HL Deb 22 April 1985 vol 462 cc953-75

6.16 p.m.

Lord Nathan rose to move, That this House takes note of the report of the European Communities Committee on Lead in Petrol and Vehicle Emissions (5th Report, 1984–85, H.L. 96).

The noble Lord said: My Lords, this report deals with two directives, one concerned with lead in petrol, No. 7805/84, supplemented by 9613/84, and one concerned with vehicle emissions; that again is under 7805, supplemented by 10080/84. The latter—that is, the emissions directive—relates to both petrol and diesel vehicles of less than 3,500 kg in weight.

Notwithstanding the compromise agreement reached at the meeting of the Council of Ministers on 20th March—that is, after our report was completed but before it was published (to which I shall refer later)—the issues to be addressed remain those which we considered in our report. They represent a further step in the control of vehicle emissions, which started in 1970, by the adoption of Regulation 15 of the United Nations Economic Commission for Europe, implemented in the European Community by directives.

The United States has adopted legislation similar in type to Regulation 15 but specifies a different test drive cycle and more stringent emission limits. The Japanese have adopted similar controls to combat severe pollution in their cities. In recent years Switzerland, Sweden and Australia have adopted standards based on those of the United States. The proposals which are the subject of our report represent a further step to contol pollution from vehicle exhausts, leading to the adoption of standards similar to those applicable in the United States.

Concern about this pollution originally arose from its local effects in the form of photo-chemical smog, particularly in areas such as Los Angeles, Tokyo and the Ruhr Valley. These problems also exist to some extent in the United Kingdom, as was noted in the tenth report of the Royal Commission on Environmental Pollution, where its effects are also illustrated by photographs. We received evidence that the development of photo-chemical smog could be forecast as it occurs in certain climatic conditions; and in the Ruhr Valley, when these conditions are imminent, warnings are given requiring cars to stay home. As we mentioned in our report on air pollution, there is substantial though not conclusive evidence that ozone (O3) contributes to the formation of acid deposition. Ozone in high concentrations is usually the result of exhaust emissions of motor vehicles. Thus pollution and the pollution effects of vehicle emissions are matters of importance.

The lead directive largely arises from firm initiatives taken by the Government following acceptance of the recommendations of the ninth report of the Royal Commission in which it was recommended that by 1990 at the latest new cars should be required to run on lead-free petrol. There is little I wish to say about the lead directive, not least because a directive was made by the Council of Ministers on 20th March this year—No. 85/210/EEC. I have just received a copy of that directive and I have had no proper opportunity of considering its terms. However, at first glance it seems to me there is a difference between that and the lead directive which was under consideration by us, For our consideration we had before us a directive which prescribed that vehicles of new types (which is a technical term) registered after 1989 would be required to run on lead-free petrol, and that all cars registered after 1991 would be required to run on lead-free petrol. As I understand the council directive, which has just come before me, there is no such provision; merely provision that lead-free petrol shall be available in all countries of the Community from 1989. This is a matter that may require consideration in conjunction with the emissions directive where the way perhaps is still open.

The use of lead-free petrol is an essential prerequisite to the introduction of emission controls according to existing technology. This is because lead in petrol makes the catalysts, which are an essential element in emission controls, useless. Catalysts are required not only where three-way catalytic converters are fitted but also in the case of lean burn engines to which an oxidation catalyst must be fitted to control emissions of hydrocarbons.

With regard to emission controls, the directive proposes that these be introduced in two stages. The second stage, which would result in emission controls roughly equal to the standards required in the United States, are to be introduced in 1995. The first stage, involving less stringent standards, is to be introduced for new types of vehicle—"new type" is a technical term—in 1989 and for all registrations from 1991. The Stage II standard, that is the United States standard, has been applied in the United States and Japan for some 10 years past, and has been, or is being adopted, by Australia, Switzerland, and Sweden. The means of achieving these standards are well known and involve the use of catalytic converters. It is tried and tested technology.

The first question that the Committee had to consider was why it was proposed that there should be a less stringent Stage I standard, with introduction of the Stage II standard being deferred until 1995. It appeared to us that the reason for this proposal was to encourage the manufacture of lean-burn engines which are likely to be able to achieve Stage I standards. There is, however, no evidence that lean-burn will, by 1995, be capable of achieving Stage II standards. We were therefore concerned that the motor industry would gear itself up to producing lean-burn engines which would be costly and to which their manufacturing facilities would be devoted. If, therefore, it turned out that lean-burn engines were incapable of meeting the Stage II standards by 1995, the industry would naturally apply the greatest pressure to modify the Stage II standards to enable them to comply with whatever standards were adopted. We therefore foresaw the possibility that Stage II standards, that is, the United States standards, might not be achieved, at any rate by the time envisaged.

Since the objective of the directive is to establish the lowest practicable and economic emission levels at an early date, we did not believe that the introduction of the Stage I standards would be helpful. Rather, we considered that it would be better to defer until 1991 from 1989 the introduction of emission controls and that when they are introduced in 1991 they should be in respect of all new registrations of vehicles and that the Stage II standards, the United States standards, should apply. We recognised that this might well mean that the catalytic converter route would have to be followed on the basis that the lean-burn engine might be incapable of achieving Stage II standards by that date.

Questions have been raised with regard to the additional cost arising from the use of catalytic converters. These costs represent, first, the cost of the catalytic converters; secondly, the control mechanisms for the engine, primarily mixture controls; and, thirdly, installation costs, different exhaust types and floor pan shapes. The cost of the catalytic converters themselves is said to be around £50 per car. The rest of the system, it is suggested, might add an additional £500 per car. However, some of this cost will be once only at the start of production. This system cost which stems from the European quality car export models in limited production is likely to decline with volume production in the family car ranges. It will still, of course, result in an additional cost. If, however, these costs are compared with the additional costs of lean-burn over a normal engine, we arrived at a very similar figure. This is because the lean-burn engine requires at least equally sophisticated control mechanisms to maintain good driveability and an oxidation catalyst is required.

The directive is, of course, concerned with controlling vehicle emissions and certain limits are prescribed both for Stage I and for Stage II. There is, however, currently, as we found, no method of measuring the actual emissions of vehicles in use. For this reason, test cycles are established that should be designed to reflect in the laboratory use to which a car on the road would actually be put. Therefore, the actual emissions of vehicles in use are a projection of the result of such tests, the crucial element of which is the validity of the test cycle. The United States test cycle has been developed over several years and appears reasonably to reflect the actual use of a car kept in the surburb of a city and includes an element of acceleration, high speed on motorways, traffic congestion in cities, and so forth.

