Petrol Duty

HC Deb 12 March 1998 vol 308 cc737-9

5. Mr. Amess

What representations he has received on the use of petrol duty rates as a mechanism for achieving environmental objectives. [32497]

The Financial Secretary to the Treasury (Dawn Primarolo)

The Chancellor has received a number of representations which will be taken into account in reaching decisions for his Budget on 17 March.

Mr. Amess

Will the hon. Lady clarify the Government's policy on duty on fuel, as the Government seem to be giving different messages to different audiences? Is it the Government's intention to continue to increase duty on fuel to meet environmental concerns and reduce the number of people who drive cars, or are they the motorist's friend and the friend of the oil industry—although that was certainly not the case three weeks ago when I attended the annual oil industry dinner?

Dawn Primarolo

I am sure that that meeting was not in Basildon, which is only a short drive from Southend—which I understand the hon. Gentleman did at some speed.

The Government have a clear commitment to reduce CO₂ emissions, which are directly linked to fuel consumption. I remind the hon. Gentleman that it was the previous Government who introduced the escalator at 5 per cent.

Mr. Pike

My hon. Friend will recall that the changeover to lead-free petrol was greatly assisted by increasing the differential and reducing the price of that fuel. Is there not a case, on environmental grounds, for encouraging vehicles powered by liquid petroleum gas by reducing duty on that fuel?

Dawn Primarolo

As my hon. Friend will know, there is considerable discussion about clean fuels, building on the excellent record of the previous Government in favouring unleaded fuels over leaded ones. Mechanisms are already in place to assist the shift, especially to clean diesel, to deal with particulate emissions. The Government are constantly reviewing the development of clean fuels—an item that needs consideration in the interests of environmental protection.

Mr. Malcolm Bruce

Does the Financial Secretary agree that it might be more acceptable to motorists, especially those in rural areas who are suffering from the escalating increase in petrol, if there were some compensating reduction in, for example, vehicle excise duty on fuel-efficient cars, as proposed by the Liberal Democrats? Will she confirm that she promised last July that the Government would produce a Green Book to be published alongside the Red Book at the time of the Budget? Is that still the Government's intention? Will it be published with the Red Book on Budget day?

Mr. Skinner

The Liberals have a policy for emptying toilets and wiping their backsides.

Dawn Primarolo

But is it a green policy?

The hon. Gentleman asks about rural motorists. As he will know, my right hon. Friend the Deputy Prime Minister is working on the transport White Paper which will examine transport as a whole and the development of an integrated transport strategy in particular—something the previous Government did not have when, for example, they deregulated the buses and removed millions of bus routes from rural communities.

With regard to green policies in the Budget, it has been made clear in the House that the Government will include statements on their environmental policies.

Mr. Heathcoat-Amory

The Chancellor of the Exchequer has already announced his intention of increasing the duty on fuel by at least 27p per gallon in next week's Budget. Does the Minister agree that that will be the third such increase in 16 months? The Government have a policy of tax early, tax often. Does the hon. Lady agree also that this scale of increase raises the price of transport for everyone and imposes an especially heavy burden on the rural motorist, for whom a car is a necessity and not a luxury? Does the hon. Lady agree that these increases are being imposed not for environmental reasons but simply to raise more revenue? Will she and her colleagues have a rethink before next Tuesday's Budget?

Dawn Primarolo

That is rich, coming from the right hon. Gentleman, who was a member of the Government who introduced the 5 per cent. fuel escalator. Unlike the Conservative Government, the Labour Government are committed to reaching our CO₂ targets. We shall abide by the international agreement arising from Kyoto. The 5 per cent. escalator donates 2½ tonnes towards that target for the year 2010.

Mr. Geraint Davies

Is my hon. Friend aware that there are 1 million cars, vans and trucks powered by liquid petroleum gas in Italy, and only 2,000 in Britain? Will she and her colleagues continue positively to examine fiscal measures to encourage the use of more environmentally sensitive fuels?

Dawn Primarolo

I was not aware of the situation in Italy. I assure my hon. Friend that we shall continue to examine these important matters.