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9 pm
Mr. David Jamieson (Plymouth, Devonport): In rising to support the amendment tabled by the hon. Member for Thanet, North (Mr. Gale), I should first declare an interest. I have given advice to the Natural Gas Vehicle Association, but have no financial contract with it.
The amendment--which essentially proposes to use a fiscal measure to promote the use of compressed gas vehicles--gives the Government the opportunity to do three things: first, to create a cleaner environment, particularly in terms of air quality; secondly, to develop new technology at which we could be at the leading edge; thirdly, to greatly assist our balance of payments. I shall address a few comments to each of those matters.
First, the environmental case for moving from diesel and petrol motor vehicles to compressed natural gas is overwhelming. The emissions from natural gas vehicles are substantially lower in almost every category than from diesel and petrol vehicles. Evidence shows that diesel in particular is giving out particulates that are carcinogenic, and much of the evidence from America shows that cancers are developing early in young people as a result of their breathing in diesel fumes. In particular, slow-moving vehicles such as buses, taxis, refuse collection vehicles and other vehicles seen in our city centres give out high levels of pollution. The environmental case is so strong that there is no need to say any more on it.
Secondly, this country has for many years been at the leading edge of vehicle production--in particular, car production. We should be developing the new technology in this country, but it is instead being developed in other parts of Europe, Japan, America and Canada. We could be losing out by not providing new technology that could be sold right across the world if we could grasp our home market and develop it as we should.
I have named some countries, but Argentina and Italy, for example, are also ahead of us in this area. Italy has a third of a million gas vehicles on its roads, while we have only a few hundred. The industry needs the critical mass of filling stations to give it a kick start, and that can only be done by the fiscal measures proposed in the amendment.
Finally, we could substantially help our balance of payments by not importing the oil that presently fuels our vehicles. Some 60 per cent. of oil for our vehicles is imported from other countries--mainly the middle east. Natural gas would come almost in its entirety from the gasfields around the United Kingdom.
A topical argument is that oil comes to this country across the sea in tankers and is then taken in tankers along our roads, which is, as recent experience in south Wales has shown, an environmental hazard and a hazard to safety and life on our roads; whereas gas is delivered through pipes, which is much safer.
Clearly, there is cross-party support on such an important matter. The amendment is an opportunity for the Government to reduce the excise duty, which would encourage the use of much cleaner fuels in vehicles on our roads.
Mr. Robert Atkins (South Ribble):
I apologise to you, Mr. Deputy Speaker, to the House and to my hon. Friend the Member for North Thanet (Mr. Gale) for missing the start of my hon. Friend's brief remarks on the amendment,
When I was Minister of State for the Environment and Countryside, the hon. Member for Devonport and I shared a platform, and we talked about this very issue. I was pleased to do so, because it is an important issue.
The hon. Gentleman is wrong on one point, however: the technology is being developed in my constituency at the Leyland technical centre--the former Leyland Trucks site, where a lot of work is being done in the field and on designing buses and trucks which, as my hon. Friend the Member for North Thanet rightly said, are being used in other parts of the world. We already have a lead that we can build on and on which Britain can score a few runs, from both the environmental and industrial points of view.
I am therefore delighted to be associated with the amendment. Allowing for the fact that it has revenue implications that might not be wholly acceptable to my right hon. Friend the Paymaster General, I ask him to realise the strength of feeling that is beginning to build up among--to put it politely--three hon. Members who would consider themselves involved in the issue and who I would hope the House would realise have a genuine and abiding interest. I hope that he will be sympathetic in his response tonight and in the way in which he treats this matter, which has ramifications for health, the environment and pollution control, and would also allow us to make a product that we can sell to the world.
Mr. Alan Simpson (Nottingham, South)
rose--
Mr. Deputy Speaker (Sir Geoffrey Lofthouse):
Does the hon. Member for Nottingham, South (Mr. Simpson) want to speak on this amendment?
Mr. Heathcoat-Amory:
The case for the use of natural gas, or liquefied petroleum gas, has been well made during this short debate. I listened with care to the remarks of my right hon. Friend the Member for South Ribble (Mr. Atkins), my hon. Friend the Member for North Thanet (Mr. Gale) and the hon. Member for Plymouth, Devonport (Mr. Jamieson) in support of the amendment. I detect that it is chiefly a probing amendment, but that it nevertheless has a serious intent.
The Government well understand the advantage that natural gas and LPG can have, particularly in reducing urban pollution. The use of such fuel reduces most of the main pollutants--one cannot escape the production of carbon dioxide, but, for example, sulphur emissions are considerably lower than when such vehicles burn diesel.
In recognition of those advantages, the duty on road fuel gas was frozen in the November 1994 Budget. It was made clear at the time that further research was necessary, and that further consideration would be given to a possible cut. That was indeed done in the 1995 Budget, when my right hon. and learned Friend the Chancellor of the Exchequer, after examining the environmental and other cases, concluded that a 15 per cent. reduction was appropriate. That was designed approximately to equalise the running costs of vehicles using gas with those using diesel or petrol. Now there is no disincentive to the use
of road fuel gases, and it is up to consumers and the market to decide whether to convert or purchase vehicles using those fuels.
As my right hon. Friend the Member for South Ribble said, some vehicles are already using the fuel. There is at least an embryo industry using them.
My hon. Friend the Member for Thanet, North urged a dramatic cut in duty because of the problems of conversion. A reduction in the cost of the fuel would tend to encourage high-mileage users rather than the lower-mileage urban use that all hon. Members who spoke thought to be the more achievable use for such vehicles. It may therefore be better to examine whether the cost of conversion could be encouraged through more capital-directed assistance, possibly through changes to vehicle excise duty. I at least offer him the prospect of that being considered.
We intend to consider carefully using VED as a means to encourage low-emission vehicles. If there was evidence to support that, it could be possible to use it as the incentive to undertake conversion work. That might be a better targeted measure than a simple further cut in the cost of the fuel. I cannot prejudge the outcome of the studies, and I do not wish to give my hon. Friend too certain a steer, but I can undertake that it will be closely considered.
As to future research, the energy technology support unit is about to produce a report on alternative fuels right across the board. In addition, it has a programme of research into gases and other fuels that will be published next year. I hope that I have said enough to show those interested in the subject that I am at least sympathetic to their points. I can offer no immediate relief but I understand the point about the cost conversion, in addition to the help that we have already given by cutting by 15 per cent. the taxes in the current Budget.
Mr. Gale:
I am grateful to my right hon. Friend, especially for recognising in his closing remarks the burden of the additional cost of conversion. I am also grateful to my right hon. Friend the Member for South Ribble (Mr. Atkins) and to the hon. Member for Plymouth, Devonport (Mr. Jamieson) for their support.
This issue is not going to go away, but, equally, I know that my right hon. Friend has not come to write out the cheque for the relatively modest sum that we ask to stimulate the industry. I am also conscious that the House wants to move on to an important debate. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr. Simpson:
I beg to move amendment No. 25, in page 17, line 21, at end add
Mr. Deputy Speaker:
With this, it will be convenient to discuss also the following amendments: No. 26, in page 17, line 24, after 'they', insert '(a)'.
No. 27, in page 17, line 26, leave out '(a)' and insert '(i)'.
No. 28, in page 17, line 27, leave out '(b)' and insert '(ii)'.
No. 29, in page 17, line 29, leave out '(c)' and insert '(iii)'.
'provided that any refund made pursuant to paragraph (b) of subsection (1D) below may, unless the Treasury decides otherwise, only be a refund of a least nine and one half per cent. on the VAT chargeable'.
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