find that the Finance Bill terminates tonight by—
§ Madam Deputy Speaker
Order. As long as I am in the Chair, hon. Members will speak directly to the clauses or amendments before us.
§ Mr. Ian Stewart (Hertfordshire, North)
I very much regret the aspersions that have been made against you, Madam Deputy Speaker.
My hon. Friend the Member for Eastbourne (Mr. Gow) pointed out, in his usual vivid and graphic way, the absurdity that would follow from the implementation of new clause 1. I do not wish to add anything to what he said, but I wish to pick up one point made by the hon. Member for Workington (Mr. Campbell-Savours), not during his strange speech but in an intervention. He said that all the measures in the Budget would have to be checked for their environmental consequences before the Budget statement was made. Presumably, drafts of the Budget would have to be circulated around the globe and Governments of friendly, or perhaps less friendly, countries would have to relay information on the environmental consequences of clause 120 long before the Chancellor announced to the House that it was to be introduced.
That point adequately emphasises the nonsensical implications of the new clause. If the Opposition's purpose is to debate the usefulness of the tax system for dealing with environmental matters, they have a point that is common ground among hon. Members. I compliment my hon. Friend the Economic Secretary and his colleagues in the Treasury on the way that they have taken effective and practical steps to achieve that.
By speaking in support of the Government, I should not wish you, Madam Deputy Speaker, to think that I was making a bid for a vacancy at the Treasury and to return to where I spent much of the 1980s. Unfortunately, infirmity prevents me from attempting to do so.
Over the past few years, it has been shown how the tax system can be used to encourage environmentally friendly measures and to discourage those that are environmentally damaging. I refer in particular to the differential between the price of lead-free and leaded petrol. Some people criticised that differential as inadequate, but it has meant that almost a third of all petrol consumed is lead free.
I very much approve of the way that the Government have increased tax on company cars and I should like to encourage them to continue to do so, because so far as I can see there is still a substantial gap between the real value of a company car to the recipient and the amount at which it is assessed for tax. That is partly because the value of a car to the recipient has risen rapidly in recent years and it has been difficult for the tax charge to keep up, despite increases in successive Finance Bills. A further reason is that the amount assessed for tax is not a gross but a net figure. If the recipient had to buy, service and maintain his motor car, he would have to receive a substantially higher salary because he would have to pay income tax at the basic rate or perhaps the higher rate. If the value of a company car to a basic rate taxpaper were deemed to be £3,000, he would have to be paid £4,000 so that he could pay 25 per cent. in basic rate tax to be left with £3,000 to 728 spend on his car. A higher rate taxpayer would have to be paid £5,000 extra and, therefore, to pay £2,000 in tax before he had the necessary money left over.
I encourage Treasury Ministers to continue the difficult and probably not very popular process of increasing the taxation on company cars. I shall probably be lynched by half my constituents for saying that those allowances are unduly generous and have led to more motor cars, and larger motor cars, being bought than would have been the case if the tax system had been neutral on whether cars were provided privately or by employers.
I do not believe that the motor industry needs that incentive. Several of my constituents work for Vauxhall in Luton. The new Cavalier is an extremely effective motor car which has been taking some market share from imports. Much of the market in imported cars could be regained by domestic manufacturers, even if the number of motor cars sold did not increase as rapidly as it does because of the incentive provided under the generous company car taxation system.
I encourge my right hon. and hon. Friends in the Treasury to go further and to reduce the company car allowances in years when they feel that it is right to reduce the basic rate of tax. This option is not open to the Labour party because it wants to increase taxation. It will not be in a position, as we have been in one or two years recently, to reduce the basic rate. Those reductions have made it possible to make a larger adjustment to tax concessions such as those for company cars. I hope that we shall again reduce the basic rate and make the position fairer between one taxpayer and another. As things stand, in effect those who do not have company cars bear a higher proportion of the overall tax burden, whereas those who are fortunate to have the cars receive an undoubted financial benefit, which needs further adjustment.
Hon. Members set a bad example by having a three-tier system for reimbursing mileage allowance. A few years ago, when the new system was introduced—I think in 1984—I found that my mileage allowance went down each month because I had a small car. Those who had large motor cars, which used far more petrol and caused more pollution, found that their mileage allowance was rising. They were rewarded for their greater consumption of fuel and greater contamination of the environment, while I was penalised for doing the same thing on a smaller scale—although I do not complain. I do not understand the anomaly whereby we provide those who have large cars with a mileage allowance more than twice the size of that given to the owners of small cars. In examining the environmental consequences of the motor car—which must figure largely in our thoughts when we are discussing the new clauses—we must realise that we are not setting a good example to the rest of the country. I hope that the time will come when we can change that.
§ Mr. Simon Hughes
I shall deal shortly with the important and specific question of cars and car taxation that was raised by the right hon. Member for Hertfordshire, North (Mr. Stewart). I agree with some of his propositions.
I support, in general terms, the two propositions in the new clauses: that there should be an environmental assessment of proposals put by the Treasury regarding changes in taxation, and that the tax system should be used to give advantage to forms of motoring and technology that are environmentally acceptable.
729 There is nothing new about the proposal that economic policy should be subject to environmental assessment; indeed, my first criticism of Labour's new clause is that Labour has come round to that view so belatedly. I remember taking part in a debate almost as soon as I became an hon. Member—my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) also participated—in which we discussed proposals from the Royal Commission on environmental pollution for an environmental audit and assessment. My colleagues and I have urged that policy mechanism on Government for many years. I would also go further than the Labour party does in its proposals, although I accept that in the new clause it is addressing itself to the specific inter-relationship of the environmental assessment and budgetary proposals in the Finance Bill.
One of the ideas that have been adopted in other countries is that of environmental assessments of all Government policy. Just as we receive legislation in the House that incorporates a Treasury indication of the economic implications as part of the financial memorandum, so we should have an environmental assessment of all legislation, which should be presented to hon. Members as advice before they assessed their reaction to each specific piece of legislation. That proposal could easily be implemented.
The hon. Member for Eastbourne (Mr. Gow) asked a fairly rhetorical and somewhat whimsical set of questions about who should carry out the environmental assessment. If he really wants economic matters to be taken seriously by Government, he should address his mind to serious questions, and not to the somewhat irrelevant byways into which he went.
As part of the structure of Government, there should be a Ministry or office that has the same authority that the Treasury has now. At present, anything that requires implementation requires a Treasury imprimatur to ensure that it comes within the general acceptability of Government public expenditure plans. I do not dispute the propriety of that, but, if Britain is serious about environmental matters, all Government proposals should also go through a similar environmental audit. The only way to do that is to create a Department of environmental protection that has the same authority in government as the Treasury.
The hon. Member for Eastbourne asked who should do the environmental assessment. It would not be Treasury Ministers, as they have another principal function: they are there to be specifically expert in economic matters. However, they would be aware that no matters—even micro-economic matters—could be put through as Government proposals until they too had been vetted, costed and assessed in environmental terms. The hon. Gentleman is conservative in his view of what Government should do; he justifies it and relishes his conservatism, but I encourage him to be less conservative.
The Organisation for Economic Co-operation and Development now regularly recommends in its Social Trends an environmental assessment of economic proposals. Many other countries do an environmental assessment. As part of his annual address to Congress, the President of the United States uses indicators other than gross national product and gross domestic product. The 730 ultimate governmental responsibility falls to the Prime Minister, and the Prime Minister's office: it should also be able to assess—if we think that these matters are important—the environmental impact of anything we do.
If the Government are as serious in practice about environmental matters as they say they are in theory, I would hope that they would be considering the practicalities. We know that the Secretary of State for the Environment has employed an environmental adviser. The Government should be seriously considering including in their expected autumn White Paper the proposal that there should be a Department with the clout to assess the environmental implications of all matters of public policy. The same process should be continued in the Prime Minister's office. That would go much further than the Labour party's new clause, as it would cover all matters of public policy, not just the matters set out here. It would be a test of the Government's commitment to put the environment at the top of the agenda.