The present test cycle under the United Nations Economic Commission for Europe, Regulation 15, however, appears to us to have little relationship to the use of a car in service in that there is no adequate provision relating to acceleration, which is in Europe generally much more severe than in the United States, nor to high speed motoring, to which the same applies. On the contrary, it has been said that the European test cycle reflects a car going down the Champs Elysées at an average speed of 11 miles per hour. The validity of a test cycle is therefore a crucial element to ensure that the emission standards desired are likely actually to be achieved. Much work requires to be done in Europe to develop an appropriate test cycle unless, indeed, the United States test cycle, with any appropriate modifications for European conditions, were to be adopted. Such modifications might include the addition of an element of motorway cruising at 70 miles an hour, since the United States test cycle stops at 57 miles an hour. This is, indeed, the course that we recommend in our report as being appropriate in the context of adoption of the Stage II, United States, emission standards.

While it is known that the catalytic converter system will achieve Stage II standards in accordance with the United States test cycle, it is vital for the industry, particularly if it adopts the lean-burn route, to know at the earliest date what test cycle is to be adopted in order to ascertain whether it can achieve the required limits in accordance with it. The Brussels Commission, in the Vehicle Emissions Directive, expressly refrains from prescribing the means, whether by catalytic converter, lean-burn or otherwise, by which the prescribed emission standards shall be achieved. The Committee does so, too.

Following completion of our report and just before its publication, there was a meeting of the Council of Ministers on 20th March last at which the Council agreed in particular the framework for a new directive relating to emission controls to be substituted for the one which is the subject of our report.

According to the Minister in a written reply in another place (House of Commons, Official Report, 25th March, 1985, Written Answers, col. 5) it appears that it is intended that catalytic converters would be required for vehicles over 2,000 cc—that is, two litres—while vehicles of between 1,400 and 2,000 cc would have engines based on "simple lean-burn technology", combined with oxidation catalysts (not three-way catalysts) or comparable cost-effective technology; and present limits for small cars (below 1,400 cc will be tightened from 1990 as an interim stage before further emission reductions to be agreed in 1987. The agreement by the Council of Ministers means that the existing proposed directive considered in our report will be referred back to the Commission, who are required to produce a fresh directive by June of this year.

It is clear that this new agreement starts from the proposition that different technical criteria shall apply to engines of different cubic capacities. There is no indication of what emission standards are to be achieved by any of these classes of engine, including engines of "simple lean-burn type". It appears to undermine the main purpose of the original proposed directive, which was to reduce emissions to specified limits by specified dates and thus to remove the thrust of the proposed measures from environmental concern to concern about the development of the motor industry.

We shall no doubt be studying that new directive when it is available. We shall consider particularly what emission standards are proposed; the legality of the arrangement will also require consideration and no doubt will its effect on imports and exports to and from the Community.

We have noted in our report that departmental responsibility in this country in relation to the proposed Emission Control Directive was vested in the Department of Transport, whereas the Lead Directive was in the hands of the Department of the Environment. For the reasons stated in our report we regard the further control of vehicle emissions as important, and the apparent change of direction brought about at the Council meeting on 20th March gives cause for concern.

There is a further point to which I draw your Lordships' attention. The Federal Republic of Germany had proposed some time ago to introduce financial incentives to encourage the purchase in Germany of vehicles meeting the equivalent of the United States' emission standards prior to the dates specified in the original draft directive. We expressed in our report our concern that such financial incentives could affect the internal market of the Community.

In the written reply to which I have referred the Minister states that, individual member states—such as the Federal Republic of Germany—with serious environmental problems will be able to start a limited incentive scheme from July this year to encourage the voluntary purchase of cars meeting the new limits". It seems that the same result will ensue from this agreement as that about which we expressed concern.

In conclusion, we consider that the directives under review in our report represent a desirable step forward in pollution control, and our criticisms and recommendations are limited to points of detail in an approach which we consider to be fundamentally sound. They lead to the introduction into the Community of emission standards equivalent to those applicable in the United States.

There are certain questions arising out of the agreement of 20th March which I think it reasonable to put to the noble Lord the Minister for his consideration and, I hope, his answer. They are as follows. First, with regard to the intermediate size of engine (that is, between 1,400 and 2,000 cc) are the Government satisfied that engines based on "simple lean-burn technology", to use their own words, will be available at a price, and with a performance, acceptable to the public? Secondly, what is the Government's assessment of the effect of the agreement on imports of cars of this category into the Community and the prospects of exports from the Community? Thirdly, what is the Government's assessment of the reductions in pollution from the proposed controls over emissions in respect of all three categories of engine size? My Lords, I beg to move.

Moved, That this House takes note of the Report of the European Communities Committee on Lead in Petrol and Vehicle Emissions (5th Report, 1984–85, H.L. 96).—(Lord Nathan.).

6.36 p.m.

Lord Strathcarron

My Lords, I am grateful to the noble Lord, Lord Nathan, for initiating this debate on what is a complex subject on which many points have still to be decided. While fully appreciating the need to reduce harmful emissions I feel that the damage caused should be put in proper perspective. Last month the Bureau Permanent International des Constructeurs d'Automobiles held a meeting in Paris and issued a full report on their findings. I shall not read from it, but their conclusion was that motor vehicles are only responsible for about 6 per cent. of acid rain.

However, feelings on the Continent run high, particularly in Germany and Sweden. I was at the Geneva Motor Show last month and was in conversation with some German environmentalists who were absolutely convinced that we in Britain were destroying their forests. I pointed out that more harmful deposits come from factories and power stations than from motor car exhausts, and that we in this country have a good record in controlling factory pollution.

Vehicle exhaust emissions have been the subject of increasingly severe legislation in Europe since the 1970s, but manufacturers have been able to meet the tougher standards as technology has advanced. The effect on vehicle prices has been small and has been more than compensated for by better economy.

Research has narrowed the problem of exhaust emissions down to three main constituents. There is carbon monoxide, which even in diluted form is poisonous; there are unburnt hydrocarbons, which strong sunlight can turn into atmospheric smog, in conjunction with oxides of nitrogen, which can also contribute to what is known as acid rain.

The problems of emissions have been seen as more pressing in some countries than in others due to local traffic and weather conditions: hence, the regulations in the United States of America and Japan—and Los Angeles and Tokyo were particularly bad in this respect—have been much stricter and necessitated the fitting of catalytic converters and complex engine control systems.

In Europe, regulations have been introduced stage by stage and have been met by progressive technological innovation. The effects have been such that new petrol driven cars are now emitting some 70 per cent. less carbon monoxide and 50 per cent. less hydrocarbons and oxides of nitrogen than pre-1970 cars. It was originally proposed by the European Commission that further reductions should be applied in two stages, 1989–91, and 1995, but pressure from West Germany forced a general review of the situation in March of this year.

The German government was under heavy political pressure from the Green parties to apply more stringent emission controls much more quickly. This was largely due to the theory—still not substantiated—that damage to forests was being caused mostly by car exhausts. In effect, Germany wanted the emissions programme accelerated under the threat that they would "go it alone" if other member states did not fall into line.

