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Kali Mountford (Colne Valley): The hon. Gentleman may be surprised to learn that, in my constituency, most people with low incomes do not use cars at all, but depend on public transport. The West Yorkshire passenger transport executive provides free transport for pensioners and disabled people who require it.

Mr. Clifton-Brown: The hon. Lady's area must be very different from mine. In many small villages in my area there is only one bus a week, and anyone with an urgent appointment with the doctor or an urgent need to claim benefit would still be waiting.

Mr. Heathcoat-Amory: Has my hon. Friend taken account of the fact that, as a result of the Budget, the cost

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of bus services will rise? The extra fuel increase must be borne not just by private motorists--who, of course, are of no concern to Labour Members--but by bus companies and other operators. They will have to raise their prices, which will drive the hon. Lady's constituents and others off the buses. Either they will be unable to travel at all or they will have to try to obtain lifts in private cars.

Mr. Clifton-Brown: I agree. As my right hon. Friend said in his speech, if public service costs are to be increased without there being a commensurate increase in public sector grant, the cost will inevitably fall on the consumer.

One of my predilections is listening to Jimmy Young on the way from my constituency to London. Anyone who listened to his programme this morning will have heard people telephoning the programme saying they did not use public transport because of the cost. One lady who lived in Edgware, or some such London borough, tried to give up using her car for a month, but had to start using it again because the cost of public transport was even higher than that of the car. How daft can the Government get?

I do not want to be further provoked into making a long speech. I have made my points, and I hope that the Government will consider them carefully when drawing up next year's Budget.

Mr. Quentin Davies: I was struck by the extraordinary way in which the Government are trying to justify this increase in duty. They seem to be using two arguments, and they are in a frightful muddle.

The first argument was that it was a good idea to take the opportunity of the Budget to increase consumption taxes. Indeed, if consumption is rising at an unsustainable rate and the economy is in danger of overheating--the analysis made by the Government in their Red Book--it might be sensible to take advantage of a Budget to reduce consumption spending. The Government have demonstrated, however, that that argument is not available to them because the major tax rises that they introduced were, first, on companies and the corporate sector--the windfall tax--and, secondly, on savings, with the abolition of the dividend tax credit, which will have exactly the opposite effect in so far as it reduces the return on savings--and, thus, the inducement to save--and so increases consumption. People will save less and spend a greater proportion of their disposable income.

4.30 pm

A Government who tax savings cannot coherently argue in the same Budget and Finance Bill that the increase on tax on hydrocarbon fuels is a measure to reduce consumption. If there were not already sufficient inconsistency between that argument and the attack on savings through the abolition of the dividend tax credit, the Government are at the same time reducing value added tax on domestic fuel. So they are reducing a consumption tax on a hydrocarbon fuel with one hand, while increasing a consumption tax on such a fuel with the other. There is no rhyme or reason about this Government and this measure.

Mr. Geraint Davies: Does the hon. Gentleman agree that the reason for that inconsistency is wanting, on the one hand, to stop or limit the environmental damage

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caused by exhaust fumes and the use of cars and, on the other, to help poor, elderly people to keep warm and to stop them dying of hypothermia during the winter? There is no inconsistency from our point of view.

Mr. Quentin Davies: I have dealt with one inconsistency--that of claiming that it is necessary to reduce consumption through this increase in tax on hydrocarbon fuels while increasing consumption spending by a slightly greater reduction in another tax on another set of hydrocarbon fuels and, at the same time, attacking savings to a considerable degree, which will only reduce the savings ratio and increase consumption.

There is no rhyme or reason. No doubt that is why the hon. Gentleman did not produce that argument in his intervention. He obviously agrees with me that the Government cannot credibly use that argument because they are in a state of complete contradiction over it. So he used the other argument, which I was coming to--environmentalism.

It is said that it is environmentally friendly to increase carbon taxes because that reduces emissions into the atmosphere of carbon dioxide and, indeed, of other substances, some of which might be toxic. I am very much in favour of using taxes to reduce the ill effects of environmental pollution. That is a good principle. It was taken a long way, under the distinguished period in office of the previous Administration, by a distinguished Secretary of State for the Environment.

Nevertheless, there seems to be another major confusion in the Government's attitude. This tax is being increased and there are attempts to use the tax system to push people to use diesel fuel. As has been said, using the tax system to increase the relative inducement to consumers to go for unleaded fuel has brought about the perversity of super-unleaded petrol, which contains a high element of benzene, which is a nasty carcinogen. That is hardly an environmentally friendly consequence of using the tax system to try to bias consumers' choice of petrol. There are the references to diesel, but there is increasing evidence that the effects of diesel fuel use are environmentally harmful, in that fine particles of diesel fuel in the atmosphere are absorbed through the lungs into the system and never really discharged. Medical evidence therefore suggests that, from the environmental or public health viewpoint, it is not a terribly clever idea to increase diesel consumption.

For the Government to justify bringing forward taxes on environmental grounds, we need a reasoned, coherent and systematic account of how the Government believe public health is negatively impacted by the use of different hydrocarbon fuels and what set of tax measures is likely to produce the optimal use of such fuels. We have not had that; we have had only piecemeal measures, justified by a mixture of electoral demagogy and last-minute financial pressures. Those measures are then masked by high-sounding general principles relating to the environment or to the fiscal management of demand in the economy. Those arguments are completely bogus and those principles are not being coherently or honestly applied.

Mr. Bennett: Did the hon. Gentleman make that criticism of the previous Government?

Mr. Davies: I have indeed made my points about benzene in super-unleaded fuel and the environmental

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impact of diesel fuel on a number of occasions, in the House and in Committee, under both the current Administration and the previous Administration. With the consent of the hon. Member for Denton and Reddish (Mr. Bennett), I intend to go on making these points until I feel that the Administration are listening to them. I hope that they will be addressed. They deserve to be addressed and I hope that the Financial Secretary will address them when she replies to the debate, because they go to the heart of the rationale of the new clause.

I represent a rural constituency--Grantham and Stamford, which is a large part of south Lincolnshire--and I am intensely conscious of the disproportionate burden placed on rural populations by any increase in hydrocarbon duties. I have to say to my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) that not only does it place a burden on people in the conduct of their private lives--going to school or to the doctor--but it places a burden on employment by increasing the costs of employment. One of the positive features of the modern world is greater mobility. Because they have cars, people can now take jobs not merely within walking or bicycling distance, as was the case some 50 years ago, but within a range of 10, 15 or 20 miles, depending on how good the road system is. That must be good for the economy, because it maximises the opportunity to use people's talents in the economy; and it is good for individuals, because they have a wider range of job opportunities. Anything that increases the costs of mobility reduces that mobility, as night follows day. One must be conscious of that.

Against all that, I accept entirely the environmental arguments. There is a double environmental argument relating to hydrocarbon fuels: they are non-renewable and it is sensible, over time, to try to economise in their use; and there are serious issues relating to atmospheric pollution and carbon dioxide in the atmosphere.

Mr. Geraint Davies: It seems that the hon. Gentleman's argument is leading towards a suggestion that any state intervention through charging excise duty on fuel is a fundamental constraint on freedom. He seemed to be proposing that we should cut all tax on fuel to enable people to make the maximum use of motor vehicles across Britain, without any limit, in the name of freedom. He has made only a passing reference to the environment.

Where does the hon. Gentleman stand? Does he not agree that when the Government consider public opinion, a balance must be struck? I believe that the Government have struck the right balance in favour of public opinion.

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