I entirely agree with the hon. Member for Islington, South and Finsbury (Mr. Smith) that it is impossible and illogical to regard environmental and economic matters as separate, as they are fundamentally intertwined. Government economic policy in this and every country will inevitably have an impact on the environmental agenda, on our environmental development and on environmental production and pollution. The levers of economics that we choose have a direct effect on the damage we do to or protection that we give our environment: the amount by which we tax resources, whether we tax carbon or whether we tax the use of vehicles—all those matters have a direct interrelationship, and we must recognise that.
One good development is that this debate has moved on from the debate in the 1980s, when many people thought that green politics and environmental issues were separate from other issues on the political agenda. There is now a ready awareness across the political divide, and among all who consider these matters, that environmental questions touch every area of public policy.
§ Mr. Cousins
I have been following the hon. Gentleman's argument closely, but I must express a sense of caution about the creation of an all-embracing Ministry, let alone one that is accompanied by a large central department in the Prime Minister's office. The stock of skills that the country has to enable us to carry out environmental assessments is, sadly, quite limited. We hope that, in the course of time, it will develop but it is limited now. Surely it would be entirely wrong to centralise and limit the impact of those environmental assessment skills by tying them all up in one great Department of State.
§ Mr. Hughes
The hon. Gentleman makes an important point, and I shall deal with it, although it merits more debate than we have time for now.
A great deal of work has been done on other economic indicators of an environmental nature. The hon. Gentleman may know of some—for example, the other economic summit, and the work of such people as Paul Ekins. A great deal of work has been done on the theory of assessing, in economic terms, the impact of environmental matters.
731 At the moment in government, there is an illogicality: the Department of the Environment deals with far more than just environmental protection matters. It deals with local government, local government finance, housing and many other matters. My colleagues and I believe that it would be better to have an environmental protection Department that took the responsibility for environmental matters from the Departments where it currently lies. For example, the Foreign Office has some responsibility.
§ Mr. Hughes
No—not until I have dealt with the matter raised by the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins).
It would be better if all areas of Government dealing with environmental matters came under one Ministry. It is important also to have somebody in the Prime Minister's office or in the Cabinet office because, unless the Head of the Government is persuaded about the importance of a subject, those who try to promote it will not carry the necessary clout. The Treasury is currently at the top of the Government pyramid; if the Treasury says yes, a policy will be approved, and if it says no it will not. However, at the end of the day it is the Prime Minister who would give the green light to policies proposed by an environmental protection Ministry and that is why there must be somebody in the Prime Minister's office to encourage her and her successors and point to the merit of such things.
§ Mr. Martlew
I am following the hon. Gentleman's argument. Is he suggesting that the Secretary of State for the Environment should present the Budget? That seems to be the obvious conclusion of the argument that the hon. Gentleman advances.
§ Mr. Hughes
The hon. Gentleman has not clearly understood what I proposed. The Chancellor will continue to present the Budget but the Budget and all other Government proposals should come before the House only after they have been through an environmental audit which would be carried out by a department of environmental protection. That would be headed by a Secretary of State of Cabinet rank who would have cross-departmental responsibility in the same way as the Chancellor.
New clause 4 deals with vehicles. I agree with the general propositions advanced by the right hon. Member for Hertfordshire, North (Mr. Stewart). For too long we have encouraged the use of large and high energy consuming vehicles and commensurately discouraged the use of small vehicles by giving a larger tax benefit to those who use gas guzzlers. That is not a sensible policy on taxation of our resources.
We have already given great advantages to people by giving them company cars and the tax benefits that flow from that. The company car should be given no advantage over the private car. In all our taxation policies we should seek to encourage the use of cars that are more environmentally acceptable, whether they are company cars or cars that are bought and serviced privately. The right hon. Member for Hertfordshire, North mentioned some of the ways in which the tax system can be adjusted to bring that about. It could be done by graduating vehicle excise licences, fuel could be taxed at different levels or tax 732 credits could be given for adaptations such as catalytic converters. We should not encourage people or companies to use vehicles that are not environmentally acceptable.
The proposition advanced by the Opposition is limited and muddled. It may be advantageous to give tax benefits to those who fit catalytic converters, but why should it apply only to company cars? Should not we try to discourage the use of company cars rather than encourage it? If we gave a tax benefit only to those who have company cars we would encourage the extension of company fleets. The Economic Secretary to the Treasury nods in agreement. There is an inherent inconsistency in such a proposition.
I welcome the indications of a few months ago that the Government are starting to address such questions. I am sure that the Minister and his colleagues will have an input to the White Paper proposed by the Secretary of State for the Environment. However, I read rather worrying reports that the Treasury will veto some of the tax implications in the proposals. I hope that the Minister will agree that we must have a consistent policy that deals with all vehicles.
There are many ways in which the motor car can be made more environmentally acceptable and, above all, of course, we should help the environment by discouraging its use. While it is wise to encourage the fitting of catalytic converters, this proposal is a partial and muddled solution. It shows that the Opposition have a long way to go in thinking through the implications of their belated conversion to green issues and their linking to economic policy. Their conversion is apparently still no more than skin deep.
§ Mr. Forman
I shall be brief. The new clause raises important matters and is a legitimate device by which we can discuss green issues, and especially the interaction between environmental policy and economic policy. I commend the new clause for that.
For straightforward reasons, it is unnecessary to add to the Bill the requirements called for in the new clause. My right hon. Friend the Chancellor has impeccable green credentials and carefully considers such matters when preparing his Budget. He has a reasonable record for introducing environmentally friendly measures. The hon. Member for Islington, South and Finsbury (Mr. Smith) mentioned some of those, but only disparagingly. He talked about the tax differential between leaded and unleaded petrol, the tax scale on company cars and mileage allowances which were adjusted in Committee.
I would wager the hon. Gentleman that, by the end of this Parliament or some way into the next, when I hope that my right hon. Friend will still be Chancellor of the Exchequer, we shall see a wide range of environmental measures which will go a long way towards meeting the needs of that aspect of our policies. I am confident that my right hon. Friend the Chancellor will continue to do what he judges to be prudent in this area of environmental and fiscal policy.
When one looks at the proposal on its merits—which is often a dangerous thing to do in the House—one finds an almost fatal flaw. I sought rather politely to raise that in an intervention on the hon. Member for Islington, South and Finsbury. It is not at all clear to me where the hon. Gentleman, if he were a Treasury Minister, would find the necessary competent advice of the type that he suggests. The hon. Member for Workington (Mr. Campbell-Savours) made it clear that we would be talking about 733 advice proffered before the Budget, and one must assume that such expert advice, which is often highly technical and in an area of scientific expertise that is not widely spread in Britain or throughout the world, would somehow be available either in Whitehall or in the Treasury.
§ Mr. Campbell-Savours
The hon. Gentleman should be wary of referring to an environmental assessment document that might be produced prior to a Budget, because new clause I says:Not later than 14 days after the date on which any Finance Bill is read for the first time".I am sorry to correct the hon. Gentleman, but he might find himself ruled out of order.
§ Mr. Forman
I am grateful to the hon. Gentleman. In an earlier intervention, he said that advice would be available in advance of the Budget.
§ Mr. Forman
We can agree that that advice would form the basis of the Budget statement.
My key point is that I do not think that there is a great fund of competent advice in the Treasury. The Treasury is renowned for its formidable advice to Ministers, but I do not think that the environment is one of its strongest areas. Perhaps the Minister will take that into account. I am not at all sure that the well-known and honoured tradition of Budget secrecy would be assisted by inviting people from the Department of the Environment or experts from the inspectorate of pollution or any such worthy body to become more fully involved in the process of Budget formulation in advance of the Finance Bill.
§ 7 pm
§ Mr. Chris Smith
I am grateful to the hon. Gentleman for allowing me to intervene. I have considerable respect for him. I hope that his rise through the ranks matches that of other former Parliamentary Private Secretaries to the Chancellor of the Exchequer. In this instance, however, I believe that he is making a bad point. If, for example, the Chancellor of the Exchequer is proposing in his Budget changes in taxation measures that apply to cars, he will consult the Department of Transport in preparing it. There are no leaks when those consultations take place. Why should not the same principle apply to the Department of the Environment?