The levels proposed by West Germany were such that they could only be met by fitting three-way catalytic converters. It was the contention of most other European Community member states that to adopt this solution as the only way was not satisfactory, being expensive, wasteful of fuel and of doubtful efficiency over the total life of the vehicle. Led by Britain, they maintained that levels set should be slightly less stringent and achievable by the so-called "lean-burn" engines, which were already well advanced and thus provided an alternative technical solution. Several examples of these engines are already in production.

On costs, a three-way catalytic converter could add up to £500 more to the cost of a car, whereas simple lean-burn engines would cost only about £75 to £150. Looking ahead to 1990 the total amount paid by British new car purchasers would rise by about £1,000 million should catalytic converters become compulsory on all new cars. They would also increase petrol consumption by about 5 to 10 per cent., which would mean an additional consumption of up to 500 million gallons or up to £1 billion on annual fuel costs at today's petrol prices.

When lead-free petrol is finally introduced in Europe large supplies of the leaded fuel will still have to be available for the enormous number of cars which are on the road already. In America, after many years of using unleaded petrol, three qualities are still in general use. These are low octane unleaded petrol, high octane unleaded petrol, which is considerably more expensive, and the old type of leaded petrol.

On 20th and 21st March the EEC Environmental Council reached agreement on future car emission standards for the European Community. Larger cars, that is over 2 litres, would have catalytic converters on new models by 1st October 1988. These would have to run on unleaded fuel which would have to be available by that date in all European countries. For medium cars of 1400 cc to 2000 cc lean-burn engines would be acceptable as a compromise after 1st October 1991 and Stage I for the smallest cars up to 1400 cc. The second stage for this category will be agreed by January 1987.

United Kingdom acceptance is conditional on limits proving acceptable. Denmark and Greece have minor reservations; France, Germany and Italy have accepted the proposals.

Tax incentives to encourage the use of catalytic converters may not start before 1st July 1985. However incentives given will have to be less than the costs involved in equipping a car to meet the new European standards. In Germany catalytic converters are available as an after-market sales item for cars that are already running. By the end of 1985, the Commission will advance further proposals about emissions from vehicles over 3.5 tons, diesel engines and possible speed limits in countries where these do not apply, such as Germany. The motor industry has done well in steadily reducing harmful emissions in the last 15 years. Let us hope that, before the new regulations become compulsory, the motor industry will be ingenious enough to come up with a satisfactory alternative solution to the catalytic converter and the tremendous cost involved, which will ultimately have to be borne by the British motoring public.

6.45 p.m.

The Earl of Shannon

My Lords, I wish to speak most strongly in support of the points which have already been made most admirably by the noble Lord, Lord Nathan. In considering the draft directives, the sub-committee, of which I had the privilege of being a member, was faced with deliberating on a three-fold problem. I apologise for repeating some of these points, but they are essential to the argument.

The first problem was lead. That is easily overcome; one merely removes it. Secondly, the other combustion products, as the noble Lord, Lord Strathcarron, has told us—carbon monoxide, oxides of nitrogen and unburnt hydrocarbons—are difficult to remove totally unless the engine is turned off. Thirdly, there are the economic implications of any regulations that might be made.

Let us consider for a moment the magnitude of the problem. The evidence submitted to the sub-committee varied widely. Having had slight experience of this before, I noticed that it is in common with the evidence submitted on many environmental problems and they are not easy of definition. The effects of lead particularly are difficult to quantify. Clearly there is a risk although experts seem to disagree on the amount of lead which does damage to the human system. The effect of the other pollutants is extremely difficult to quantify. But, above all, one must try to keep in perspective how much comes from each particular source compared with other sources. One does not wish to become hysterical and insist on restrictions way beyond what is normally practicable. We do not wish to be seen to be straining after a gnat, if this is not a major source. The committee was quite right to point out in its report that it considered that the probable risks should be avoided and that it would be prudent to take further regulatory action.

To take the pollutants individually, starting with lead, it might be advantageous to consider the history of how it got there in the first place in order to enable one to appreciate the implications of its removal. Before the war, unless the motor fuel was particularly well and carefully refined, using it in a motor car engine could lead to what was known as pre-ignition, pinking or knocking. The fuel companies adopted various additives, including such things as alcohol, to overcome this. The compression ratio of engines in those days was about 6:1 and sometimes as high as 7:1. However, the efficiency of an internal combustion engine is directly related to its compression ratio; that is how much one can squeeze the charge before it is fired. The higher the compression ratio, the more it can be squeezed and the more efficient will be the engine. But if the fuel is not good enough to take squeezing, the result will be pre-ignition and this knocking.

Since the 1940s, it has been discovered that lead compounds raise what is called the octane level of fuel considerably and enable higher compression ratios to be used, and therefore more efficient engines. I seem to remember in my days when I ran a petrol point for the Army during the war, that the bulk of the petrol in those days was round about 70 octane. We had some special 80 octane for armoured cars and tanks. Now we enjoy octane ratings in the very high 90s, and the compression ratios of engines today are round about 10:1 and, sometimes, 14:1, making these engines much more efficient compared to their predecessors.

However, engine design nowadays has advanced considerably since those days so that we would not necessarily be dropping back to our pre-war efficiency; but the extra refining that would be needed to raise the octane level of this unleaded fuel could bring in its wake an increase in the benzine content which itself is another harmful pollutant. It looks now as though we shall have to accept a marginally lower performance from our engines with unleaded fuel; but, on balance, there is no doubt that it will be worth it. I agree with the committee's view that unleaded petrol should be made available at the earliest reasonable period before 1989 when it becomes compulsory and also that all newly-registered vehicles after that date should run or he able to run on unleaded fuels. I disagree that it should only be new models being type-approved that should meet this requirement.

It may be (although I think that it is probably unlikely) that, in view of the very intensive research which has been carried out by the oil companies, another "lead" will be discovered as a suitable antiknock agent. But if this new wonder product is discovered, then, before it is used, I think that it should be subject to the most stringent checks on any possible effects—which of course was not done with lead—so that we do not bequeath to succeeding generations the difficulties in which we now find ourselves.

Leaving lead aside for a moment, may we look to the other combustion products. These are not so simple and cannot be removed just like that. Here, as your Lordships have heard, the committee received evidence on two main methods of reduction for these pollutants. The first of these, was the lean-burn engine or simple lean-burn technology. I think it is simple. Basically, for those who do not already know, it means running an engine on a selectively lean mixture at certain speeds and loadings. It is effective at reducing pollutants within its own limitations of speed and load. It requires a re-design of the combustion chamber of the engine to achieve turbulence more effectively to create the full combustion of a weak mixture and avoid the flame-out that can happen if, for instance, on a cold morning the choke is let in too early and the engine is liable to splutter and stop. When the engine is at its normal operating temperature it will run quite well on that mixture. It also requires accurate metering of the fuel and air consumed. Obviously, it provides very good fuel economy but only when well adjusted.

