HL Deb 14 July 1997 vol 581 cc819-22

2.48 p.m.

Baroness Miller of Hendon

asked Her Majesty's Government:

What increases in all forms of taxes and what restrictions on the use of private motor cars will be needed to implement in part the Prime Minister's initiatives announced at Denver to reduce the emission of greenhouse gases by a further 20 per cent. in the United Kingdom.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman)

My Lords, climate change is one of the most serious threats facing the world today and the Government are committed to taking firm action at home and to providing leadership abroad to combat the threat. We are examining a wide range of measures, including fiscal measures, which could help us achieve the goal set out by the Prime Minister to reduce carbon dioxide emissions to 20 per cent. below 1990 levels by the year 2010.

Road transport is the fastest growing source of greenhouse gas emissions in the United Kingdom and, along with other sectors of the economy, must make a fair contribution to meeting our target. The decision by the Chancellor to increase from 5 per cent. to at least 6 per cent. in real terms the commitment to annual fuel duty rises will, if continued to the end of the Parliament, save an additional 2.5 million tonnes of carbon in 2010, making a significant contribution to the 33 million tonnes which needs to be saved to meet our 20 per cent. target.

Baroness Miller of Hendon

My Lords, I thank the Minister for that comprehensive reply. Will she confirm that, however good the objectives are, there will be considerable inflationary increases in costs to industry and to domestic consumers of fuel and that there may possibly be damage to our own car manufacturing and export industries? Do the Government agree that all the Prime Minister's proposals must be fully implemented by all the other major world economies and not simply be imposed unilaterally to the competitive detriment of the United Kingdom?

Baroness Hayman

My Lords, I agree that it is essential that we tackle the problem internationally. In setting the UK's domestic target, the clear intention was to provide leadership in the international scene. At Kyoto we expect to see other nations contributing towards a target. I repeat that the problem must be tackled internationally. Our competitiveness will be helped if other countries take similar measures. However, I must advise the noble Baroness that we are absolutely determined that those measures will not jeopardise the economy. Indeed, there are benefits for the United Kingdom in achieving significant emission reductions. If we achieve our target, we shall have a better transport system, more competitive industry with new opportunities in the field of technological innovation, anti more energy-efficient homes for our citizens.

Lord Stoddart of Swindon

My Lords, does my noble friend agree that one of the best ways of reducing the amount of pollution, including CO2, in the atmosphere is to make those who drive their cars the most pay the most? Therefore, will the Government reconsider their attitude towards ending vehicle excise duty and transferring the taxation to VAT on petrol?

Baroness Hayman

My Lords, we have seen that increasing the duty on petrol is a very effective measure in terms of reducing CO2 emissions. It also provides people with an opportunity to reduce the number of car journeys that they make and provides incentives to industry to produce more fuel-efficient vehicles. On the issue of the other changes that could take place to encourage CO2 emission reductions, the Budget placed the environment at the core of the Government's objectives for the tax system with a statement of intent that environmental pollution should be discouraged through the tax system. It included the increase in the level of fuel duty escalator and recognised that we would have to consider the possibilities of a whole range of other measures.

Lord Ezra

My Lords, does the Minister agree that one of the biggest contributors to emissions from road vehicles is congestion at peak periods? Have the Government any plans to deal with that problem?

Baroness Hayman

My Lords, congestion does, indeed, contribute to pollution and it is important that we tackle it. The White Paper on an integrated transport policy seeks to consider in the most open and wide-ranging way all the possibilities with regard to how congestion can be tackled.

Lord Renton

My Lords, bearing in mind the great possibilities of having vehicles propelled by sources other than petrol and diesel oil, will the Government give every encouragement, including financial encouragement, to the development of those alternative sources of power?

Baroness Hayman

My Lords, there are great opportunities for developing other sources of clean transportation which could yield huge benefits for both public and private transport. In certain areas such encouragement is being given. I shall write to the noble Lord with the details. However, there are a whole range of measures—not just relating to transport—by which, by exploiting technological advance in, for example, combined heat and power and energy efficiency, we could make a huge contribution to cutting CO2 emissions.

Lord Paul

My Lords, will Her Majesty's Government consider dropping the tax threshold on company cars of 2,500 miles and 18,000 miles which encourages many company car owners to drive in the last quarter of the tax year, thus creating more congestion and more pollution at the worst time of the year, given the weather?

Baroness Hayman

My Lords, I understand very well the point that my noble friend is making. It would be wrong of me to anticipate the measures which the Chancellor might choose to impose, but I am sure that the taxation of company cars will be considered.

Baroness Williams of Crosby

My Lords, is the Minister aware that we welcome the Government's leadership on this issue? Will the noble Baroness give us two assurances, first, that submissions will be made, particularly to the Government of the United States, to follow up the initiative taken by Britain and Germany, as the United States has done almost nothing to reduce energy use in that great country? Secondly, will the Minister assure us that steps will be taken to try to introduce the use of information technology in the control of industrial processes, given that we could massively reduce the energy misuse of many industrial processes, particularly older ones?

Baroness Hayman

My Lords, on the second point, the noble Baroness clearly highlights the areas in which there are opportunities for cutting CO2 emissions, such as exploiting IT and technological advances, without taking some of the more painful measures. As far as putting pressure on the United States and other developed countries is concerned, we hope that at Kyoto the EU's negotiating position will be used to advantage with other developed nations to ensure that the burden in this area is spread fairly between the developed countries.

Lord Glenamara

My Lords, do the Government take into account in this matter the physiology of trees, which make the major contribution to reducing the amount of CO2 in the atmosphere? If they do, what additional plans do they have for planting broad-leaf forests as part of the effort towards achieving the target?

Baroness Hayman

My Lords, I shall have to write to my noble friend on the issue of broad-leaf forests. However, on the issue with which I am perhaps more familiar, the mitigating effects of tree-planting on road development, the Highways Agency has a major tree-planting programme alongside its road development programme in order to do exactly what my noble friend suggested.

The Earl of Lauderdale

My Lords, does the Minister accept that one of the chief pollutants in the world is the generation of electricity by the burning of coal and that two of the biggest offenders are China and India? Can the Minister say, first, what it is hoped to achieve at Kyoto with regard to encouraging China and India to reduce their burning of coal and the consequent pollution? Secondly, and for the same reason, what are the Government doing to encourage combined heat and power in this country?

Baroness Hayman

My Lords, on the issue of combined heat and power in this country, we recently had an interesting debate in this House on the very many ways in which we can support such initiatives. We are setting the target of aiming to generate at least 10,000 megawatts of power from combined heat and power schemes by 2010, doubling the previous government's target of 5,000 megawatts by 2000. On the issue of the developing countries, there is concern about CO2 emissions in such areas and particularly in the countries to which the noble Earl alluded. However, we have to balance that against the developing countries' rightful concerns about economic progress. I believe that we shall have a stronger negotiating and advisory position with regard to those countries if we in the developed world set a good example.

The Duke of Somerset

My Lords, does the Minister agree that those living in rural areas (away from public transport systems) should not be disadvantaged by fuel fiscal rates?

Baroness Hayman

My Lords, I understand the noble Duke's point about the impact on those living in rural areas and the need to find ways of helping them without penalising them because of their fuel consumption. Higher fuel costs encourage manufacturers to improve the fuel efficiency of their vehicles and can influence road users' decisions about car purchases and maintenance and their driving behaviour, particularly the speeds at which they drive as well as the journeys that they undertake. Some 30 per cent. of people do not own a car, and one must also be concerned about them.