§ Mr. Forman
The main sources of advice for the measures that the hon. Gentleman outlined in introducing the new clause would have to come from the scientific community, including Her Majesty's inspectorate of pollution. Many people within the scientific community are not covered by the Official Secrets Act 1911, and are not within Whitehall in the same way as officials of the Department of Transport, for example.
I do not wish to make heavy weather of the argument. I wish only to emphasise that the hon. Member for Islington, South and Finsbury is being rather sanguine about the prospects of achieving the quality and range that would be necessary to make sense of the new clause.
My objection to the new clause goes further than that. I am unconvinced in principle that it is necessarily wise to introduce what must be a large element of greater complexity into the taxation system. We are all familiar 734 with the argument against additional complexity, even when it is introduced in furtherance of a good cause. Greater complexity introduces inefficiency and distortions, which have an effect on the behaviour of individuals in dealing with the tax system. Above all, it increases what are known as compliance costs, all of which tend to reduce the revenue raised from what it would have been in any given fiscal approach.
I understand the argument advanced by the hon. Member for Islington, South and Finsbury. I think that it is interesting for the House to have a brief opportunity to discuss the interaction between environment and economic policy, and I think it is important for Conservative Members on another occasion to have the opportunity of hearing what the Opposition think about measures such as a carbon tax or the idea of—
§ Dr. John Marek (Wrexham)
Will the hon. Gentleman reflect on what he has just said? Surely environment taxes would increase economic efficiency.
§ Mr. Forman
There is a case for saying that such taxes would lead to an increase in resources. Much depends on how the concept is understood and measured. It is a difficult concept fully to understand, because resource economics is still in its infancy, as I believe the hon. Gentleman would concede. The ideas that it embraces need much further thought before they are adopted and set out in a Finance Bill.
I think that the House would be assisted if it had the benefit of a thoughtful and expert speech from my hon. Friend the Economic Secretary to the Treasury, and I am sure that we shall hear one when he replies to the debate. I am sure also that he will tell us that, although the Government are sympathetic to the environment and wish to make proper progress to protect it, they do not accept the new clause.
§ Mr. Martlew
I support new clause 1. It seems to be a sensible proposal. It would be desirable if the Chancellor of the Exchequer were obliged a fortnight after the Budget to explain to the House and the country its effect on the environmental problems of the nation. That obligation would concentrate the mind of the Chancellor of the Exchequer on the environmental consequences of the Budget during his preparation of it. He appears now to have regard to political consequences first and then fiscal consequences. The environment lobby seems to have no input.
Last year's Budget led to no real increase in taxation on cigarettes or alcohol. Would the same policy have been adopted if the Chancellor of the Exchequer had been obliged to tell the House after making his Budget statement, "We decided not to increase the tax on cigarettes, and that will mean X million extra cigarettes smoked this year. That will result in Y deaths and will increase the costs of the national health service by £Z"?
Similarly, last year's Budget did not lead to a real increase in the taxation of beer, wines and spirits. The new clause would place an obligation on the Chancellor of the Exchequer to explain to the House that his policy would result in so many extra gallons of beer being drunk, along with so many more bottles of spirits, and that that additional consumption would lead to so many extra deaths through alcohol-related diseases as well as percentage increase in the crime rate. That would be the effect of the environmental audit. I doubt whether a 735 Chancellor of the Exchequer would wish to explain the consequences of concessions that were made only for political reasons.
The Economic Secretary to the Treasury used to be the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food. He will remember especially well the famous 1988 Budget of the right hon. Member for Blaby (Mr. Lawson). The right hon. Gentleman is not in his place, and he will probably be absent for four days of the week because he has found himself another job. The House will remember that considerable pressures were placed on the then Chancellor of the Exchequer by many people and organisations because Terry Wogan, among others, was making a great deal of money by investing in tree planting and enjoying major tax concessions. The right hon. Member for Blaby decided that that must stop. He decided to bring the concession to an end there and then without warning anyone that that was to happen. There was no phasing out of the concession. The relevant clause in the Finance Bill of 1988 was generally accepted, but it was disastrous for the forestry industry. About 9 million saplings were destroyed in the year following the tax change. Tree planting has still not recovered.
§ Mr. Keith Mans (Wyre)
Will the hon. Gentleman confirm that the Labour party supported the decision of my right hon. Friend the Member for Blaby (Mr. Lawson) in the 1988 Budget?
§ Mr. Martlew
I have already said that it was generally accepted in the House that the decision was a good one. Hindsight tells us that the decision was wrong. If the hon. Gentleman reads the reports of the Select Committee on Agriculture, he will find that that is the Committee's view. If the environmental audit obligation had applied, the problems that followed the decision would have been brought to the attention of the then Chancellor of the Exchequer.
We are being told that we are facing great problems because of CO2 emissions and global warming. Planting more trees makes a significant contribution to resolving the problem of global warming. The decision of the then Chancellor of the Exchequer in 1988 had a disastrous effect on that aim. The right hon. Member for Blaby opted for the short-term political expedient and ignored long-term environmental consequences.
We must have an environmental audit. The Chancellor of the Exchequer must have the responsibility of telling us why he has taken certain decisions and the effect that they will have on the environment.
There is a need for a nitrogen fertiliser tax. It is accepted that putting nitrogen on the soil has many advantages. We grow more and better crops, but we now have a large surplus. A tax on nitrogen fertiliser would dissuade farmers from using nitrogen on the land and would encourage the water industry to remove nitrates from water, which render it unfit for human consumption. If we are living in a world in which the polluter pays, surely a tax on nitrogen fertiliser would be a good start.
The Government have made concessions over unleaded petrol. That is to be welcomed. However, they did not go far enough in the Budget. There has not, therefore, been any increase in the use of unleaded petrol. I note with dismay that the price differential between petrol and diesel 736 has been reduced over the years. Provided that diesel engines are kept in good repair, diesel is preferable to leaded petrol.
I disagree to some extent with my Opposition Front-Bench colleagues about vehicle excise duty. The Labour party has proposed that larger engine sizes should attract an additional tax. I understand the logic of the proposal, but I believe that it would be far better to phase out vehicle excise duty—the car tax—and increase the price of petrol. I was told in Committee that the price of petrol would have to be increased by 40p a gallon. That is on the high side; it presupposes that everybody has a vehicle licence. I noticed in the House of Commons car park the other day a few vehicles that were not licensed. However, they had a lot of dust on them, so perhaps they had not been taken out of the car park for a year or two. That is very annoying, especially if one cannot find a parking space.
The Government have been dishonest in not increasing the cost of the car tax for the last four years. Do the Government intend to abolish the tax by keeping it at the same level when inflation is increasing dramatically? This year's car tax will be worth much less than last year's because inflation is at least 10 per cent. The Government appear to be carrying out that policy by stealth. If we really want to reduce energy consumption, we should abolish the car tax and increase the price of petrol. Then the polluter would pay. Those who run cars with big engines and who do a large mileage would pay much more, while those who use their cars for essential purposes only, not for business or leisure, would pay less.
I understand that Stockholm is considering introducing a system whereby regular car users coming in to the city will have to buy a season ticket for the public transport system and display it on their windscreens. That would result in those who have a season ticket for the public transport system using it. The money raised would be used to provide a better and cheaper public transport system. I believe that a similar policy would be popular in London.
The Finance Bill does nothing to encourage recycling. Tax concessions have been provided for refuse tips. That is the last thing we need; we ought to reduce dumping by encouraging recycling. Disposable bottles and cans that are not recycled should attract a tax penalty. The money raised ought to be handed to organisations that are prepared to go to the expense of recycling bottles and cans.
The Finance Bill is a wasted opportunity. The number of ways in which we can help to save the world is strictly limited. I hope that next year there will be a Labour Chancellor of the Exchequer who will put forward green policies. If, however, the election is delayed beyond next year, note will have been taken of the speeches tonight.
§ Mr. Roger King
Nobody denies that there are fears about the environment. However, new clause 1 takes us no further along the way. It does not help us to tackle the fundamental challenges that we face.
Many years ago a new industry was created that has become almost self-perpetuating and impinges on all our lives. I refer to the race relations industry. Whenever anyone in Birmingham's local authority wants to do something, there is always a reference to the implications for race relations. In most cases there are no implications for race relations. Nevertheless, behind the inclusion of 737 those words is the implication that several people have been involved in evaluating whether there are any race relations implications.