However, the whole system falls down completely when you wish to get the maximum power out of your engine for acceleration, perhaps in an emergency, when the whole system requires that you revert to the normal mixture with the normal pollutants on those occasions. Lean burn will no doubt reduce emissions overall; but I suggest that it will do little in the place where it is most required: that is, in the urban drive cycle where one is continuously accelerating and braking. I am therefore driven to the view that in spite of the strong support of the motor industry and their issued briefs, lean burn is only a partial preventive. Unless there is a quantum leap in lean-burn technology, which is at present only trying to run your engine as well as possible on too weak a mixture, the motor industry could well find themselves going up a technological blind alley. If they feel that they can just scrape by now, any later tightening up of the emission standards will put this course right out of court, even with an oxidation catalyst.

From the evidence produced to the committee, I am of the opinion that the most promising and probably the only really effective course to follow is that of the three-way catalytic converter. This is in spite of its cost which I think has been somewhat overrated on subjective evidence because much of the ancillary equipment cannot be too different from that required for the lean-burn engine, anyway. However, this course requires that urgent steps should be taken to define an appropriate European drive cycle, so that we do not just blindly adopt the American drive cycle with possibly one or two small adjustments. We must also have regular tests to ensure that emission standards are being properly adhered to. If this is to form part of an expanded Ministry of Transport test, then it may be of great interest to note from evidence produced to the committee that the Japanese already include emission monitoring in their annual tests—the charge for which is well below the current charge for a similar test without emission monitoring in this country. Therefore, there can be no justification for increasing the charge in this country should emission monitoring be introduced.

Furthermore, as even the smallest use of unleaded fuel will poison a catalytic converter, the strictest precautions must be introduced to ensure that leaded fuel is not used, even inadvertently, in cars so equipped. Unleaded fuel must be cheaper than leaded. No doubt fiscal arrangements can be made to ensure this for the desirable fuel so that we do not end up with the trouble that the Americans got into when they made unleaded fuel more expensive than leaded fuel, with the result that everybody was quite happily poisoning their converters and not worrying about it.

To turn to the economic effect in the European Community, the respective motor industries are nationally very important both economically and as employers of the national work forces. Harmonisation of standards is therefore essential from the point of view of a European market. And that market should be harmonised with the other world markets which are increasingly adopting standards similar to the Stage H proposals of the European Commission. There is no use in having a home European market requiring a different product from the other world export markets. I therefore agree with the Committee in their recommendation that the earliest possible decision should be made to adopt the Stage II proposals and not have any misleading Stage I interim standards. Industry must have the maximum time to prepare and to make their decision whether to adopt the three-way catalyst or to achieve the great leap required in lean- burn technology, which, for my part, I very much doubt can be done.

7 p.m.

Lord Nugent of Guildford

My Lords, I have listened, fascinated, to the noble Earl, Lord Shannon, giving his technical explanation of the very complex situation which we had revealed to us in evidence with, I should record, the maximum assistance from the very able technical advisor and the extra technical advisor for the occasion.

I should like to begin by congratulating my noble friend Lord Nathan on his lucid exposition of this very complex affair and also to thank him for his leadership of our committee. It is a major undertaking, because it means that he really has to understand all the arguments whereas we can just listen and take them in gradually, according to how we feel. However, he has led us most admirably in a very difficult field and I believe we have produced a useful report, although in the event it seems to have been turned on its head by the Minister.

I was convinced, as was the noble Earl, Lord Shannon, that what we were recommending was the right course and I certainly do not intend to go over the technical arguments which the noble Earl has so brilliantly exposed as to why we thought it was desirable to go straight to Stage II so that we could give industry the maximum time to adapt its techniques to meet this requirement. Also, although the lean-burn technology certainly appeals strongly to me as being a preventive rather than a cure, which is attractive in itself, and is also a major economiser of fuel, it is evident that the technology of the lean burn is very far from fully developed and adequate yet and indeed it needs the oxidation catalyst for the smaller engines and the platinum catalyst for the larger ones. It is not certain—and I was very interested to hear it so convincingly said that it is not certain—that they will find a solution, although the motor industry is of course very convincing.

I certainly took the point, which has been so convincingly made, that a large part of the market for the world—the USA, Japan, Sweden, Switzerland and Australia—has already gone to the Stage II standard. Therefore it does not seem to be very good sense, in market terms, to set that off for another 10 years, and I thought there were strong market considerations as well as environmental ones. It was against that background that I went along with the burden of the report that we should recommend that Stage II standards should be reached by 1991 in one stage rather than in two, although that would create difficulties for the lean-burn techique, and catalysts would be required as well.

Turning to what has happened since, there was the Minister's statement (of which the noble Lord, Lord Nathan, reminded us) in the Commons on 25th March on the decision by the Council of Environment Ministers meeting in Brussels on 20th March. They really have decided to take a completely different approach. Their decision in effect says that the pace of progress is to be dicated by the mechanical and engineering technology available rather than by the environmental requirements of improving the emissions which the original proposal from the Commission had put before us.

Of course, one understands that the three-way catalyst is a good deal more expensive than the lean-burn technique, but, in terms of aiming for an improvement in standards of emission and a reduction in pollution of the atmosphere, it must be regrettable that this decision has been made, and all the more so in the light of the bargain that was made with the Germans to allow this financial tax incentive, which is clearly a regrettable distortion of trade.

I suppose one can see that, while conserving the atmosphere has perhaps not received the emphasis that it should, there is some consolation in the ministerial decision in terms of resources of finance and engineering. I would hope that when the Commission come up with their redraft, which they have been asked to give by, I think, June, they will produce a new set of proposals which will be rather more convincing than the sort of compromise we have in front of us now, and that they will give a clear lead as regards the improvement in the environment and the reduction of pollution which we all wish to see, in the stage which is to come after this rather "compromise" arrangement.

There are three short points that I should like to make. I think it is important to put on the record the point made by the noble Earl, Lord Shannon, that the injury to health from lead, although one thinks that there probably is a case, is not proven. However, I go along with the general policy of avoiding further pollution of the atmosphere wherever possible. Coming back to the three-way catalyst, we were assured that supplies of platinum are adequate, so one of the anxieties that had been put before us was removed.

I entirely go along with the necessity to have an improved drive-cycle for Europe. Whether it should be the American drive-cycle, which seems to me to be considerably better than the European, I would not be sure. But of course I do take the point that the European pattern of driving is different from the American one, and of course the drive-cycle is a crucial factor in this picture. We must try to get it right. But, again, when these new standards are established it is evident that there will need to be annual monitoring of the condition of catalysts in order to keep them in good condition.

I conclude by again thanking the noble Lord, Lord Nathan, for his admirable leadership and would say that, although our recommendations are not immediately to be accepted, I feel certain that they will be valuable and influential for the future.

7.8 p.m.

Lord Energlyn

My Lords, the noble Lord, Lord Nathan, has led a brilliant investigation into this very controversial and complex subject. I should like to congratulate him and his committee on producing a brilliant report, which in fact goes beyond a report really. It will become a kind of textbook, to which people such as myself will refer for important and ongoing information. It also seems as though I am to be in the honourable position of having a running duet with the noble Lord, Lord Nugent, as we are going to move very smoothly from hydrocarbons now to water in a moment. Certainly I agree with his masterly summing up and with the cautionary words at the end of his speech; I agree with him entirely.

On this business of lead poisoning it is so easy to advocate how virile a poison it is, but it is extremely difficult to know how it behaves. So I think that one should introduce elements of caution in analysing medical statistics which concern things such as lead in the atmosphere.

I should like to take the report as a textbook, because it raises some very fascinating conclusions. For example, I would commend to your Lordships the part of the evidence given by Johnson Matthey on catalysts. You have there a remarkable exposition of how catalysts work, and do not forget, my Lords, that we do not know precisely how a catalyst works, although we know how it behaves. So the behaviour of catalysts is brilliantly explained in the evidence given by Johnson Matthey. To someone such as myself what it says is that at long last we now appreciate the importance of catalysis in the internal combustion engine, so that it brings into prominence some of the adventurous things that are destined to be done in the future.

For example, if round about 1920 Diesel had known about catalysis, he might well have succeeded in maintaining coal as the fuel for the first diesel engine. If he had known that he could have had a triple catalytic event, he would have solved most of his problems, because the trouble with the original diesel engine was that the coal combusted beautifully by compression, as was explained so brilliantly by my noble friend, Lord Shannon, as it does in a coalmine explosion—but the coal contained inert inorganic matter, which simply wore out the bearings of the engine. That is why he turned to an oil and that is how diesel oil was born.

As the noble Earl knows, he and I have been involved in experiments connected with mixing oil and water. If we could find the right catalyst for oil and water, we should get an entirely different internal combustion engine and, moreover, a source of fuel that is quite different from anything that we are using at the present time. So this report could well give encouragement to people who are thinking into the future and the future of engines. For example, the toroidal engine might come into its own, because of the findings of this report. So I really congratulate the noble Lord, Lord Nathan, and his Committee, and I also commend this report to all the experts in this country who are concerned with fuel and fuel technology.

7.12 p.m.

Lord Rugby

My Lords, I cannot claim any very great knowledge of chemistry and my recent introduction to the Committee has brought me face to face with a new chemical terminology, with mnemonics, with which many people are familiar but which were unfamiliar to me, and with quite a considerable degree of technical jargon. Therefore, to begin with I have had to adjust myself to this unfamiliar language, in order that I could start thinking in the wider context of the European and the global problem of lead pollution and the gas emissions with which it is concerned.

It is more as a farmer perhaps that my awareness of environmental changes has made its main impact, because over the last 30 or 40 years the evidence of change is enormous and the change in our environment has probably been manifesting itself very largely because of the gas emissions which cars give out and which are now in need of positive and decisive legislation. Failure to act now must surely lead a serious indictment onto those whose task it is to safeguard the future of the environment for our children and our children's children.

The difficulties of obtaining concerted action are immense, when one is dealing across the borders with national chauvinistic attitudes, with the large consortiums which are able to exert considerable commercial pressure and with all the conflicting opinions. Neverthless, the orders must come down from the bridge of the ship in response to a chorus of alarm from below decks. To disregard those voices would be a failure to realise icebergs lie in our path and instead of our changing course, which apparently we are not prepared to do, according to the most recent Directive, we are just carrying on as before. It strikes me as being the typical Titanic action of the captain saying, "Carry on on and disregard any alarm bells from below." It is a dangerous situation. An instance could be seen on our screens last night at the national racing grand prix. In one fell swoop, it demonstrated hideous noise pollution and souped-up engines delivering both lead and toxic pollutants into the atmosphere on a grand scale. And to what purpose?—speed for speed's sake.

The motor industry will move only if and when it is given a stringent deadline to which to work, such as has been done in other countries, notably Japan. Our motor industry is an innovative industry and such challenges are well within its capability. The Japanese motor industry is already geared to a 90-octane fuel level without any lead input in all but 1 per cent. of its vehicles, and that 1 per cent. is purely and simply for imported vehicles. If they can do it, so can we. The petroleum industry will, by definition, be bound to object on economic grounds. But it is they, and they alone, who must come up with a new fuel. Inevitably, there will be competition from alternative and less toxic energy sources and the challenge is one of overwhelming responsibility to the community at large.

Having begun my association with this Committee with an uncommitted mind, I find myself responding to the sheer weight of facts in a positive way and the facts are here lucidly marshalled in this 5th report. Although I was unable to be present at one meeting, I have read the submission by Mr. Russell Jones on behalf of the Campaign for Lead-free Air, and I should like to quote what he said. He referred to the speech by Lord Asquith, who once said that the motor car is a luxury that is apt to degenerate into a nuisance. My view is that the motor car is a necessity that is rapidly turning into a menace from both the health, and the environmental point of view". He went on to say: To put that into perspective, the percentage of trees showing damage in West Germany has gone up from 8 per cent. in 1982 to 50 per cent. in 1984. It seems to me that the scale and speed of that change is quite appalling. I think that any solution that does not propose to do anything about that until 1995 is inappropriate, to say the least". I should like to thank the noble Lord, Lord Nathan. He steered us through these Committee meetings in a most admirable way and he had to do it under the very great duress of having a major operation on his eyes, which is a quite remarkable achievement. Also, his deposition today was most splendidly given. It was very heartbreaking to have been told at the last moment that practically all of his deliberations have been overturned by a more recent edict from the EEC. It appears now that the motto for the EEC is festina lente; in other words, Go slow. Unfortunately, this is a compromise and I do not know whether it is acceptable. But my own belief is that the report which has been produced by the Committee is a most excellent one and apart from the timing, which we have now been told to accept—and I think that we must accept it very reluctantly—I must agree with everything that is stated in the report, and I commend it.

7.19 p.m.

Lord Carmichael of Kelvingrove

My Lords, I think everyone will pay tribute to the noble Lord, Lord Nathan, for initiating this debate this evening. It is interesting that the debate is being handled by the Ministry of Transport although at least four Ministries are involved in the issue. I am sure that, like me, the noble Lord will have looked at this report with great care and will realise that it is not the normal run we have in transport when we discuss congestion in towns, accident rates or matters requiring less expert and less detailed knowledge.