Embarking on environmental assessments would lead to a brand-new industry which would provide additional work for bureaucrats and administrators. They would have to examine every facet of our lives to establish the environmental impact. My hon. Friend the Member for Eastbourne (Mr. Gow) asked, in his cogent speech, which Department would have the job of evaluating environmental assessments. I go further than my hon. Friend. A department of environmental assessment would be required. Nothing else would suffice.
My fear is that as soon as that department had been established at national level, every council chamber in the land would have to take account of environmental assessment as a matter of law. That may or may not be good in some people's eyes, but I believe that it would do nothing to improve the local environment and local amenities and to provide the infrastructure that we need. Every suggestion would be shipwrecked because of environmental assessment. Therefore, it would not be a good step forward.
New clause 1 charges the Chancellor of the Exchequer with producing an assessment of the environmental effects, if any, of each clause of a Finance Bill. How on earth the Chancellor could do that with all the clauses in the Finance Bill, I do not know. I cannot see that there is any environmental assessment to be made of lodgings for officers in charge of a distillery, or of the power to assess, or of supplies to groups, domestic accommodation, goods shipped as stores, or pool betting duty. An army of bureaucrats would be required to establish that there was no environmental impact.
In previous years I was instrumental in tabling new clauses for inclusion in Finance Bills. I sought to provide financial encouragement for those who fitted catalytic converters to their cars. Rather than new clause 4, I should prefer a fiscal measure that applied to everybody who buys a car that is fitted with a catalytic converter. The new clause would provide financial encouragement only to fleet owners or their employees. That is wide of the mark. Fleet cars are bought every two or three years. To suggest that, beginning in April 1990, the legislation should be retrospective would create chaos. Cars that are allocated to employees are not necessarily the cars that remain in their use for the entire year.
The clause says that a 5 per cent. discount would be allowed on personal tax allowances if people used a car with a catalytic converter for part of the year. However, what happens about those who have access to a car pool and take whatever car is available? How could such a system be worked out? It is a recipe for confusion and cannot possibly work. It will not benefit the environment one iota.
New clause 1 cannot work, because it would be impossible to monitor and evaluate and would require an army of bureaucrats. New clause 4 cannot work because it would be grotesquely unfair and impossible to operate.
§ Mr. Elliot Morley (Glanford and Scunthorpe)
With respect, I do not think that the hon. Member for Birmingham, Northfield (Mr. King) understands the process of environmental impact studies. A great deal of 738 data already exists in data banks, computer programmes, analyses and reports. That has been collected over many years. If there are to be environmental impact assessments, that data will have to be evaluated and people may have to be employed to do that. However, that is a small price to pay for improving our environment and ensuring that our fiscal policies are linked to a sensible and sound environmental programme.
I remind the hon. Member for Northfield that the EEC has produced a directive under which major planning applications will be subject to environmental impact assessment studies. That will be European law. If other countries are aware of the importance of such studies, there is no reason why the concept cannot be extended to financial policy.
It is an important concept and I support it because we are talking about environmental impact assessments and not simply taxation policy. In some cases, even if people damaging the environment were forced to suffer a tax penalty, they would continue to operate in the same way and simply pay the penalty if it suited them. Environmental impact studies are a more sophisticated way of approaching the matter.
§ Mr. McCartney
Local authorities that currently carry out environmental impact assessment studies on, for example, opencast coal include within them the impact of the local economy in terms of new job opportunities and the loss of other job opportunities. Such investigations try to assess what the consequences will be for the local and regional environment and employment opportunities. Local industry and planners welcome such assessment studies.
§ Mr. Morley
I am grateful to my hon. Friend for making that point, as it demonstrates yet again that in terms of being sensitive to the financial, social and economic needs of local communities, local authorities blaze the way. The Government seem to be inert in dealing with policies that would benefit local people.
Many hon. Members have mentioned the advantages of new clause 1 and I do not wish to repeat them. However, I stress that the environmental impact of financial policies will have a great bearing on industry and social life in Britain.
We have heard a great deal about company car taxation policies. I recognise that tax relief on company cars has benefited the car industry and motor dealers. However, it has been a poor use of public resources. If the tax relief were restructured according to engine size, as has been suggested, car dealers or manufacturers would not be disadvantaged as they would construct cars to meet those requirements.
It might be worth considering for the next Budget that if we accept that there is a case for tax concessions on company cars—that could be argued for those to whom the car is essential—we should give tax concessions to those who buy season tickets for public transport. If we encourage people to shift from private car use to public transport, it could lead to a tremendous environmental advantage and benefit our infrastructure. There is a strong case for providing a tax concession to those who buy season tickets, whether for the train or bus, because they are doing the environment a favour by travelling to work in that way. It is not unreasonable for them to deserve recognition for that.
739 My hon. Friend the Member for Carlisle (Mr. Martlew) mentioned the proposals in Sweden and I understand that similar proposals have been put forward in Paris whereby those who have the advantage of a city centre parking space will have to purchase a season ticket for that city's public transport system and display it on the windscreen as the price for that advantage. That is a reasonable suggestion. It should be extended to the House of Commons. There are cars in the car park gathering dust. Some people seem to be taking advantage of a first-class facility in the centre of London for storing their antique cars and aging Rolls-Royces. I see no reason why such people should not make a contribution to the public transport system by buying a season ticket.
The great advantage of the new clause has not been recognised. We have people such as Professor Pearce advising the Government and making some useful suggestions. I do not wish to criticise him, as he is on the right lines. However, it is not good enough to have a tax regime based on a cost penalty for those who are damaging the environment. As I have said, many producers would simply pay that penalty. For example, many of those who come to central London and enjoy the benefit of car parking space would cheerfully pay a road-pricing tax. They would pass it on to their company accounts and then to their customers. It would not do a great deal to stop cars coming to the centre of London. That is why we need something more sophisticated than a simple tax regime. We must have an environmental impact study of the benefits to the environment, the economy and our society.
I have not heard a good case against the new clause. Although there might be different ways of applying it, one cannot get away from the fact that today there are many pressures on the environment such as global warming, overcrowding on our roads and the collapse of our transport infrastructure. Much of that is related to Government policies, but that can be argued in other places at other times. We can use our economic policies, particularly taxation policy, to encourage certain parts of the economy such as the development of less waste in packaging. There is no reason why those who produce glass bottles and jars designed to be recycled should not have some tax concessions for doing so. It is better for the environment and, in the long term, the economy to encourage people to use recyclable glass containers rather than disposable ones which may have taken a great deal of energy to produce. Such issues can be addressed through a taxation regime.
It is not good enough to use taxation as a way of penalising the bad and rewarding the good. We must take account of the long-term environmental impact of what we want to achieve and the benefits that will result.
§ Mr. Cousins
The debate has been extremely depressing, and I do not intend to speak for long and depress myself further. Each of us recognises that there are certain problems which force their way on to the political agenda. We do not have a choice in that matter. Our choice is either willingly to accept these problems on our political agenda and find a framework to deal with them, or to confine them and keep them off that agenda, and deal with them later in less favourable circumstances, using cruder methods than we would have used if we had been willing to deal with them sooner.
740 Many problems do not appear on the balance sheet of society, although they impose long-term costs. The proposals in new clause 1 to put these matters on the public balance sheet must surely be in the long-term interests of everyone. It is foolish to deceive ourselves that we can continue using the world's capital stocks and resources as though they were not finite, given the horrendous costs that will result from the near-exhaustion of those stocks.
The framework within which we discuss these matters is absurd. We are either treated to a comic display of entertaining irrelevancies or plunged into a swamp in which people refer to administrative mumbo-jumbo as an excuse for not dealing with the problem. As I said in an intervention during the speech of the hon. Member for Southwark and Bermondsey (Mr. Hughes), I do not particularly welcome a scenario in which the stock of skills which can be deployed to assess the environmental impact is contained within civil service rules and within a Ministry. I should prefer independent agencies on which the Government, local authorities, companies and the public could draw. The last thing I would want is that stock of skills deployed in such a way that only the Government within the confines of civil service rules had access to it. It would be worth discussing that important matter, yet it has not been taken seriously in this debate.