I think that from the speeches we have heard and from the report itself it is clear that an amazing job was done by members of the committee in simplifying as much as they were able the very many points and the highly technical difficulties that arise when petrol, leaded or unleaded, is burned in an internal combustion engine. There is no doubt that the internal combustion engine has been a real boon to mankind in many ways, but it has also caused a great many problems.

Noble Lords who have read the report of the Select Committee will be well aware that it is highly technical We are very grateful for the work that has been done. Many organisations have written in, some perhaps in response to the report and some perhaps because they did not feel that they had put their message across properly in the evidence they gave to the committee; or perhaps because they had had second thoughts on it, or because they are extremely involved in the motor car industry. These organisations have a part to play as well in helping us to try to make up our minds. I agree of course that the Society of Motor Manufacturers and Traders, the various motor companies, the various motoring organisations and the chemical companies all write from their own point of view and try to stress in various ways their interest in the timing and the implementation of these controls. That is as it should be. All the groups which have written have a very material interest in the internal combustion engine and most of them have great experience.

The Select Committee report deals with a great many of their points. The conclusions of the report appear to dismiss those points, though not lightly; but a decision had to be made and the Select Committee made a decision contrary to most of the feelings in the motor industry and in motoring circles. That was how I read the report. An answer in paragraph 36 on page 16 was to me the crux of the way I read the rest of the report. Towards the end of that answer, this statement is made: To go for the 3-way catalyst system would be to adopt technology which is probably on the way out anyhow and would be extremely expensive to introduce in Europe, for what might be only a temporary stage". It goes on to say: It simply impedes a number of developments in engine technology which everyone wants to see for other reasons, mainly in terms of energy conservation". I have been on many committees with the noble Lord, Lord Nugent; I think that actually he was the chairman of one of the committees of which I was a member. When you produce a report after sitting for hours and it is handed down to people who have not been sitting on the committee as long, there is always a slight feeling of being let down when they take the opposite point of view. But one of the reasons the report is produced is to explain to people the wide-ranging possibilities. Then when you throw it into a wider circle of Members of Parliament and Members of this House they put their own interpretation on it, and that interpretation is just as valid from their point of view.

Many of the points that have so far been made have been about the timing of the different stages. Perhaps the Minister can tell us whether there is a possibility of improving the timing that has been suggested. After the marathon meeting in Brussels on 20th March the Minister for the Environment—not, incidentally, the Minister for Transport—in reply to a Written Question in another place said: Each category of vehicle will have standards appropriate to that category. In industrial terms this means that expensive three-way catalytic converter technology may now be required only for large vehicles over 2,000 cc".—[Official Report, Commons, 25/3/85; col. 5.] Is the Minister uncertain whether the smaller vehicles will need converters as well, which would push the whole question back even further, or is he confident that in the immediate future only the larger vehicles will need the converters?

We are reaching out to the comparative layman. We are really at the point of saying that we want emissions controlled, that we want them controlled as fast as possible, and the question is whether the lean-burn engine or the converter is the best way. I tend to lean towards the converter at this stage where there is promise. From some of the material I have received there seems to be a great deal of promise of highly efficient lean-burn engines ready to come on to the market. I understand that Ford already have a number of engines on the market. Some British Leyland cars are fitted with lean-burn engines. It is the first stage, I agree, but Ford expect that by the end of the year they will have a more efficient engine. The second stage of the lean-burn engine will be on the market at the end of the year. Toyota are also at an advanced stage in lean burn in Japan. Full lean burn later this decade should come from Ford of Europe.

On the question of costs, I accept the fact that we have perhaps been given by the commercial companies the best dressed presentation that is possible, but it appears that the lean-burn engine is much cheaper than using the catalyst system. It is cheaper to operate and there are no additional costs. Fuel consumption should be slightly better. The catalyst system, on the other hand, shows a deterioration of anything up to 10 per cent.

I agree that I do not have the knowledge and information on performance which was given by one noble Lord. This may alter things entirely. That perhaps is one of the points that may have come out more clearly in general discussions in the committee—that the systems which are being spoken about, the lean burn, will not give the same performance. I would argue that many of our engines probably have a performance far beyond what we really need for the conditions that exist in Britain. There are production cars now capable of being driven at well over 100 miles per hour, and one wonders just how many drivers are able to handle a car that can be driven at that speed. But it is a matter of choice.

I wonder not about the Minister's reply tonight but about the considered reply of the combined Ministries to the report, which I believe has not yet been officially published. It is normal for departments to reply to a report. We shall certainly look forward to hearing the considered reply of the four Ministries concerned—those covering transport, the environment, energy and industry. I suggest that both British and European manufacturers would not wish to tool up unnecessarily. I can quote from an article in the New Scientist recently, which dealt most succinctly with this subject: Manufacturers do not want to have to tool up production lines to fit catalytic converters when they may soon be able to reduce emission with a new design of engine, combined with a leaner mix of fuel and air". I realise that the information I have is probably very lean (if I may use that word) compared with that available to the members of the sub-committee, but still it seems to suggest that we would be better off not to let ourselves, if I may quote from The Times of 22nd March: be shamed into adopting flawed and expensive solutions against our better judgment, when far more satisfactory ones may well be found just round the corner, either with motor exhausts or because the article was dealing with the whole question of pollution— with power station fumes". New limits have been set and the public are now unwilling to accept the old pollution limits. If political pressure continues the industry will surely gear itself to meet the problem. To me, the idea of going for a lean-burn engine is much more practical, despite the great work of the sub-committee, than going up what I consider to be the cul-de-sac represented by the three-way catalytic converter.

7.32 p.m.

Lord Brabazon of Tara

My Lords, I too should like to thank the noble Lord, Lord Nathan, for initiating what has been a most interesting and important debate on a very topical subject. I am grateful also to the members of Sub-Committee G of the Select Committee on the European Communities for all their work. The report assembles a great deal of up-to-date information from experts in the field of lead in petrol and vehicle emissions. It is a mine of information on these subjects. As the noble Lord, Lord Carmichael of Kelvingrove, has said, it is an extremely technical subject and, in parts certainly, beyond my knowledge.

The sub-committee took as their starting point the proposals made last summer by the European Commission. In the normal course of events, one would not have expected decisions on those proposals to have been made for a considerable period of time, certainly going beyond the four or five months the sub-committee have taken to assemble the evidence, draft and publish their report. But on this occasion the Community has moved fast. The main decisions have been taken by the Council of Ministers, though the details on vehicles emission standards have still to be worked out and incorporated into a directive which can be formally adopted. I shall try later in my speech to set out what the Council of Ministers did decide last month, how the work is being taken forward and its long-term implications.

First, lead. At the time when the sub-committee took evidence the Community had already decided in principle to move to unleaded petrol for new vehicles after a suitable lead time to allow the oil and motor industries to make the necessary investments. The main decisions required were as to the number of grades of unleaded petrol and their octane number, and the precise timing for introducing the changes. The sub-committee received a range of views on this aspect from the industries and other organisations concerned.

In the event, the Council decided last December that a single mandatory grade of unleaded petrol, at 95 RON octane rating, must be generally available at the pump throughout the Community by October 1989: though another lower octane grade of unleaded may be introduced as well. The new lead in petrol directive incorporating this was adopted on 20th March as Directive 85/210/EEC. I am sure the House will agree that this is a very satisfactory result for the United Kingdom.

The precise phasing-in arrangements for new cars have not yet been decided. The Commission proposed that all new type approvals from 1st October 1989 and all new registrations from 1st October 1991 should be capable of running on unleaded petrol. The Government are pleased that the sub-committee accept their view that it would be sensible for the vehicle directive to enable member states to require all new cars with petrol engines registered from October 1989 to be capable of running on 95 octane unleaded petrol.

Of course we would not expect the motor industry to change every engine on its whole production on the same day; nor can manufacturers control the dates at which new vehicles are first registered. What is important is that we should be put in a position to settle arrangements with our manufacturers to phase out old designs and bring in new designs over as short a period as is practicable, around the second half of 1989, when the new petrol will be becoming increasingly available. It is our objective to get the necessary provisions in the vehicle directive to enable us to do just that.

I turn now to the vehicle emission proposals applying to the three gases—carbon monoxide, hydrocarbons and nitrogen oxides. The Commission's proposals cover emissions of these gases from the exhausts of all vehicles of up to 3.5 tonnes in gross weight, including vehicles with diesel engines. But they do not address the problem of diesel smoke either from light vehicles with diesel engines, or from heavy trucks and buses of more than 3.5 tonnes weight. The Government regard diesel smoke as a serious environmental problem, and we look forward to commission proposals to tighten up the standard in the present directive on smoke from diesel engines.

Before describing the agreement reached last month, it is important to put vehicle emissions in a historic perspective, and this is helped a lot by some of the evidence which was produced for the subcommittee. Carbon monoxide is produced in much greater volume than the other pollutants in car exhausts, and the original legislation on vehicle emission control was directed specifically at carbon monoxide. The underlying reason was concern about possible effects on public health in urban areas where traffic build up could cause, especially in windless conditions, substantial kerbside concentrations of CO.

The particular concern is now much diminished as CO levels have come down with the more efficient combustion techiques used in engines developed by the motor industry during the 1970s. Carbon monoxide is, of course, rapidly dispersed and eventually oxidised to carbon dioxide—the effect of motor vehicle control is merely to increase CO2 formed in the engine, rather than in the outside air. It follows that further control of carbon monoxide from car exhaust, though helping in some special circumstances will make little difference to atmospheric environmental problems such as acid rain or the formation of ozone or other pollutants causing haze or possible damage to trees.

It is the nitrogen oxides and hydrocarbons which may contribute to these environmental problems which are of such concern at the present time. The expert bodies and interested organisations submitting evidence to the sub-committee were rightly cautious about the way in which these gases in the atmosphere gave rise to damaging pollution. But one important fact came through quite clearly. It is clear that cars and other light vehicles in use at the present time contribute only a proportion of the total of nitrogen oxides and hydrocarbons in the atmosphere.

The most authoritative figures for the United Kingdom were presented to the sub-committee by Warren Spring Laboratory. They estimate that United Kingdom petrol engine vehicles are responsible for 29 per cent. of national emissions of nitrogen oxides from man-made sources. Warren Spring estimate that exhaust emissions from petrol engined vehicles contribute 11 per cent. of the national total of hydrocarbons—but, eliminating natural gas leakage (which is mainly unreactive methane) from the national total, that percentage would approximately treble.

In round terms then, exhaust emissions from cars and other petrol engine vehicles in current use in the United Kingdom are contributing around one-third of the reactive hydrocarbons and nitrogen oxides in our atmoshere. That proportion is based on car use as it was in 1984 with cars of all ages on our roads but with the newer ones built to conform with the technical standard known as ECE Regulation 15/03. The estimates do not take account of improvements to that standard already agreed and due to be implemented in the Community next year; nor do they take account of the improvements proposed by the Commission for 1989 and achievable without the use of catalyst technology for the great majority of cars. The potential improvement from these uncontroversial changes, agreed by the motor industry, are set out in Table 6 shown on page 91 of the Select Committee's report. Those two measures alone will achieve, by the end of the decade, a 43 per cent. reduction in the combined total of nitrogen oxides and hydrocarbons permitted under the standard.

So that is the perspective against which we should view the current controversy. We are already at a position in 1985 when the effect of 15 years' work has been to take carbon monoxide off the agenda as a significant problem and to reduce hydrocarbons and nitrogen oxides from motor vehicles to a level representing roundly one-third of the totals in our atmosphere. And we have in the pipeline measures that, without the use of expensive catalyst technology, will produce a very substantial further reduction in emissions of these gases over the next few years. These improvements are all achievable by better control of the combustion process in petrol engines—and in particular the use of leaner air fuel mixtures—with substantial advantages in fuel economy and at modest cost to the consumer.

The Government's view remains that this is the sensible way forward as regards car emission control in this country. We are obviously fortunate in not suffering the problems of smog or forest damage that have caused some other countries to take a much more severe view of car exhaust emissions. For these reasons, the Government do not intend to impose standards on vehicles sold or used in this country which would require manufacturers to use catalyst technology. We shall do nothing in the United Kingdom to stand in the way of our manufacturers developing technology to make the most efficient use of fuel, and at the same time bringing about an estimated average 43 per cent. reduction in exhaust emissions permitted from each new car by the end of this decade.

I must emphasise that this policy is fully consistent with the directive which we expect to be agreed this June following the guidelines agreed by the Council of Ministers last month. That directive will be, like all the directives governing vehicle standards, a permissive directive enabling member states to apply standards to various categories of vehicles from specified dates in the future, but leaving member states free to apply less strict standards if they so choose.

We expect the directive to contain the following specific provisions. For cars of above 2-litres member states will be allowed to require emission levels of equivalent severity to those applied in the United States of America by the federal 1983 standard. The earliest date of any such requirement in Europe will be 1st October 1988 for new type approvals and 1st October 1989 for newly-registered vehicles. It seems that at least three member states—Germany, Luxembourg and Denmark—will take advantage of this provision; the cars likely to be sold in those markets will be models based on ones that have been developed for export to the United States of America and are fitted with the three-way catalyst system.