§ Mr. Simon Hughes
My proposition did not anticipate that the Government would be the sole controller of that expertise. The academic world is vital, and we must retain independent agencies to give advice to everyone. I agree that there is a problem in terms of the number of people to go around, but it should never be proposed that only the Government should draw on that resource.
§ Mr. Cousins
I welcome the hon. Gentleman's point. If I may say so in the politest possible way, however, it puts a gloss on some of his remarks, when he placed far too great an emphasis on the creation of Ministries to secure his objective. No doubt he did that with the best of intentions, but he set up the Aunt Sally with which the hon. Member for Birmingham, Northfield (Mr. King) dealt. We must avoid such an idea.
In new clause 1, we are not talking about taxes to deal with environmental problems; we are asking the Government to consider these issues as part of their normal routine. It would be worth considering the effect on the environment of a variation in income tax. That would not just be an academic exercise. It might point to important conclusions about our taxation system. My hon. Friend the Member for Carlisle (Mr. Martlew) referred to the last glorious Budget of the right hon. Member for Blaby (Mr. Lawson). If the tax concessions advocated in the right hon. Gentleman's Budgets had been studied in terms of their environmental impact, they might have been reconsidered, and the difficulties might have been perceived.
The Standing Committee on the Finance Bill dealt with the petroleum revenue tax system and taxation of waste disposal sites. Our debates were limited because we did not have the information to determine whether the most efficient, effective and cheapest methods were under discussion. We had no idea of the effect of our proposals on the cost structure of the relevant industries.
Many hon. Members in this debate and elsewhere have been willing to consider various proposals, for example, 741 for carbon taxes, which is an interesting academic idea. I hope that, before we essay that development, there will be careful examination of the environmental and cost implications. By not considering such issues now, the Government are not providing themselves with the information, expertise, knowledge or understanding that would enable them to resist proposals which appear later in a much more crude and much less acceptable fashion. We cannot disregard the interaction between the taxation system and the cost structure of industry.
My fear after listening to the debate is that we shall manoeuvre ourselves so that we are encumbered by blunderbuss solutions which have unwarranted and unwanted effects on the cost structure of industry. That is why it is necessary for the Government to generate the necessary information now and start subjecting taxation and other proposals to scrutiny. The choice is not whether but when. It is important that, when we enter the era of environmental taxation, we do so against a background of acknowledged expertise, understanding and thoughtful consideration of all the secondary issues and that we do not land our industry with cost consequences that cannot be supported and are not in the interests of our people. The problems are not avoided by not confronting them now. Only by confronting them now and testing everything that we do against those considerations can that bad outcome be avoided.
§ Mr. Kenneth Hind (Lancashire, West)
I came into the Chamber for this debate only to hear some of the most utter drivel I have heard for a long time. My colleagues and I are very much aware that there should be environmental assessments of what we do as we move the country forward and develop the economy. There is no need for the clause. The Government are led by a Prime Minister who is driving forward the country's consciousness of green issues—I refer to the London conference on CFCs, to her awareness of the greenhouse effect and of carbon dioxide emissions.
I do not believe for one moment that any Minister does not consider the environmental impact of what he is doing. For that reason, the clause is totally irrelevant and unnecessary. I shall have a laugh at the Opposition's expense—
§ Mr. Hind
No, I shall not give way.
The clause provides that the Chancellor of the Exchequer is required,not later than 14 days after … any Finance Bill is read for the first time in the House",to set down his environmental assessment. The Opposition are so short of ideas that the Treasury must provide them with environmental arguments against any new tax proposals that it brings forward.
Surely, as elected representatives of the country, we have the wit and the sense to be aware of what is happening to the environment and to be able to put forward arguments to deal with such issues. If we cannot, it is pretty pathetic.
New clause 4—
§ Mr. Hind
No. We are up against time. I am sure that the hon. Gentleman can make his own speech.
It is a splendid idea that we should all have cars fitted with catalytic converters, and I believe strongly in it, but why should it apply only to fleet cars and company cars? The clause is nonsense; if it is to have any sensible basis, it should include all cars. Hon. Members have to buy their own cars, as do thousands of people outside the House. Why should they be excluded from the tax concessions advocated here, which would give them the incentive to fit catalytic converters?
On the grounds that I have given, the new clauses are not worthy of merit, and I advise my hon. Friends to dismiss them.
§ Mr. McCartney
The contribution of the hon. Member for Lancashire, West (Mr. Hind) proves that if one wants to participate in a debate it is best to listen to it and to know something about the subject. The hon. Gentleman is a member of the Government's Back-Bench effluent tendency. On occasions he tries to upset Opposition Members and pick an argument. We know the hon. Gentleman well. He comes here and argues against new clause 1 and against environmental assessments. He does not do that in his constituency when planning applications in Up Holland and elsewhere are involved—he jumps up and down screaming in my local newspaper about the need for environmental impact assessments on planning matters in his constituency. He says one thing here, in an effort to move from the Back to the Front Benches, and another in his constituency, because he hopes that he will remain here after the next election.
§ Mr. McCartney
The hon. Gentleman knows Up Holland very well.
New clause 1 fundamentally affects the way in which future Governments will operate. We are dealing not merely with a new clause, but with the whole concept of government at national and local level, and with the impact on the environment of the relationship between the Government and industry. We are also dealing with the way in which local authorities have an impact on local communities and with their relationship to the development of industry and the provision of services in the public and the private sector.
Our attempts to discuss the issues tonight are about five years behind such attempts in Europe and the United States. Hon. Members on various Select Committees have been abroad to study these issues, and we have seen that environmental impact assessment studies are used more and more in the United States when water and electric utilities are being developed. European Governments are increasingly aware, irrespective of their political persuasion, of the need to provide environmental assessments for their policies. At local authority level, there has been an attempt, albeit imposed by the European Commission, to introduce environmental impact assessments.
As you now, Mr. Deputy Speaker, as Chairman of Ways and Means, there have been amendments to the private Bill procedure. In future, new private Bills will have to have an environmental impact assessment attached to them; without that they will not be able to proceed. Those are welcome extensions of the use of environmental impact assessment of policies at national and local level, but we must go further. That is why my 743 hon. Friends are pushing out the parameters of policy discussion on the environment in Britain by means of the new clause.
All hon. Members are sometimes faced with environmental issues that impinge on the local economy and on regional environmental considerations. The hon. Member for Wyre (Mr. Mans) is involved with other hon. Members representing constituencies in Lancashire in the issue of long outfall discharges of sewage and attempts by Conservative and Labour county councillors to prevent such a policy being imposed locally because the effect that such discharges will have on the sea and the Lancashire coast is totally unacceptable.
Hon. Members from both parties in Lancashire and the Labour Lancashire local authorities have argued against such a policy, and have argued for an environmental impact assessment of the cost of introducing such a scheme as well as of the cost to the environment. The use of impact assessments forced the Government virtually to abandon the long fall discharge of sewage on the Lancashire coast. The policy was changed only because of such pressure. Until the assessments were carried out, the Government said that they would introduce the scheme because it was cheaper to treat sewage by dumping it at sea than to invest in inland sewage treatment plants.
§ Mr. Mans
Does the hon. Gentleman agree that, despite an environmental impact assessment on the scheme that he mentioned, done by the local authority in Wyre, the long sea outfall is still likely to go ahead? Does he agree that merely having an environmental impact assessment had no effect upon that decision?
§ Mr. McCartney
Assessments do two things: first, they raise public awareness of the issues. Secondly, Ministers are ill-prepared or unprepared to take the right action when evidence is presented, and the new clause would prevent Ministers from not taking environmental impact assessments fully into account. Hon. Members' experience of such matters should persuade them to support the clause rather than to oppose it.
We cannot simply rely on taxation as a way of dealing with environmental assessments. It is fine for short-term issues, or to impose certain environmental changes on agriculture or industries such as chemicals. But, in the long term as well as introducing changes in taxation, we have to change attitudes of mind on the way in which we deal with environmental issues. Even when fines of £1 million or more have been imposed by the courts, oil companies in Britain are still not prepared to deal seriously with the issue of discharging oil into places such as the River Mersey. The imposition of huge fines in court is still not deterring some companies. We must therefore change the philosophy and attitude of industry towards the environment in terms of the production processes that affect the environment.
The new clause is simply a step along the road to changing attitudes in the Government, industry, the local authorities and the wider community. Without the change of attitude, taxation changes will work only in the short term and, in the long term, the processes that debilitate and destroy the planet will continue unabated. We must change our attitudes fundamentally. Therefore, I welcome 744 the new clause as part of the argument to ensure that those changes take place in Britain—and throughout the world—before the planet is damaged irrevocably.
§ The Economic Secretary to the Treasury (Mr. Richard Ryder)
At the outset of what I describe as a lively debate, the hon. Member for Islington, South and Finsbury (Mr. Smith) claimed that the Government do not take account of the effects of our financial policies on the environment and that the new clause is necessary to oblige us to do so. As the hon. Gentleman knows full well, that claim is incorrect. When preparing the Finance Bill every year, we take full account of all relevant factors—environmental, financial, those relating to employment, and a range of others. It would be irresponsible not to do so.
The new clause would not result in the Treasury paying greater attention to the environmental effects of our policies because we already take full account of such effects during the pre-Budget consultations when we consider all the representations that are made to us by a range of outside bodies, including those representing the environmental lobbies.
§ Mr. Campbell-Savours
Is the Minister suggesting that the comments of his hon. Friend the Member for Eastbourne (Mr. Gow) were ill-founded when he assumed that Ministers would not be able to find the time to do all these things? Is the Minister saying that his hon. Friend was simply wrong?
§ Mr. Ryder
If we were to accept the new clause, we would necessarily have to provide an environmental assessment along the lines recommended by the Labour party. If those circumstances turned out to be the case, I cannot envisage a more suitable hon. Member to provide us with the environmental dimension of monetary policy than my hon. Friend the Member for Eastbourne (Mr. Gow). He is so well-suited to considering all the environmental aspects of the Government's financial policy as to write a long thesis on the environmental dimensions of monetary policy and especially M0. I should not be surprised if, before the summer was out, my hon. Friend did not send me a clipping from his local paper, "The Eastbourne Trumpet," providing us with an article along those lines. I very much look forward to receiving a copy in the next few months.
I do not think that the new clause would lead to the House being better informed about the effects of the Finance Bill. It would be an unnecessary claim on the resources of the Government to be obliged to prepare a specific assessment of the environmental impact of each clause. My hon. Friend the Member for Birmingham, Northfield (Mr. King) was right to say that the new clause would lead to extra bureaucracy and would not cast any extra light on Budget changes.
As the House knows, notes on clauses are already produced and provide a summary of the purpose of Government clauses. They provide most of the technical information that the House requires. As hon. Members know, if they have a specific and detailed question about the impact of any clause—environmental or otherwise—they can ask a Minister to expand on the subject in Committee; they can write to a Minister; they can table a question; or they can bring a delegation to see a Minister.
In Committee we had some interesting and constructive debates about the environmental aspects of the Budget. Debates on the early clauses related to indirect taxes and 745 when we discussed vehicle excise duty, for example, the hon. Member for Wrexham (Dr. Marek) made some valid points . I recall saying two or three months ago that his advice to previous Ministers, in his capacity as shadow economic spokesman, was taken into account when we framed the VED policy. The same applies to any other hon. Member who wishes to take an interest annually in this legislation. I see no reason to believe that the existing arrangements do not allow hon. Members to come to a view on the merits of a clause, and to take all the relevant considerations, including environmental ones, fully into account.
The Government place—and will continue to place—a high priority on environmental issues. We have taken several steps to benefit the environment, such as action on CFCs, on sulphur dioxide and nitrodioxide emissions, on water quality, and with the establishment of the climatic change centre. The increase in the differential in favour of unleaded petrol in this year's Budget should increase the uptake of unleaded petrol to 40 per cent by next year's Budget. All that has been achieved within four years of starting down this route.
The Environmental Protection Bill, which has just passed through the House, provides for integrated pollution control, strengthens local authority controls to combat air pollution and to control litter, and includes provisions on waste disposal and recycling. As the House knows, we are preparing a White Paper on the environment, which will be published in the early autumn.
The Budget measures for unleaded petrol and relief for waste disposal operators will bring worthwhile environmental benefits. The Government are conscious of the importance of the environment, but a whole range of factors must also be considered, including, as my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) emphasised, scientific analysis and the effects on the economy in determining the right response to problems. We are prepared to make tax changes for environmental reasons, where tax is the right instrument with which to do so. Unleaded petrol was an example. We shall continue to ensure that measures are based on the best possible scientific and economic analysis.
The hon. Member for Islington, South and Finsbury alleged that the car scale increase had been small. He knows that that is not the case. As my right hon. Friend the Member for Hertfordshire, North (Mr. Stewart) pointed out to the hon. Gentleman, over the past three Budgets, the Government have tripled the car scales, having inherited small scales from the last Labour Government. The hon. Member for Islington, South and Finsbury suggested that we should issue a green book at the time of the Budget each year, in addition to the Red Book. Does that mean that we shall also have to provide a crimson book for energy, a purple book for agriculture, and a grey book for education? Where do we stop in producing such documents? The Opposition have not made it clear. But perhaps when the hon. Member for Wrexham replies to the debate, he will do so.
New clause 4, which has also been tabled by the Labour Front Bench, seeks to provide an incentive to fitting catalytic converters in company cars by reducing the car benefit scale charges where that has been done. That proposal is an unnecessary measure which would 746 complicate the tax system, reduce the tax revenue, and introduce a new fiscal incentive for company cars. That is probably unintended, but several of my hon. Friends, including my hon. Friend the Member for Northfield, have pointed out that consequence. However, it would make very little difference to our progress towards the important objective of reducing car and lorry pollution. The House knows—several hon. Members have mentioned it—that the EC exhaust emission standards will require all new petrol engine cars sold in the EEC to be fitted with a catalytic converter by the end of 1992. Company cars are replaced every two or three years on average. As the company car fleet is predominantly composed of new cars, the new EC provisions will bite quickly into the company car sector. For that reason, the Government consider that a fiscal incentive to change over to cars with a catalytic converter is unnecessary in view of the obligations that we have been asked to meet by the EC.
As I have already described, the proposal would be expensive. With just under 2 million company cars on the road, a cost of about £1 million would be incurred for every 1 per cent. of cars fitted with converters. Much of that cost would be dead weight, for example, as employers begin to buy more cars fitted with catalytic converters in the run-up to 1992. Indeed, some manufacturers already fit converters to all their cars.
The other defect of the clause is that it has no time limit. It would continue to run even after we met our obligations in 1992 when converters will be compulsory for all new cars. By then, the proposal would cost approaching £100 million for no benefit whatever.
§ 8 pm
§ Mr. Hind
Is not by far the most important point against the proposal that there is no reason for introducing a tax incentive for company cars alone to fit catalytic converters? Surely our aim should be that all cars are fitted with catalytic converters to reduce the fumes from cars. Therefore, people who buy their own cars, who represent a large section of the public, should not be cut out from such a tax benefit.
§ Mr. Ryder
I agree with my hon. Friend. I shall deal with that argument shortly.
The Government believe in principle that benefits in kind should, as far as possible, be fully taxed to provide neutrality in the tax treatment of payments in cash and in kind. The benefit to the employee is not reduced by fitting a catalytic converter to a company car. In general, larger and more expensive cars tend to be fitted with catalytic converters.
While accepting that the new clause would put back the Government's determined action over the past three years, in particular to reduce undervaluation of company cars for tax purposes, the Opposition have argued that company car taxation should be increased, partly for environmental reasons. In the new clause, they would introduce a new fiscal privilege confined to company cars which would have no counterpart—this is the point made by my hon. Friend the Member for Lancashire, West (Mr. Hind)—for the private motorist who must buy his own car. I amplify not only the remarks made by my hon. Friend but the argument deployed by the hon. Member for Southwark and Bermondsey (Mr. Hughes). Over half the number of cars purchased by individuals go to companies for purposes such as short-term car hire, car pools and driving 747 tuition, which are not subject to the scale charges. The new clause would do nothing to encourage that group of purchasers to buy cars equipped with catalytic converters.