For medium size cars of 1.4 to 2-litres, a technologically more satisfactory route will be possible. The agreement specifies that for these medium size cars the standard should be achievable by simple (that is single point fuelling) lean-burn techniques combined with oxidation catalysts or comparable cost effective techniques. We expect the additional costs of this type of technology to average £150 per car, compared with £500 for the three-way catalyst system. The fuel economy savings of lean-burn technology will be largely preserved, and the relative simplicity of the control system will increase the likelihood of it remaining effective in service and will keep down maintenance costs. Lean-burn engines are more than just the pious hope of boffins in laboratories far removed from production reality. We have had "first generation" lean-burn engines actually in production for some time; take the Jaguar V12, for example. I understand that later this year Ford Motor Company will be producing a "second generation" engine—that is, an engine running consistently with an air-fuel ratio in the range 18:1 to 20:1—at their Bridgend plant at a rate of half a million units per year. I can say to the noble Lord, Lord Nathan, that I am in no doubt that the advantages of lean-burn will mean that almost all manufacturers will have to adopt this technology sooner or later; but I am pleased to report that United Kingdom engineers from several organisations are in the forefront of these developments. Of course, the extra work to adapt these engines so that oxidation catalysts can work effectively will take some time, and therefore the earliest applications dates for this standard are 1st October 1991 for new type approvals and 1st October 1993 for all new registrations. A single path of engine development will serve both for markets which demand this standard and for those parts of Europe in which there is no demand on environmental grounds for cars to be equipped with catalysts. I hope that answers the second question of the noble Lord, Lord Nathan.

For small cars of up to 1.4-litres the agreement provides for the Commission's Stage I limits to be applied to new type approvals from October 1990 and for new registrations from October 1991. The Council has agreed that this standard should be tightened three years later—the tighter standard has to be worked out over the next two years for an amendment to the Directive to be made in 1987. No particular technology or other conditions are specified as regards this tighter standard.

Those are the main features of the agreement as regards the future emission standards which member states will be permitted to apply to vehicles sold and registered in their territories. Apart from the Stage I limits for small cars, precise emission values have yet to be agreed; and this is the major task over the next two months. These emission values will in the first place be specified in relation to the existing European test cycle. It is widely recognised that as it stands this test cycle is too orientated to driving conditions on unimproved urban roads. The actual cycle is represented on page 187 of the sub-committee's report, from which it can be seen that there are some peaks of 31 miles per hour, but an average speed of only 12 miles per hour. Several noble Lords mentioned that. The United States' federal test cycle is similarly urban but, reflecting the existence of some high class urban roads in American cities 20 years ago, there is one peak of 55 miles per hour and an average speed of nearly 20 miles per hour. The urban character of both cycles reflect the concern of 15 years ago with carbon monoxide in congested urban areas and, in the United States of America, with photo-chemical smog which afflicted, and still afflicts, the Los Angeles urban area.

Several noble Lords, and expert witnesses to the sub-committee, pointed out the weakness in these test cycles. To meet concern about forest damage or acid rain it is necessary to control pollution from cars on motorways and other inter-urban roads as well as in the urban areas. This can only be done effectively and surely if the test cycle includes simulated driving at typical high speeds. So the council have agreed that work should be done over the next two years to formulate additional non-urban driving sequences which, with appropriate emission limit values, can be added to the standard. This way of proceeding differs from that recommended by the sub-committee in paragraph 79 of its report, but we believe that it meets the objective more effectively.

Although not part of the Commission's proposals, the German proposed legislation has led the Council to consider the question of fiscal incentives for purchasers of cars that achieve lower emissions than those prescribed in the legal standard. I do not propose to say anything about the legal arguments surrounding this question of fiscal incentives. In effect the Council has taken a political view on those difficult questions in the context of their overall agreement by laying down a set of conditions for the incentives which limit their value so as to reduce the extent to which they are likely to distort the internal market. The conditions are as follows: the incentive should relate to achievement of an agreed standard, but before the standard can be made mandatory; the starting date for compensation may not be earlier than 1st July 1985; the compensation must be significantly less than the additional costs involved in equipping a car to meet the new mandatory standards; and, in the period before the adoption of the second stage standard for small cars, compensation to the purchaser of a small car is payable for emission levels no more than 15 per cent. better than the first stage standard for carbon monoxide and for the total of hydrocarbons and nitrogen oxides; and the value of the compensation which may be paid over three years should not exceed in total the equivalent of 750 Deutschmarks.

It remains to be seen how fiscal incentives will work in practice. There is no doubt that a number of cars fitted with the three-way catalyst system will soon be made available in Germany at a competitive price, when account is taken of the tax remission made available to the purchaser. But how extensive the consumer demand is, and how the cars actually perform, remains to be seen.

The noble Lord, Lord Nathan, asked what our assessment would be on the reduction of pollution as a result of the 20th March agreement. We cannot be precise about that yet because the exact limits are still to be settled. We do not know which other member states will choose to implement this permissive Directive. As I have already indicated in my speech, pollution from cars is falling at a considerable pace. Without using any catalyst technology at all, we can expect a reduction of around 40 per cent. over a period of six or seven years. Where catalysts are used, the reduction could be even greater if the catalysts are properly maintained.

Several noble Lords have suggested that the US Federal Standard is being adopted throughout the world as compared with the United Nations-ECE standard. This is not so. In most of the world, the ECE standard is accepted, and in particular in those developing countries where the major future markets lie. In fact, only one country—the USA—at present requires the so-called Stage II standard, and adoption of this in Australia and Sweden is only a future intention which may or may not be realised.

My Lords, I hope that I have covered most of the main points which noble Lords have raised. I should once again like to thank the noble Lord, Lord Nathan, for initiating this debate.

Lord Nathan

My Lords, it remains for me to thank most warmly those who have participated in this debate. We have had from the noble Lord, Lord Strathcarron, an interesting survey of the history of the motor industry an its achievements over the years. We have had from the noble Earl, Lord Shannon, an expert assessment of the technical factors with which we have been confronted. We have had wisdom from the noble Lord, Lord Nugent, which of course we also enjoyed on the Committee. With regard to the noble Lord, Lord Energlyn, I must disclaim any intention on the part of the Committee under my chairmanship of going into oil and water mixtures. This is the sort of thinking which I have been trying to avoid with my own car, but it is nice to know that our report, innocently though it was composed, has led your Lordships into these remote pastures. We look forward to ever new fields.

I have also to thank the noble Lord, Lord Rugby, a member of the Committee, who participated very fully, for his contribution to the debate. I was interested in the comments of the noble Lord. Lord Carmichael, and I hope that he did not feel—which was certainly not the case—that the Committee was in any way biased against the motor industry. That was, indeed, far from our thoughts. We came to our conclusions on the evidence before us, be it right or wrong, and we were greatly assisted by the evidence which was provided to us by the motor industry.

I am grateful for the detailed and careful reply of the noble Lord, Lord Brabazon of Tara, on behalf of the Government. He will not expect me, nor would it be right of me, to comment on his statement. It is something which I and I know all other Members of the Committee will wish to read and consider in great detail. It is, therefore, my task to thank your Lordships for noting the contents of our report, and I hope that in some respects at least it may have been helpful.

On Question, Motion agreed to.