My hon. Friend the Member for Northfield, with his experience of Birmingham, knows that the motor industry is gearing itself up for the new regime that will apply after 1992. It will require more than simply bolting on a catalyst-equipped exhaust. The introduction of catalyst-compatible engines and engine management systems, particularly for smaller cars, will take time.There is no question of providing an incentive to fit catalytic converters. It has to be done. We have agreed it with the EC. There are cases for incentives in certain circumstances, but they should be argued on their merits. I regret that I have to say that I do not think that the case has been proven here. I would rather that the money which would be lost to the Treasury were spent on other environmental concerns."—[Official Report, 11 July 1989; Vol. 156, c. 902.]Opposition Members, including Front-Bench spokesmen, will realise that I have just quoted directly from the speech made by the hon. Member for Wrexham in last year's debate on the Finance Bill on the Floor of the House on a similar proposal to reduce special car tax for cars fitted with converters. I say to my hon. Friends and to the House that the hon. Gentleman's arguments deployed then are as true today. For that reason, I urge the House to reject the new clause.
§ Dr. Marek
We have had a good debate, with the exception of the speech made by the hon. Member for Lancashire, West (Mr. Hind). The hon. Gentleman came in late, he would not give way, he was bad-tempered, and my hon. Friend the Member for Makerfield (Mr. McCartney) had it absolutely right. Many of us were surprised when the hon. Gentleman told my hon. Friend the Member for Workington (Mr. Campbell-Savours) that he should make his own speech. My hon. Friend tried to make his own speech earlier, but the hon. Gentleman was not present.
§ Mr. Hind
The hon. Gentleman referred to me. I resent the suggestion that my speech was in any way bad-tempered. It was perfectly good-humoured. Opposition Members reacted badly, perhaps because the arguments that I marshalled against the Opposition's case were penetrating. The only reason why I did not give way to the hon. Gentleman was simply lack of time.
§ Dr. Marek
I looked and listened in vain for any argument in the hon. Gentleman's speech. However, he makes his own case, and the House can judge him.
The Minister dealt at some length with new clause 4, but not with new clause 1. In some ways, that is not surprising. I have some sympathy with what he said about new clause 4, but new clause 1 is the important clause. We have received support from the Minister's hon. Friends on the Back Benches for similar clauses, if not outright for new clause 1. The Minister said that he already takes account of environmental impact with his colleagues when Ministers prepare the Budget. If I remember correctly, he said, "We already take account of such effects."
What is wrong with the public knowing exactly how Ministers take account of those effects? If Ministers put their fingers in the air to feel which way the wind is blowing, perhaps they should keep that secret, but if they 748 take account of such effects in a meaningful and quantitative way, surely it would do the environment good if the public knew exactly how the environment and environmental considerations would be affected by the Budget statement. That is important.
The Minister asked me to answer a point and I shall do so. He asked whether the Treasury should issue crimson books or purple books for different Departments. I suspect that at the end of the day the speech made by my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) will prove accurate. Environmental considerations will be forced on to the agenda, not only of parties in the House but of public conversation and therefore of attitudes to the various parties. My hon. Friend was right. That means that we need an environmental assessment of the work of Government.
The only argument deployed by the hon. Members for Birmingham, Northfield (Mr. King) and for Lancashire, West was that we would need armies of bureaucrats to carry out environmental assessments. It need not go that far. In many ways, the work is already being done by the Government and their Departments. Because we believe in freedom of information, we need to know exactly how they do it, and what account they take of that work, so that the public can make their own assessment.
New clause 1 is a very timid measure that does not go very far, and hon. Members will be able to beef it up so that the global problems of the environment can be tackled more effectively. New clause 1 asks that the environmental effects of the Budget should be reviewed and that any effects—or anticipated effects—that it may have on, for example, land use in the United Kingdom—and there are six cases—should be assessed. If that has already been done by the Treasury, why can we not know? What is secret about that? Many statistics are already known.
§ Mr. McCartney
The Department of the Environment, for the purposes of designating local authorities for the use of derelict land grant, currently does precisely as my hon. Friend says. It designates the area of the derelict land and then stipulates the purpose to which it can be put. It is only when that assessment has taken place that the authority can develop the land and receive project grants. The Department of the Environment states that 20,000 acres of derelict land in the north-west listed in its land bank are suitable for assistance.
§ Dr. Marek
My hon. Friend is knowledgeable on these matters. He is right to say that an enormous amount of information is held by the local authorities, but it is also held by the Department of the Environment, the Scottish Office, the Welsh Office, and the Northern Ireland Office. It need not require an army of bureaucrats and administrators for such assessments to be made public.
New clause 1 will make the Government assess the pollution levels and the effect that the Budget would have on them. It requires an assessment of the rate of usage of natural resources, whether in the United Kingdom or elsewhere, and the effect that the Budget will have on that rate of usage. It also seeks to assess the rate and types of energy production in use in the United Kingdom, and the effect that the Budget will have on them.
Paragraph (e) urges and imposes upon the Government a general duty to encouragethe use of renewable sources of energy of raw materials in the United Kingdom".749 That is a subject on which I hope that there will be no dispute. It is important that the effects of the Budget are assessed in this regard.
§ New clause 1 asked for an assessment of the Budget's effects on human and animal health, whether in the United Kingdom or elsewhere. That is a sensible and moderate new clause, and not one that would impose an intolerable burden on the Government. It would inform the public and ensure that we had more information on which to base future policy. It would also enable other countries to give greater weight to our views on environmental protection, because they too would have more information on which to base their judgment. Such an assessment must be good for the environment.
New clause 4 has been criticised, but its provisions would look very well as part of any environmental assessment. The hon. Member for Northfield was wrong when he said that it is defective because people provided with pool cars would not be taxed. If the hon. Member for Northfield—although he is not listening at the present—will study the clause properly, he will see that he is wrong.
I have some sympathy with the Minister when he says that new clause 4 is unnecessary because, when catalytic converters are required for all new cars, the rate of turnover in the company car sector is such that they will all have them quickly. Nevertheless, the amendment would be an incentive to fit company cars with converters in the remaining years before they are mandatory.
The Minister was stretching a point when he said that excise tax will remain even when all cars are converted. If I heard him correctly, he said also that the proposed concession would cost about £100 million per year at some future date. It must have occurred to the Economic Secretary that new clause 4 is meant as an incentive for only a number of years, and that any tax relief given this year can be taken away in two or three years' time.
The right hon. Member for Hertfordshire, North (Mr. Stewart) gave welcome support to new clause 1. He got it slightly wrong about the Labour party being the high tax party and the Conservative party being the low tax party. Taxation as a percentage of GDP is higher now than it was when Labour left office in 1979. I forget the precise figures, but taxation is today about 3 or 4 per cent. higher—so the party that taxes the British people more is the Conservative party, not Labour. Conservative Members try to mislead the public and are not accurate with their use of words. Members of the Government and Back Benchers talk about income tax, sometimes about tax, and at other times about indirect tax.
At the end of day, one cannot get away from the fact that the lowering of income tax has been more than made up by the increase in value added tax from 8 per cent. to 15 per cent. and a large increase in the national insurance contribution.
The hon. Member for Carshalton and Wallington (Mr. Forman) largely supported new clause 1. The Liberal party also supported it—although, as usual, rather churlishly. More forthright support would have been welcome.
Important considerations include whether we look after the environment by regulation or by the judicious adjustment of tax and taxation policy. Minimum standards must be set, but the use of a taxation policy must 750 be a club in the bag. We would try to see whether value added tax could be differentiated so that, for example, non-biodegradable and non-recyclable substances would bear a higher rate than substances that were recyclable and biodegradable.
In the corporate sector, there should be additional allowances against corporation tax for companies making specific anti-pollution or conservation investment. As a straightforward example, it must be wrong that there is just one rate of vehicle excise duty of £100 for a small or big car. Changes could be made there.
We have long advocated that the price differential between leaded and unleaded petrol should be increased still further and I am pleased that the take-up of unleaded petrol is still increasing. The Government have promised that, by the end of the year, or by next year's Budget, that take-up will have increased to 40 per cent. of the market. I wish them luck, but if they do not achieve that target, I look forward to the price differential between leaded and unleaded increasing in due course.
If company cars receive a benefit in kind that is untaxed, that should be changed. Most hon. Members believe there are large classes of company cars which do not bear the correct rate of tax and which receive a great untaxed benefit in kind. I hope that the Treasury will consider addressing that in the next Budget.
I am not arguing that taxation should be increased in aid of the environment—that public debate will be held in the next two years. It is an argument of swings and roundabouts. Taxing for environmental purposes means that incentives are changed to reflect the true cost of any particular goods. Such tax changes are good for the Inland Revenue and also encourage innovations to reduce pollution. We believe that, as a first step, tax allowances should be made in particular areas to encourage conservation of the environment and improvements in the quality of life.
I thank my hon. Friends the Members for Carlisle (Mr. Martlew) and for Glanford and Scunthorpe (Mr. Morley) for their well-informed speeches, which were listened to with interest. On a slightly churlish note, it is a pity that many of the Conservative Back Benchers who were members of the Finance Committee have not been present. I hope that that will be redressed in our later debates.
here is an unanswerable case for a new clause similar to new clause 1. For that reason, I urge my hon. Friends to press our new clause to a Division.
§ Question put, That the clause be read a Second time:—
§ The House divided: Ayes 206, Noes 261.752
|Division No. 293]||[8.22 pm|
|Adams, Allen (Paisley N)||Bermingham, Gerald|
|Allen, Graham||Bidwell, Sydney|
|Anderson, Donald||Boateng, Paul|
|Archer, Rt Hon Peter||Boyes, Roland|
|Armstrong, Hilary||Bradley, Keith|
|Ashdown, Rt Hon Paddy||Bray, Dr Jeremy|
|Ashley, Rt Hon Jack||Brown, Gordon (D'mline E)|
|Ashton, Joe||Brown, Nicholas (Newcastle E)|
|Banks, Tony (Newham NW)||Brown, Ron (Edinburgh Leith)|
|Barnes, Harry (Derbyshire NE)||Buckley, George J.|
|Barnes, Mrs Rosie (Greenwich)||Caborn, Richard|
|Barren, Kevin||Callaghan, Jim|
|Beckett, Margaret||Campbell, Menzies (Fife NE)|
|Beith, A. J.||Campbell, Ron (Blyth Valley)|
|Bell, Stuart||Campbell-Savours, D. N.|
|Benn, Rt Hon Tony||Canavan, Dennis|
|Bennett, A. F. (D'nt'n & R'dish)||Carlile, Alex (Mont'g)|
|Carr, Michael||Litherland, Robert|
|Clark, Dr David (S Shields)||Lloyd, Tony (Stretford)|
|Clarke, Tom (Monklands W)||McAllion, John|
|Clay, Bob||McAvoy, Thomas|
|Clelland, David||McCartney, Ian|
|Clwyd, Mrs Ann||Macdonald, Calum A.|
|Cohen, Harry||McFall, John|
|Cook, Frank (Stockton N)||McKay, Allen (Barnsley West)|
|Cook, Robin (Livingston)||McKelvey, William|
|Corbett, Robin||McLeish, Henry|
|Cousins, Jim||Maclennan, Robert|
|Crowther, Stan||McNamara, Kevin|
|Cryer, Bob||McWilliam, John|
|Cummings, John||Madden, Max|
|Cunliffe, Lawrence||Mahon, Mrs Alice|
|Cunningham, Dr John||Marek, Dr John|
|Darling, Alistair||Marshall, David (Shettleston)|
|Davies, Rt Hon Denzil (Llanelli)||Martin, Michael J. (Springburn)|
|Davies, Ron (Caerphilly)||Martlew, Eric|
|Davis, Terry (B'ham Hodge H'I)||Maxton, John|
|Dewar, Donald||Meacher, Michael|
|Dixon, Don||Meale, Alan|
|Dobson, Frank||Michael, Alun|
|Doran, Frank||Michie, Bill (Sheffield Heeley)|
|Dunnachie, Jimmy||Michie, Mrs Ray (Arg'l & Bute)|
|Dunwoody, Hon Mrs Gwyneth||Moonie, Dr Lewis|
|Eadie, Alexander||Morgan, Rhodri|
|Eastham, Ken||Morley, Elliot|
|Evans, John (St Helens N)||Morris, Rt Hon A. (W'shawe)|
|Ewing, Harry (Falkirk E)||Morris, Rt Hon J. (Aberavon)|
|Fatchett, Derek||Mullin, Chris|
|Faulds, Andrew||Murphy, Paul|
|Fearn, Ronald||Nellist, Dave|
|Field, Frank (Birkenhead)||Oakes, Rt Hon Gordon|
|Fields, Terry (L'pool B G'n)||O'Brien, William|
|Fisher, Mark||Orme, Rt Hon Stanley|
|Flannery, Martin||Parry, Robert|
|Flynn, Paul||Patchett, Terry|
|Foot, Rt Hon Michael||Pendry, Tom|
|Foster, Derek||Pike, Peter L.|
|Foulkes, George||Powell, Ray (Ogmore)|
|Fraser, John||Prescott, John|
|Fyfe, Maria||Primarolo, Dawn|
|Galloway, George||Quin, Ms Joyce|
|Garrett, John (Norwich South)||Radice, Giles|
|George, Bruce||Randall, Stuart|
|Godman, Dr Norman A.||Redmond, Martin|
|Gordon, Mildred||Rees, Rt Hon Merlyn|
|Gould, Bryan||Reid, Dr John|
|Graham, Thomas||Richardson, Jo|
|Grant, Bernie (Tottenham)||Robertson, George|
|Griffiths, Nigel (Edinburgh S)||Robinson, Geoffrey|
|Griffiths, Win (Bridgend)||Rogers, Allan|
|Grocott, Bruce||Rooker, Jeff|
|Hardy, Peter||Ross, Ernie (Dundee W)|
|Harman, Ms Harriet||Rowlands, Ted|
|Hattersley, Rt Hon Roy||Ruddock, Joan|
|Heal, Mrs Sylvia||Sedgemore, Brian|
|Henderson, Doug||Sheerman, Barry|
|Hinchliffe, David||Sheldon, Rt Hon Robert|
|Hogg, N. (C'nauld & Kilsyth)||Shore, Rt Hon Peter|
|Home Robertson, John||Short, Clare|
|Howarth, George (Knowsley N)||Sillars, Jim|
|Howells, Geraint||Skinner, Dennis|
|Hoyle, Doug||Smith, Andrew (Oxford E)|
|Hughes, John (Coventry NE)||Smith, C. (Isl'ton & F'bury)|
|Hughes, Robert (Aberdeen N)||Smith, Rt Hon J. (Monk'ds E)|
|Hughes, Roy (Newport E)||Smith, J. P. (Vale of Glam)|
|Hughes, Simon (Southwark)||Spearing, Nigel|
|Illsley, Eric||Steinberg, Gerry|
|Janner, Greville||Stott, Roger|
|Jones, Barry (Alyn & Deeside)||Strang, Gavin|
|Jones, Ieuan (Ynys Môn)||Straw, Jack|
|Jones, Martyn (Clwyd S W)||Taylor, Mrs Ann (Dewsbury)|
|Kennedy, Charles||Taylor, Matthew (Truro)|
|Kirkwood, Archy||Thomas, Dr Dafydd Elis|
|Lambie, David||Turner, Dennis|
|Lamond, James||Wallace, James|
|Leighton, Ron||Walley, Joan|
|Lewis, Terry||Wardell, Gareth (Gower)|
|Wareing, Robert N.||Winnick, David|
|Watson, Mike (Glasgow, C)||Wise, Mrs Audrey|
|Welsh, Andrew (Angus E)||Worthington, Tony|
|Welsh, Michael (Doncaster N)||Young, David (Bolton SE)|
|Williams, Rt Hon Alan||Tellers for the Ayes:|
|Williams, Alan W. (Carm'then)||Mr. Frank Haynes and|
|Wilson, Brian||Mrs. Llin Golding.|
§ Question accordingly negatived.